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Outlook: Energies were seen falling sharply lower during the overnight session, with WTI hitting its lowest level since May. Both crude and products now all sit below their 100 day moving averages. Weakness stems from this week’s disappointing gasoline stats along with continued Delta variant concerns. During yesterday’s Fed meeting, the bank has announced that it would be scaling back its pace of stimulus. In order to help support the economy during the pandemic, the Fed had been buying $120 billion of assets each month, helping to support commodities. After related headlines were reported, the U.S. dollar index was also seen strengthening, placing further pressure onto commodities. Overall, the resurgence of Covid-19 across the globe is likely to continue creating a more fragile economic environment, and in turn reduce traders risk appetite.

Crude

• Saudi Arabia is reportedly not “keen” on Biden’s call to raise oil production in order to alleviate high gasoline prices, and plans to likely pause oil supply hikes due to the recent sell-off.
• Limits on imports has caused Singapore’s fuel stocks to fall to an over 5-month low.
• The approval of the ConocoPhillips oil field project in Alaska by the Trump administration was voided by a federal judge late Wednesday.
• Asia’s physical crude oil market has softened due to slow Chinese buying and India’s decision to sell from its strategic reserves.
• The September crude oil contract is trading $2.14 lower at $63.32. The 20-day and 100-day moving averages are $68.87 and $66.48 respectively. The 14-day RSI is 31.85%.
• As of 8:30 am CST: September Brent is down $1.92 at $66.31, the U.S. dollar index is 0.259 higher at 93.395 while the nearby e-mini S&P 500 futures contract is down 24.75 points at 4369.75.

Diesel

• With ULSD prices initially leading the way lower during the overnight, the contracts have now fallen below both the 100 day MA and $2.00 mark.
• The September ULSD contract is trading $0.0536 lower at $1.9676. The 20-day and 100-day moving averages are $2.1014 and $2.0408, respectively. The 14-day RSI is 34.20%.
  

Gasoline

• Preliminary gasoline sales data from OPIS for the week ending August 14 showed that sales were just 2.4% higher than the same period last year, and 11.4% lower than 2019 levels.
• The September RBOB contract is trading $0.0734 lower at $2.0743. The 20-day and 100-day moving averages are $2.1113 and $2.0005, respectively. The 14-day RSI is 33.66%.
  

Propane

• A surge in petrochemical demand for propane in China, along with tight stocks and the onset of winter is expected to aid in the continued run up of LPG prices.
• At last look, Conway propane was trading down $0.01500 at $1.15500. Mt. Belvieu was trading down $0.00500 at $1.13500.