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Outlook: Crude oil markets slipped overnight and are expected to take a slight breather after the recent volatile swings in the market. RBOB and ULSD markets have also slipped lower this morning after seeing quiet two sided trade overnight. Prices are expected to end the week mostly steady after making up for the near 7% loss seen on Monday. Equities however manage to trade higher this morning, with the Dow, S&P 500, and Nasdaq all poised to lock in their fourth consecutive week of gains. Currently traders still see demand outpacing supply despite the scheduled increase in OPEC production. Covid-19 concerns still persist, but markets seem to have shaken them off for the meantime. In the latest seven-day average from the CDC, new Covid cases were up by 65%. The CDC also states that the delta variant is one of the most infectious respiratory diseases seen by scientists.

Crude

• The Olympics’ opening ceremony began this morning, with the IOC stating that organizers have done everything they can in order to ensure safe games.
• Typhoon In-fa is expected to make landfall in Zhejiang China this weekend, home to some of the country’s largest oil storage tanks and refineries.
• Top oil service companies Schlumberger and Baker Hughes Inc expect U.S. shale growth to slow this year due to decreased spending by producers.
• The August crude oil contract is trading $0.30 lower at $71.61. The 20-day and 100-day moving averages are $72.04 and $65.52 respectively. The 14-day RSI is 52.71%.
• As of 8:50 am CST: August Brent is down $0.27 at $73.52, the U.S. dollar index is 0.107 higher at 92.929 while the nearby e-mini S&P 500 futures contract is up 20 points at 4379.5.

Diesel

• Despite Monday’s sharp fall lower, the benchmark ULSD contract has managed to not only regain Monday’s losses but also take out the highs seen last Friday. Additionally the contract posted its largest three day dollar gain since June of 2020.
• The August ULSD contract is trading $0.0062 lower at $2.1264. The 20-day and 100-day moving averages are $2.1212 and $1.9955, respectively. The 14-day RSI is 53.02%.

Gasoline

• India’s largest oil refiner plans to embark on a $13 billion expansion as it expects fossil fuels to continue to be a large part of the country’s energy needs.
• If market conditions allow, Mercedes Benz plans to go all-electric for their vehicles by the end of the decade.
• The August RBOB contract is trading $0.0040 lower at $2.2692. The 20-day and 100-day moving averages are $2.2264 and $2.0667, respectively. The 14-day RSI is 54.62%.

Propane

• Propane is trading higher again today, as inventory tightness and strength in crude continues to support markets.
• At last look, Conway propane was up $0.00750, trading at $1.10000. Mt. Belvieu was up $0.00500, trading at $1.09750. 

Natural Gas

• The August Natural Gas contract is trading $0.011 higher at $4.014. The 20-day and 100-day moving averages are $3.697 and $3.094, respectively. The 14-day RSI is 76.69%.