Outlook: The energy complex has experienced mixed trade during the overnight session. Currently WTI trades slightly softer while RBOB attempts to hold in the green. Focus remains on the delayed OPEC+ decision regarding August production. Yesterday, the United Arab Emirates was seen blocking a deal, causing meetings to continue into today. UAE reportedly is against production cuts being extended through 2022, and also wishes to increase its own output. According to a delegate familiar with the deal, if no deal is reached then the fallback position would be to keep output unchanged for August. Additionally, there is speculation that there’s a slim chance the disagreement could lead to the entire deal falling apart. If production is to remain unchanged for August, this could severely tighten global supply causing inflationary prices to hamper economic recovery. We can expect today’s price activity to reflect the upcoming decision made by OPEC, as traders will be keeping a keen eye on headlines.
- Analysts have speculated that the current roadblock hit during OPEC+ proceedings could potentially lead to the group sticking with current cuts for August.
- OPECs production for the month of June rose by 855,000 bpd, with over half of the increase accounted to Saudi Arabia according to Bloomberg.
- Oil refiner’s weekly capacity in the U.S. was seen up by 252,000 bpd compared to last week, according to research company IIR.
- Oil exports from 31 countries or regions were seen increasing by 682,000 bpd in June compared to May. The largest increase was seen for UAE which increased its exports by 445,000 bpd.
- The August crude oil contract is trading $0.47 lower at $74.76. The 20-day and 100-day moving averages are $72.10 and $64.16 respectively. The 14-day RSI is 71.85%.
- As of 8:30 am CST: August Brent is down $0.14 at $75.70, the U.S. dollar index is 0.090 lower at 92.507, while the nearby e-mini S&P 500 futures contract is up 11.00 points at 4321.75.
- The August ULSD contract is trading $0.0025 lower at $2.1537. The 20-day and 100-day moving averages are $2.1305 and $1.9500, respectively. The 14-day RSI is 61.47%.
- According to FGE, Indian demand for oil products such as gasoline and diesel is expected to increase to 3.8 million bpd in Q3 and to 4 million bpd in Q4.
- As we head into the holiday weekend, U.S. gasoline prices are sitting at their most expensive level for this time of the year since 2014.
- The August RBOB contract is trading $0.0012 higher at $2.2688. The 20-day and 100-day moving averages are $2.2158 and $2.0348, respectively. The 14-day RSI is 64.20%.
- At last look, Conway propane was down $0.01250, trading at $1.10500. Mt. Belvieu was up $0.00500, trading at $1.11750.
- The August Natural Gas contract is trading $0.010 higher at $3.671. The 20-day and 100-day moving averages are $3.363 and $3.003, respectively. The 14-day RSI is 78.59%.
|As of 8:30 AM CST||WTI August||ULSD August||RBOB August||Nat Gas August|