Morning Highlights
Morning Highlights

9.29.21  Energy prices have fallen lower this morning in front of government inventory data


Katie Murphy

Sep 29, 2021

Outlook:  Energy prices have fallen lower this morning in front of government inventory data as investors seem to be reevaluating markets after the recent rallies. Pressure stems from a surprisingly bearish inventory report from the API, showing large builds across the board. If confirmed by the EIA this morning, a build in crude stocks would break the trend of draws seen over the past eight consecutive weeks. Attention also remains on OPEC+ proceedings that are scheduled to commence next week. Analysts expect that the group will keep its current production plans the same despite recent tightness and high prices. The U.S. dollar index also continues to rise higher, sitting near a 52 week high, leading to additional pressure on energy markets this morning.

Crude

  • The American Petroleum Institute reported that they saw U.S. crude stocks rising by 4.1 million barrels for the week ending September 24. A Reuter’s poll reports that analysts expect a 1.7 million barrel draw on this morning’s EIA report.
  • According to Abderrezak Benyoucef, head of OPEC’s energy studies department, Non-OPEC crude supply is expected to peak at 48 million bpd in 2025 before slipping to 39.3 million bpd by 2045.
  • The OPEC+ Joint Technical Committee reportedly sees the oil market in a 1.4 million bpd surplus in 2022 compared to the previous forecast of 1.6 million bpd. This forecast assumes demand growth of 4.2 million bpd next year.
  • The October crude oil contract is trading $0.24 lower at $75.05. The 20-day and 100-day moving averages are $71.22 and $68.53 respectively. The 14-day RSI is 65.79%.
  • As of 9:00 am CST: October Brent is down $0.66 at $78.43 and the U.S. dollar index is 0.269 higher at 94.035 while the nearby e-mini S&P 500 futures contract is up 28.25 points at 4371.75.

Diesel

  • Yesterday afternoon the API reported that U.S. distillate stocks rose by 2.5 million barrels compared to analysts’ expectations of a 1.6 million barrel draw.
  • The October ULSD contract is trading $0.0032 lower at $22858. The 20-day and 100-day moving averages are $2.1895 and $2.1136, respectively. The 14-day RSI is 66.29%.

Gasoline  

  • Yesterday afternoon the API reported that U.S. gasoline stocks rose by 3.6 million barrels compared to analysts estimates for a 1.4 million barrel build.
  • The U.K. has deployed its reserve tanker fleet in order to help aid in fuel shortages across the country.
  • The October RBOB contract is trading $0.0008 lower at $2.2011. The 20-day and 100-day moving averages are $2.1018 and $2.0365, respectively. The 14-day RSI is 57.57%.

Propane

  • U.S. propane inventories are expected to post of build of about 700,000 barrels on this morning’s inventory report. Tight stocks continue to give support to markets with some spillover strength also expected to stem from the natural gas market.
  • At last look, Conway propane was trading up $0.03000 at $1.45750. Mt. Belvieu was also trading up $0.03750 at $1.47500. 
As of 9:00 AM CST   WTI OctoberULSD OctoberRBOB OctoberNat Gas October
CONTRACT HIGH76.982.31752.36874.774
RESISTANCE73.142.21012.20006.000
PREVIOUS CLOSE75.292.28902.20195.880
GLOBEX-CURRENT75.052.28582.20115.595
SUPPORT67.122.09112.10005.500
CONTRACT LOW6.500.67240.51891.521