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Outlook: After the collapse of OPEC+ talks yesterday, WTI prices were seen pushing to their highest level since November 2014. The benchmark contract made it to a high of $76.98, up by as much as 2.4% from Friday’s close, before erasing gains this morning. All eyes remain on OPEC+ as traders are warry of the group’s next move. Talks were seen falling apart yesterday as the group was unable to agree on production cuts going forward. Currently tension between UAE and Saudi Arabia has led to speculation that there are several possible outcomes, one being the disintegration of the group, while the most likely would be compromise involving an increase in the group’s production. An increase in volume would likely place pressure on prices as demand recovery remains uneven across the globe. However, on the other hand, increasing prices could also lead to demand destruction as gasoline prices have already passed the sensitive threshold of $3 a gallon. Traders will continue to watch for developments in regard to the group, as market direction going forward will be strongly based on any production decision.

Crude

• Saudi Arabia has raised its official crude selling price for Asia by 80 cents for the month of August compared to July.
• Goldman Sachs has stated that the collapse of OPEC+ talks has introduced some uncertainty in the market, but the group still maintains its expectation of Brent hitting $80 this summer.
• Iran reiterated on Sunday that it is able to boost oil production rapidly if the U.S. were to remove current sanctions. The outgoing Oil Minister stated that the country has already taken many measures to ensure it can produce more crude in a short amount of time.
• The August crude oil contract is trading $0.33 lower at $74.83. The 20-day and 100-day moving averages are $72.37 and $64.34 respectively. The 14-day RSI is 66.39%.
• As of 9:00 am CST: August Brent is down $1.39 at $75.77, the U.S. dollar index is 0.212 higher at 92.424, while the nearby e-mini S&P 500 futures contract is up 6.50 points at 4336.25.

Diesel

• Airline seat capacity in Australia and South Africa has fallen in the past week due to surges in Covid-19 cases, while large gains have been seen in countries such as France and the UK due to strong vaccination rates.
• The August ULSD contract is trading $0.0163 lower at $2.1628. The 20-day and 100-day moving averages are $2.1335 and $1.9543, respectively. The 14-day RSI is 59.03%.

Gasoline

• According to AAA, the current national average gas price is set at $3.134 a gallon compared to a year ago at $2.180.
• Tropical Storm Elsa is now nearing the Florida Keys, with demand for retail gasoline sales expected to be hurt by the storm in the Southeast.
• The August RBOB contract is trading $0.0147 lower at $2.2851. The 20-day and 100-day moving averages are $2.2213 and $2.0403, respectively. The 14-day RSI is 62.12%.

Propane

• At last look, Conway propane was up $0.01000, trading at $1.11750. Mt. Belvieu was up $0.0175, trading at $1.13250. 

Natural Gas

• According to the National Weather Service, above average temperatures are expected to continue in the U.S. Northwest and Northeast for the next week, in turn lifting cooling demand.
• The August Natural Gas contract is trading $0.043 lower at $3.657. The 20-day and 100-day moving averages are $3.392 and $3.009, respectively. The 14-day RSI is 72.97%.