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Outlook:  Oil and product prices rise higher to start the week as the supply crunch continues to provide a strong fundamental base. Natural gas prices also surge higher, with the benchmark contract currently up by over 30 cents. Brent prices currently sit close to topping $80, while WTI trades above $75. Many analysts expect these rallies to continue into next year as supplies fail to keep up with recovering demand. Some analysts even see Brent prices hitting $90 by year end, with Goldman Sachs stating that the market may be in a bigger deficit than many realize. Overall fundamentals will likely continue to support rallies in the crude and energy markets in the near term.

Crude

• Trafigura, the world’s second largest independent oil trader, expects that markets will continue to rise over the next two years as supplies struggle to keep up with recovering demand.
• Analysts see the oil market heading into a supply shock as companies push towards cleaner energy and lower their investments into fossil fuels. The amount of money seen going into upstream fossil fuel projects has fallen from $650 billion before the pandemic to near just $300 billion.
• TotalEnergies stated in an updated report today that it sees world oil demand peaking before 2030, earlier than previously forecast.
• The October crude oil contract is trading $1.52 higher at $75.50. The 20-day and 100-day moving averages are $70.58 and $68.30 respectively. The 14-day RSI is 68.67%.
• As of 8:45 am CST: October Brent is up $1.61 at $79.70 and the U.S. dollar index is 0.093 higher at 93.420 while the nearby e-mini S&P 500 futures contract is down 16.25 points at 4429.50.

Diesel

• As the crude market continues to heat up and ULSD also finds seasonal strength, the benchmark futures contract was seen hitting a new three year high, surpassing $2.30 during overnight trade.
• The October ULSD contract is trading $0.0424 higher at $2.3095. The 20-day and 100-day moving averages are $2.1745 and $2.1082, respectively. The 14-day RSI is 69.35%.
  

Gasoline

• Electric car sales in the EU were seen surpassing diesel car sales in August for the first time ever, with EV and hybrid sales making up 21.3% of all registrations during the month.
• BP reported that nearly one third of its gas stations in the U.K. had ran out of their standard grades of gasoline following panic buying at the end of last week.
• The October RBOB contract is trading $0.0243 higher at $2.2118. The 20-day and 100-day moving averages are $2.0940 and $2.0315, respectively. The 14-day RSI is 61.30%.
  

Propane

• Prices follow the crude market this morning, with Conway starting the week on a strong foot, up by nearly 3 cents.
• At last look, Conway propane was trading up $0.02750 at $1.38000. Mt. Belvieu was also trading up $0.03500 at $1.37750.