Outlook: Energy markets have rallied higher to start the month with both benchmark crude contracts trading up by over $2.00. The front month WTI contract managed to trade past both the $75 and $76 mark during the overnight session. WTI will likely now target the 2018 high seen at $76.90. Products also push higher with prices up by around 2%. For the month of June, WTI saw gains of over 10% while Brent captured gains of more than 8%. Support stems from prospects of strengthening demand and economic recovery. Additionally, strength in equities and a weaker U.S. dollar underpins markets. Currently, headlines are pointing to a smaller than expected production increase by OPEC+ in August. Sources familiar with the matter say the group plans to increase production by 2 million bpd by December. This would account for increase in August less than the previously expected 500,000 bpd. As OPEC is expected to take a more conservative approach to production, analysts forecast that we will continue to see tight supplies support prices.
- According to Reuters, Saudi Arabia and Russia have reportedly came to a preliminary agreement on easing output cuts starting in August.
- Currently OPEC+ talks are leading to an expectation of 400,000 bpd being added back into the market each month and the extension of cuts to the end of 2022.
- Weekly Jobless claims were seen hitting a new pandemic-era low of 364,000. Currently however, there are still over 11 million Americans receiving pandemic related benefits.
- The August crude oil contract is trading $2.64 higher at $76.11. The 20-day and 100-day moving averages are $71.85 and $63.98 respectively. The 14-day RSI is 74.94%.
- As of 8:45 am CST: August Brent is up $1.66 at $76.28, the U.S. dollar index is 0.076 lower at 92.360, while the nearby e-mini S&P 500 futures contract is up 10.75 points at 4299.25.
- As lockdowns ease, India’s state run refiners sold 5.36 million gallons of gasoil in June, up by 18.5% compared to May but down by 1.84% compared to the year prior.
- The August ULSD contract is trading $0.0483 higher at $2.1766. The 20-day and 100-day moving averages are $2.1299 and $1.9461, respectively. The 14-day RSI is 64.34%.
- India’s state run refiners sold 2.12 million gallons of gasoline in June, up by 29.35% compared to May and 5.7% compared to the year prior. Compared to June of 2019, gasoline demand is still down by 10.4%.
- According to AAA, the current average gasoline price at the pump is at $3.123 per gallon, up from $2.179 a year ago.
- The August RBOB contract is trading $0.0441 higher at $2.2859. The 20-day and 100-day moving averages are $2.2133 and $2.0298, respectively. The 14-day RSI is 65.13%.
- Propane prices have pushed significantly higher today due to strength in the crude market and yesterday’s disappointing inventory build.
- At last look, Conway propane was up $0.07250, trading at $1.15250. Mt. Belvieu was up $0.06250, trading at $1.15750.
- The August Natural Gas contract is trading $0.029 higher at $3.679. The 20-day and 100-day moving averages are $3.337 and $2.996, respectively. The 14-day RSI is 79.35%.
|As of 8:45 AM CST||WTI August||ULSD August||RBOB August||Nat Gas August|