Outlook: Crude and products have started the week sharply lower, with the front month WTI contract down by over $2 this morning. During the overnight session, the benchmark ULSD contract threatened to slip under $2.00 before rebounding a few cents higher. Pressure continues to mount due to Delta variant concerns as new coronavirus restrictions are added in Asia. New travel restrictions in China have hit the market the hardest, with 46 cities warning again travel and limiting public transporting, including flights. Additionally, new case counts hit daily records in both Malaysia and Thailand over the weekend. New case counts are also on the rise in the U.S, causing some companies to rethink returning to in-office work. Pressure also mounted from a strengthening U.S. dollar, as the index was seen rising to a four-month high against the Euro after Friday’s U.S. jobs report. Additional market guidance this week will come from several upcoming reports, including the monthly publications from the EIA, OPEC, and IEA.
- The U.S. is now reporting a seven-day average of over 109,000 new cases as of August 5th. This shows a 28% increase in new cases since one week ago.
- China’s crude export growth for July slowed by more than analysts’ expectations, due in part to rising covid cases and seasonal floods. Exports were up by just 19.3% YoY compared to expectations of a 20.8% increase.
- Saudi Aramco’s profits for Q2 were seen soaring due to higher energy prices and demand recovery.
- The CFTC reported that last week crude specs sold a total of 17,533 contracts, bringing the new net long position down to 509,158.
- The September crude oil contract is trading $2.11 lower at $66.17. The 20-day and 100-day moving averages are $70.74 and $66.42 respectively. The 14-day RSI is 35.69%.
- As of 8:35 am CST: September Brent is down $1.87 at $68.83, the U.S. dollar index is 0.040 lower at 92.760 while the nearby e-mini S&P 500 futures contract is down 6.0 points at 4423.5.
- Last Friday’s Commitment of Traders report stated that Heating oil specs bought a total of 1,661 contracts and brought their net long up to 28,468 contracts.
- The September ULSD contract is trading $0.0545 lower at $2.0300. The 20-day and 100-day moving averages are $2.1155 and $2.0191, respectively. The 14-day RSI is 38.63%.
- Last Friday’s Commitment of Traders report stated that RBOB specs bought a total of 3,816 contracts and brought their net long up to 40,792 contracts.
- The September RBOB contract is trading $0.0532 lower at $2.2037. The 20-day and 100-day moving averages are $2.2491 and $2.1023, respectively. The 14-day RSI is 44.27%.
- Fundamentals continue to signal to a more bullish feel for the propane market, with the value of Conway moving from 64% of crude to 68% last week. With crude sharply lower this morning however, prices have fallen slightly.
- At last look, Conway propane was trading down $0.01250 at $1.10000 and Mt. Belvieu was trading down $0.01000 at $1.09000.
- Power demand in Texas is expected to hit a 2021 high during this week’s heat wave.
- The September Natural Gas contract is trading $0.059 lower at $4.095. The 20-day and 100-day moving averages are $3.930 and $3.231, respectively. The 14-day RSI is 63.98%.
|As of 8:35 AM CST||WTI September||ULSD September||RBOB September||Nat Gas September|