Outlook: Energy markets continue their push higher, with WTI recouping most of Monday’s sharp loss and posting its largest gain in three months. Support stems from expectations of demand recovery and tightening global markets. Road traffic data along with implied demand numbers are pointing to more normal levels of travel across the globe. Markets seem to have shaken off concerns regarding Covid-19 for the meantime. Traders have come to the consensus that the small OPEC+ production increase will not be enough to avoid tightening stocks in coming months. Equities on the other hand are a little softer this morning after the Jobless Claims report showed a surprise increase in initial claims.
- Iran has opened a new oil pipeline and loading terminal in the Gulf of Oman in order to bypass the Strait of Hormuz choke-point.
- The Labor Department reported that initial jobless claims unexpectedly jumped to 419,000 last week, compared to an expected drop to 350,000.
- China is reportedly planning to release about 22 million barrels of oil from its strategic state reserves to major refineries in order to curb inflation.
- The August crude oil contract is trading $0.60 higher at $70.90. The 20-day and 100-day moving averages are $72.01 and $65.36 respectively. The 14-day RSI is 49.13%.
- As of 9:15 am CST: August Brent is up $0.21 at $72.44, the U.S. dollar index is 0.023 higher at 92.777 while the nearby e-mini S&P 500 futures contract is up 2.5 points at 4353.
- American and Southwest airlines posted large profits for the second quarter as they saw a surge in travel demand due to loosening travel restrictions.
- The August ULSD contract is trading $0.0135 higher at $2.1005. The 20-day and 100-day moving averages are $2.1207 and $1.9917, respectively. The 14-day RSI is 48.38%.
- Russian Energy Minister Nikolai Shulginov stated that the country may start banning gasoline exports to help stabilize domestic fuel prices.
- The August RBOB contract is trading $0.0274 higher at $2.2441. The 20-day and 100-day moving averages are $2.2250 and $2.0620, respectively. The 14-day RSI is 51.06%.
- Despite yesterday’s larger than expected inventory build, propane prices still find support from rallies in the crude market, with the current propane to crude ration remaining at 65%.
- At last look, Conway propane was up $0.01000, trading at $1.08500. Mt. Belvieu was up $0.01000, trading at $1.08500.
- Estimates for this morning’s Natural Gas Storage Report range from a builds of 30 to 60 Bcf.
- The August Natural Gas contract is trading $0.009 lower at $3.950. The 20-day and 100-day moving averages are $3.666 and $3.084, respectively. The 14-day RSI is 74.64%.
Summer U.S. natural gas prices in June averaged at their highest level since 2014.
|As of 9:15 AM CST||WTI August||ULSD August||RBOB August||Nat Gas August|