Morning Highlights
Morning Highlights

10.6.21 Softer trade this morning


Katie Murphy

Oct 6, 2021

 Outlook: Softer trade this morning as markets turn their attention towards updated government inventory data due for release this morning. Crude initially attempted another run at $80 during the overnight session before falling lower. Yesterday the API reported builds across the board while analysts had been expecting crude and products to post draws. Weakness stems from both inventory pressure along with weaker equities combined with a stronger dollar. Additionally, technicals are pointing to an overbought market after recent rallies, leading to a slight pullback.

Crude

  • Yesterday afternoon the American Petroleum Institute reported that they saw crude inventories rising by 951,000 barrels in the week ending October 1. According to a Reuters’ poll, analysts are expecting a 400,000 barrel draw on this morning’s report.
  • Iraqi’s oil minister stated that $75-80 per barrel oil is a fair price for both producers and consumers, and added that Iraq plans to increase its production and export capacity in coming years.
  • Saudi Arabia was seen lowering its official selling price for crude to Asia, Europe, and the U.S. after OPEC+ decided to stick to its current production plan.
  • Overbought RSI for crude may signal for some slight pullback this week after recent strong rallies, however analysts do not think this will change the bullish tilt to the market.
  • The October crude oil contract is trading $0.90 lower at $78.03. The 20-day and 100-day moving averages are $73.29 and $69.20 respectively. The 14-day RSI is 71.15%.
  • As of 8:30 am CST: October Brent is down $0.68 at $81.88 and the U.S. dollar index is 0.351 higher at 94.326 while the nearby e-mini S&P 500 futures contract is down 36.25 points at 4297.75.

Diesel

  • Yesterday afternoon API reported that distillate stockpiles rose by 345,000 barrels, analysts are expecting a 1.0 million barrel draw.
  • The November ULSD contract is trading $0.0297 lower at $2.4639. The 20-day and 100-day moving averages are $2.2621 and $2.1332, respectively. The 14-day RSI is 76.86%.

Gasoline

  • API data reported a build of 3.682 million barrels for gasoline inventories in the week ending October 1. Analysts are forecasting this morning’s data to show a 300,000 barrel draw.
  • India’s gasoline demand was seen holding about pre-pandemic levels for the third consecutive month in September. Gasoline deliveries were also seen rising by 8.8% compared to the same month in 2019.
  • The November RBOB contract is trading $0.0367 lower at $2.3212. The 20-day and 100-day moving averages are $2.1568 and $2.0552, respectively. The 14-day RSI is 70.41%.

Propane

  • An OPIS poll estimates that this morning’s weekly inventory data will show an 806,000 barrel build for the week ending October 1.
  • At last look, Conway propane was trading down $0.00250 at $1.52000. Mt. Belvieu was trading trading down $0.00250 at $1.52000. 

  

As of 8:30 AM CST   WTI NovemberULSD NovemberRBOB NovemberNat Gas November
CONTRACT HIGH76.982.36882.36874.774
RESISTANCE80.002.51002.38006.000
PREVIOUS CLOSE78.932.49362.35796.312
GLOBEX-CURRENT78.032.46392.32125.894
SUPPORT73.142.28902.10005.500
CONTRACT LOW6.500.67240.51891.521