Morning Highlights
Morning Highlights

08.20.21 Another Covid-related setback...

Tony Headrick

Aug 20, 2021

Outlook:  Energies are lower with products leading. Pressure continues to stem from Delta variant concerns. WTI is on track for a 10% weekly drop and a seventh day of losses.


  • With Covid cases increasing and missteps in Chinese economic data, OPEC+ may choose to delay their production schedule which are currently set for increases of 400,000 bpd per month. Don’t be surprised to hear more about this from Saudi Arabia or others in the group over the weekend.
  • Apple, along with many other companies has delayed its return to office plan until January.
  • The Federal Reserve will hold its annual symposium next week starting Thursday in Jackson Hole and markets will be looking for more clarity after meeting minutes from their last meeting signaled they are prepared to start trimming bond purchases later this year.
  • Ninety supertankers are scheduled for China in the next three months, Bloomberg tracking data showed. China’s apparent oil demand fell 2.3% y/y in July to 13.47 million bpd, SCI99 showed.
  • As of 11:39 am CST: Brent is down $1.00 at $65.45, the U.S. dollar index down 0.095 lower at 93.473 while the nearby e-mini S&P 500 futures contract is up 34.75 points at 4436.25.


  • Trading near $1.92, nearby ULSD is trading at levels not seen since early May and well off the peak of $2.21 in early July. The $1.93 price is the 23.6% retracement from the November to July move higher.
  • Singapore’s middle distillate stockpiles, comprised mostly of diesel, have fallen to the lowest level since January 2020 due to a slump in shipments from China.


  • RBOB crack spreads and RBOB timespreads have been moving lower. A setback in demand and an increase in supplies as reported by the EIA on Wednesday continue to provide input and support the narrative that demand is being impacted as US Covid cases increase. Return-to-work delays and the unofficial end to the driving season coming up in early September provide additional weight.   
  • The EPA is set to send proposed 2021 and 2022 biofuel blending quotas to the White House for review as soon as this afternoon.


  • Propane is trading down more than 2 cents in both Conway and Mont Belvieu.

Energies have been weaker with Covid cases on the rise in the US and elsewhere.