Outlook: Energy markets trade higher this morning as the look to lock in strong gains for the week. WTI also nears $80 again this morning, a level not hit since 2014. Currently oil is up by about 4% on the week. Support comes from The U.S. Energy Department’s statement that there were no plans “at this time” to release supplies from the strategic oil reserves or halt exports. Supply tightness continues to support prices, especially as OPEC+ only plans for a gradual boost in supply next month while analysts see demand increasing at a faster rate. Currently benchmark European gas prices at the Dutch TTF hub stand at a crude oil equivalent of about $200 a barrel. Markets will likely continue to trend higher as demand from the natural gas market is expected to spill over into crude and products.
Crude
- This morning’s Labor Department employment report showed a slowdown in new nonfarm payrolls, with an increase of just 194,000 jobs in September compared to 366,000 jobs in August. The unemployment rate however fell from 5.2% in August to 4.8%.
- Russia’s idle primary oil refinery capacity is seen down by 41% in November compared to October.
- China has ordered an immediate increase in cord output in order to help curb energy supply tightness.
- Chinese crude oil futures in Shanghai were seen jumping by as much as 7% after the week-long holiday break.
- The October crude oil contract is trading $1.35 higher at $79.65. The 20-day and 100-day moving averages are $74.26 and $69.48 respectively. The 14-day RSI is 71.55%.
- As of 8:45 am CST: October Brent is up $1.06 at $83.01 and the U.S. dollar index is 0.075 lower at 94.142 while the nearby e-mini S&P 500 futures contract is up 6 points at 4396.
Diesel
- India is prepared to boost refiner operating rates in order to help support increases in demand the country has been seeing.
- Distillate stockpiles were seen falling in three of five key trading hubs, U.S., Singapore, and Amsterdam-Rotterdam-Antwerp, as the gas-to-oil switch helps boost demand.
- China’s jet fuel exports last month were seen reaching their highest level since April of 2020.
- The November ULSD contract is trading $0.0282 higher at $2.4878. The 20-day and 100-day moving averages are $2.2949 and $2.1411, respectively. The 14-day RSI is 74.37%.
- Panic buying in the U.K. more than doubled fuel sales for the country and left 85% of the stations empty.
- The November RBOB contract is trading $0.0261 higher at $2.3605. The 20-day and 100-day moving averages are $2.1835 and $2.0629, respectively. The 14-day RSI is 70.87%.
Propane
- At last look, Conway propane was trading down $0.00500 at $1.47000. Mt. Belvieu was trading down $0.00250 at $1.46000.
| As of 8:45 AM CST | WTI November | ULSD November | RBOB November | Nat Gas November |
|---|---|---|---|---|
| CONTRACT HIGH | 76.98 | 2.3688 | 2.3687 | 4.774 |
| RESISTANCE | 80.00 | 2.5100 | 2.3800 | 6.000 |
| PREVIOUS CLOSE | 78.30 | 2.4596 | 2.3344 | 5.677 |
| GLOBEX-CURRENT | 79.65 | 2.4878 | 2.3605 | 5.615 |
| SUPPORT | 73.14 | 2.2890 | 2.1000 | 5.500 |
| CONTRACT LOW | 6.50 | 0.6724 | 0.5189 | 1.521 |
