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Outlook: The energy market continues to face pressure due to OPEC+ uncertainty, with prices currently set to see their third consecutive day of losses. Losses however are limited by another large draw in crude stocks, with the API reporting an 8 million barrel draw for the week ended July 2. Traders will look towards this morning’s Weekly Petroleum Status Report to see if this draw is confirmed, if confirmed it would mark the seventh consecutive week of declines. OPEC+ remains unsettled in regard to future production decisions. Reports state that Russia is currently attempting to mediate and come to a deal. Along with concerns regarding global production, traders also face woes as Covid-19 issues persist. Japan is reportedly set to declare a state of emergency in Tokyo as the Delta variant continues to spread. This order is set to last from July 12 until August 8, meaning that the Olympics will be help fully under emergency conditions. Additionally, the 10-year Treasury Yield was seen falling to its lowest since February due to concerns of slowing economic recovery.

Crude

• This morning’s jobless claims report showed a slowdown in hiring last week with claims coming in at 373,000 versus the expected 350,000.
• Analysts polled by Reuters are expecting to see a 3.9 million barrel draw in U.S. crude inventories on this morning’s report.
• The EIA’s Short Term Energy Outlook dropped crude production forecasts by less than previously expected. Oil production is forecast to fall by 210,000 bpd to 11.10 million bpd versus a previous fall of 230,000 bpd.
• The August crude oil contract is trading $0.31 lower at $73.38. The 20-day and 100-day moving averages are $72.55 and $64.63 respectively. The 14-day RSI is 53.54%.
• As of 8:00 am CST: August Brent is down $0.07 at $73.36, the U.S. dollar index is 0.255 lower at 92.389, while the nearby e-mini S&P 500 futures contract is down 59.00 points at 4290.75.

Diesel

• Yesterday afternoon the API reported that distillate stocks rose by 1.1 million barrels compared to estimates for a 400,000 barrel build.
• The August ULSD contract is trading $0.0053 lower at $2.0838. The 20-day and 100-day moving averages are $2.1262 and $1.9606, respectively. The 14-day RSI is 46.25%.

Gasoline

• Yesterday afternoon the API reported that gasoline inventories fell by 2.7 million barrels compared to an estimate for a 2.3 million barrel draw.
• The August RBOB contract is trading $0.0009 lower at $2.2051. The 20-day and 100-day moving averages are $2.2186 and $2.0486, respectively. The 14-day RSI is 50.56%.

Propane

• According to an OPIS survey, analysts expect propane inventories to build by 1.71 million barrels for the week ended July 2. If expectations are confirmed, inventories will fall further away from the five-year average range.
• At last look, Conway propane was down $0.00750, trading at $1.10250. Mt. Belvieu was down $0.01000, trading at $1.12000. 

Natural Gas

• The August Natural Gas contract is trading $0.005 lower at $3.591. The 20-day and 100-day moving averages are $3.436 and $3.021, respectively. The 14-day RSI is 65.57%.