Outlook: Energies are above overnight lows, traded into the positive and are back lower. There is limited fresh news and the market is choppy. The US dollar is under pressure, providing what looks to be the main catalyst to buyers in crude and products. Equities are erring lower and the delta variant continues to be monitored. The current environment is an uncertain and one to keep your DPR in a relatively even position.
- On Friday Baker Hughes showed weekly US oil rig counts up 7. Permian was +5, Eagle Ford -2, Granite Walsh +1, Ardmore Woodford +1.
- CFTC data released on Friday showed a sharp reduction in non-commercial length of nearly 56,000 contracts in WTI in the week ended July 20. This data encompassed Monday’s large sell-off.
- New US home sales in June fell 6.6% to an annualized rate of 676,000. This was well under 796,000 estimated.
- Daily covid cases globally are estimated at 535,000 per day compared to 404,000 a month ago. New cases are being led higher in Southeast Asian countries.
- Exxon shut its 120,000 bpd Slagen refinery in Norway in June and have converted it into a fuel import terminal. This leaves Equinor’s Mongstad refinery as the only refinery in Norway.
- A two-day Federal Reserve meeting starts on Tuesday and investors will monitor how the central bank will address monetary policy considering inflation pressures in recent months.
- Large tech companies Alphabet, Apple and Microsoft release quarterly earnings this week.
- After bouncing off the $30,000 zone since May, bitcoin may be breaking out higher today with current trade $39,000, up near $6,000 on the day.
- As of 9:43 am CDT: September Brent is down $0.15 to $73.95, the U.S. dollar index is 0.331 lower to 82.581 while the nearby e-mini S&P 500 futures contract is down 3.50 points at 4,399.50.
- After a volatile week last week, Friday and so far today’s trade action has been relatively subdued. Overnight losses in ULSD have come back and currently trade is near even on the day.
- BP Whiting, IN is keeping its largest 102,000 bpd coker unit shut since it started repairs on a leak a week ago. As a result, the 243,500 bpd crude unit has been running at reduced rates. Downtime is expected for another week. Chicago ULSD basis has been moving higher and at +2.75 over futures has moved up more than 5 cents since early July.
- CFTC data released on Friday showed an increase in non-commercial length of nearly 2,000 contracts in ULSD to a net long 23,392 in the week ended July 20. The increase came despite last Monday’s big sell-off.
- RBOB is trading near even as the morning moves forward. US gasoline demand was said to be strong over the weekend according to GasBuddy. The delta variant continues to be monitored as it relates to gasoline demand. Many companies are scheduled to bring employees back after Labor Day in early September. The risk for gasoline is if the delta variant pushes return-to-work plans back at a time when seasonally gasoline demand falls anyways.
- CFTC data released on Friday showed a sharp reduction in non-commercial length of nearly 20,000 contracts in RBOB to 29,497 long in the week ended July 20.
- A 65,000 bpd FCC unit was shut over the weekend at Valero’s Houston, TX refinery, Wood Mac/Genscape showed.
- With production holding relatively steady, a strong export program to countries like China, India and Japan has kept domestic inventories on the low side, which should keep a bid under propane values.
There are some that say the U.S. government should sell more oil that is being held in the Strategic Petroleum Reserve in an attempt to lower gasoline prices. Here is the current inventory of oil in the SPR going back to 2000. Lately stocks held have been declining and some say at 621 million barrels it’s still more than what is needed.
|As of 9:40 AM CDT||WTI Sep||ULSD Aug||RBOB Aug||Nat Gas Aug|