Morning Highlights
Morning Highlights

7.12.21 Concern about the delta variant in Europe and Asia and a strong dollar assist to pressure energies lower.

Tony Headrick

Jul 12, 2021

Outlook: Concern about the delta variant in Europe and Asia and a strong dollar assist to pressure energies lower. The energy complex has moved above earlier lows in part with focus on reduced crude inventory in Cushing, OK. Uncertainty surrounding failure of OPEC+ to come to agreement on production policy can remain a point that keeps sellers engaged. Choppy trade can be anticipated in the near term.  


  • Genscape this morning showed crude stocks held in Cushing, OK fell 1.63 million barrels from Friday July 2 to Friday July 9.
  • Russia’s President Putin doesn’t have any plans to discuss the oil market situation with other OPEC+ leaders. A discussion between Putin and US President Joe Biden on Friday apparently did not involve discussions on oil.
  • Tomorrow the IEA releases its monthly oil market report and OPEC will release its monthly on Thursday.
  • Saudi Aramco offered full volumes for August for six refiners in Asia and three in Europe.
  • Limetree is preparing for a bankruptcy filings after shutting its refinery in the US Virgin Islands it was attempting to restart after years of being shut.
  • There are 86 oil tankers signaling China as of July 9, up from 84 on July 2. Ships bound for the US increased by four over the same timeframe to 19.
  • There is no fresh news with respect to Iranian nuclear negotiations.
  • As of 9:59 am CDT: September Brent is down 56 cents to 74.99, the U.S. dollar index is 0.055 higher at 92.185 while the nearby e-mini S&P 500 futures contract is up 11.25 points at 4,371.25.


  • Current US diesel held in inventory stands at 139 million barrels, down from 177 million barrels a year ago and up from 131 million barrels two years ago.
  • Diesel inventories held in the Midwest have been increasing since late May and at 31.9 million barrels are back to the five year average level. Crude oil inputs to refiners in the Midwest stood at 4.125 million bpd to July 2, up from 4.039 two-years prior.
  • McKinsey and Co said the announce global refinery closures of 2.5 million bpd from 2021 to 2024 will keep the product market balanced into 2025. They expect another wave of closures in 2029 in China and other Asian and European refiners. By 2035 McKinsey forecasts capacity will have been reduced by 5 million bpd and is subject to change based on how an energy transition goes.


  • Nearby RBOB is down near a penny after having traded more than three cents lower earlier. With current trade at 2.2800, last week’s high of 2.3302 is resistance and trendline support is near 2.1850.
  • US refiners should continue to operate at strong rates considering demand has been strong and current gasoline stockpiles in the US are trending lower.


  • Propane values were down more than a penny earlier but should be trending higher as WTI is above earlier lows.

Vortexa sees 93.12 million barrels of oil on tankers on July 9 that have been stationary for at least seven days, up from 91.37 million barrels on July 2. Although up w/w, crude held on tankers is down 51% from a year ago when the pandemic had forced crude into storage.