Outlook: Energies are mixed this morning in front of weekly inventory stats from the EIA set for 9:30 am CDT. WTI is slightly lower, ULSD is up a penny while RBOB has tacked on 4 cents. The US dollar is higher and equities are near unchanged. OECD inventories have continued to decline despite the Delta variant but concern remains about demand, particularly for jet fuel. Considering recent volatility and price movements, today's stats should provide the key input for the balance of the day's trade.
Crude
- Yesterday afternoon an industry group predicted that last week US crude oil inventories 1.6 million barrels while Cushing, OK inventories fell 485,000 barrels.
- A Reuters poll suggests the EIA today may report US crude oil inventories fell 2.7 million barrels last week. A Bloomberg poll suggests a 2.3 million barrel draw.
- The US announced plans to restart oil and gas leasing on federal land and waters, particularly in the US Gulf of Mexico.
- The Federal Reserve meets in a virtual Jackson Hole conference and the market awaits insight into tapering plans. The symposium starts tomorrow.
- Energies have seemed to shift focus from the Covid Delta variant and its impact on demand particularly in Asia to the FDA’s approval of the Pfizer vaccine for ages above 16.
- As of 9:07 am CDT: October Brent is $0.10 higher at 71.15, the U.S. dollar index is 0.129 higher at 93.022 while the nearby e-mini S&P 500 futures contract is up 3.75 points at 4,486.25.
Diesel
- Yesterday afternoon an industry group predicted that last week distillate inventories fell 245,000 barrels.
- A Reuters poll suggests today the EIA may report a 271,000 barrel draw in US distillate inventories. A Bloomberg poll suggests an 852,000 barrel draw.
- The global airline industry continues to struggle with activity 30% less than 2019 (about 2 million bpd) and 7% below last month (about 350,000 bpd).
Gasoline
- Yesterday afternoon an industry group predicted that last week gasoline inventories fell 985,000 barrels.
- A Reuters poll suggests today the EIA may report a 1.6 million barrel draw in US gasoline inventories. A Bloomberg poll suggests a 1.6 million barrel draw.
Propane
- An OPIS poll suggests today the EIA may report a 1.1 million barrel build in US propane inventories. At this stage of the game it is unlikely US and Midwest propane inventories will reach near the 5-year average level in early October before seasonal draws begin. This should keep propane values well supported outside of a sharp setback in WTI, which at this time seems unlikely.
Continuous Daily RBOB: After falling below the 100-day moving average and a poor weekly settle, we have seen a strong 3-day advance. A bullish move from here would need the help of supportive fundamental headlines to get back to trendline resistance near 2.40. The 100-day acts as support at 2.1665 followed by rough trendline support near 2.1300.
