Outlook: Earlier futures gains have morphed to losses across the energy complex. Oil is set for its weakest week since March. Overnight and earlier gains were found on short covering in Asia before selling emerged. Poor consumer sentiment readings and a stronger dollar act to provide pressure to outright futures and timespreads are weaker as well. WTI is eyeing $70 after trading to as high as $76.98 last week. The Baker Hughes rig count is due at noon and CFTC Commitment of Traders data is set for this afternoon.
Crude
- In its monthly report OPEC said its members increased production last month by 600,000 bpd, above expectations. They also said they anticipated global demand will reach pre-Covid levels by next year.
- Saudi Arabia and the UAE have reached an apparent compromise but so far there has not been a new meeting setup with other OPEC+ members. The next scheduled meeting is for early August and at this point they may just wait for that. There is concern that potential concessions allowed for the UAE which would increase its base production level would lead to others including Iraq to want their levels increased as well.
- US retail sales were up 0.6% in May m/m, above consensus expectations for a 0.4% drop.
- The preliminary Michigan Consumer Sentiment Index for July was 80.5. Economists had predicted an 86.5 reading.
- Los Angeles County will re-impose mask wearing requirements indoors amid an influx in Covid cases in recent weeks. Canada may reopen its border to the US in August for those that have been vaccinated, but the reopening would be conditional on continued progress on Covid-19 vaccinations in Canada, Prime Minister Justin Trudeau said.
- As of 10:03 am CDT: September Brent is 59 cents lower to 72.88, the U.S. dollar index is 0.075 higher at 92.700 while the nearby e-mini S&P 500 futures contract is down 14.00 points at 4,338.00.
Diesel
- ULSD tested its 50-day moving average which comes in at 2.0921 with current trade at 2.1094. On a continuous chart, ULSD has not closed below its 50-day since early April.
- All monitored units were seen shut down at Marathon’s 266,000 bpd Robinson, Illinois refinery this morning, Genscape showed. Monitored units include the 266,000 bpd CDU, 67,900 bpd VDU, 48,000 bpd FCC, 38,000 bpd catalytic reformer, 36,100 bpd catalytic reformer, 37,100 bpd hydrotreater and a cogeneration unit. Previous outages like this have occurred due to power related issues. A Marathon spokesman said the company does not comment on its operations.
Gasoline
- RBOB is currently trading down 25 points to $2.2478 after trading down to as low as $2.2206. The overall trend in RBOB remains higher with trendline support at $2.2000.
- Sales of gasoline in India rose 3.44% in July above corresponding 2019 sales levels. However diesel sales were 10.7% less.
Propane
- Propane held steady yesterday despite a drop in WTI as supplies remain seasonally tight for this time of year.
Continuous Daily RBOB: Despite weakness in recent days, RBOB remains in an uptrend with trendline support at 2.2000. Resistance comes in at recent highs near 2.3200.
