Outlook: The energy market is trending lower this morning as crude looks to lock in its largest monthly loss since October. As of yesterday’s close, October WTI was down $4.02 for the month. Analysts continue to watch for updates regarding Hurricane Ida and also turn their attention towards tomorrow’s OPEC+ meeting. The group is expected to keep its current output policy unchanged and continue with its planned 400,000 bpd increase. OPEC+ currently sees global oil markets in a deficit for the remainder of 2021 before flipping to a surplus in 2022 as supplies recover. Data being presented to the JTC today showed that world inventories will decrease by an average rate of 825,000 bpd if the group continues with its planned 400,000 bpd increase.
- A Reuters poll showed today that analysts expect oil prices to struggle to break out of current ranges, and likely stabilize below $70 in 2021 due to slow demand recovery.
- According to a Reuters survey, OPEC’s August production rose by 210,000 bpd from July, while compliance stayed steady at 115%. Saudi Arabia posted the largest monthly increase of 180,000 bpd.
- The U.S. State Department has increased its travel advisory for Canada to “do not travel” as the Covid-19 pandemic continues. The EU has also removed the U.S. from its list of Covid-safe countries during a meeting yesterday.
- Traders and analysts are reporting that China has begun to increase its buying pace of crude as the country seems to be recovering after nearly five months of dull demand.
- The October crude oil contract is trading $0.52 lower at $68.69. The 20-day and 100-day moving averages are $67.25 and $67.17 respectively. The 14-day RSI is 52.06%.
- As of 8:45 am CST: October Brent is down $0.50 at $72.91 and the U.S. dollar index is 0.159 lower at 92.494 while the nearby e-mini S&P 500 futures contract is down 6.25 points at 4519.
- ULSD futures are expected to have a more orderly day as we head into expiration with the September contract close to equal with the more active October contract.
- The September ULSD contract is trading $0.0203 lower at $2.1200. The 20-day and 100-day moving averages are $2.0666 and $2.0611, respectively. The 14-day RSI is 53.56%.
- Floods and power outages are slowing efforts by energy firms to assess damages at refineries. Analysts believe that it could take two to three weeks for Louisiana refineries to fully resume.
- GasBuddy expects that Hurricane Ida will cause retail gas prices to jump to their highest levels seen on Labor Day weekend since 2014.
- The EPA has issued RVP waivers to Louisiana and Mississippi refineries in order to help improve fuel supply as Hurricane Ida effects are expected to linger for some time.
- The September RBOB contract is trading $0.0425 lower at $2.2702. The 20-day and 100-day moving averages are $2.0795 and $2.0245, respectively. The 14-day RSI is 53.70%.
- Yesterday’s crop progress report kept G/E ratings for corn unchanged at 60% and showed corn dented at 59% compared to the 5-year average of 55%.
- At last look, Conway propane was trading down $0.00500 at $1.14500. Mt. Belvieu was trading down $0.00500 at $1.14000.
|As of 8:45 AM CST||WTI October||ULSD September||RBOB September||Nat Gas September|