Outlook: Energy prices are taking a slight pause this morning after yesterday’s strong gains. Crude was seen holding near its highest level since 2018 as tight supplies continue to provide a strong fundamental base. Currently crude and products prices are slightly weaker to steady while natural gas prices continue their push higher. Some weakness this morning stems from China’s first public sale from its state reserves, additionally equities have also added some negative pressure.
- China’s first public sale of state oil reserves ended with state-owned PetroChina and private Hengli Petrochemical purchasing a total of 4.43 million barrels. Analysts expect this sale to have little impact on the market as the sale is small in comparison to China’s consumption and imports.
- The Iranian Foreign Minister stated that they will be returning to negotiating the revival of the 2015 nuclear deal “very soon”, according to Reuters.
- In order to make up for supply losses due to Hurricane Ida, U.S. oil refiners have been turning to Iraqi and Canadian oil.
- India is expected to begin favoring more lighter grade crude imports from the U.S. and Africa and move away from Middle East imports in order to yield more gasoline.
- The October crude oil contract is trading $0.07 higher at $73.37. The 20-day and 100-day moving averages are $70.17 and $68.17 respectively. The 14-day RSI is 61.24%.
- As of 8:40 am CST: October Brent is down $0.04 at $77.21 and the U.S. dollar index is 0.146 lower at 93.316 while the nearby e-mini S&P 500 futures contract is down 4.75 points at 4433.25.
- Europe diesel margins were seen passing $10 a barrel for the first time in 16 months.
- JBC energy forecasts that global jet fuel demand will rise by about 400,000 bpd in 4Q compared to 3Q. This expectation comes after the U.S. has eased travel restrictions on vaccinated foreign individuals.
- The October ULSD contract is trading $0.0041 lower at $2.2450. The 20-day and 100-day moving averages are $2.1627 and $2.1049, respectively. The 14-day RSI is 61.26%.
- The U.K. is attempting to curb panic buying of gasoline as drivers line up outside of filling stations due to shortages of truck drivers affecting deliveries to some locations.
- The October RBOB contract is trading $0.0101 lower at $2.1614. The 20-day and 100-day moving averages are $2.0867 and $2.0286, respectively. The 14-day RSI is 53.81%.
- At last look, Conway propane was trading down $0.00500 at $1.35000. Mt. Belvieu was also trading down $0.00750 at $1.34000.
Nearly four weeks after Hurricane Ida, 31 platforms remain shut with the storm wiping out 30.1 million barrels of crude so far.
|As of 8:40 AM CST||WTI October||ULSD October||RBOB October||Nat Gas October|