Outlook: The energy complex is seeing an additional lift after yesterday’s reversal higher but is fading off highs amid a setback in equities and a stronger US dollar. The non-farm payrolls report showed 210,000 jobs added in November, well below consensus expectations for an increase of 550,000. President Biden spoke on the economy and touched on gasoline prices. “Since the end of October, the average weekly price of gasoline on the wholesale market – that’s what you sell to the gas stations – has fallen around 10%. These savings are beginning to reach Americans and should pick up in the weeks ahead.” He credited the announcement of the release of strategic reserves from a number of consuming nations including the U.S and noted that China may do more. Meanwhile, nuclear talks with Iran are set to resume in the middle of next week. With regard to yesterday’s OPEC+ decision to increase oil production in January by 400,000 bpd, the market took it as supportive that the group left the door open to reverse that decision at any moment considering the omicron variant has made the demand outlook uncertain.
As we are seeing interest in forward coverage for next year and the year beyond here I’m showing the June 2022 specific ULSD contract. You can note that moves this week stretched below the 200-day moving average but current trade has made its way back to that price point at 2.0537.
