Outlook: Energies are trading higher this morning on an optimistic demand outlook. Travel demand appeared to be strong with over 5 million people passing through airport security on. The CDC reduced isolation time to 5 days, which supports the narrative that the omicron variant is less severe and the market may continue to shrug off increases in infection rates. Reuters initial estimates are showing another draw for crude which would be the 5th straight week of inventory declines. API stats are due this afternoon and EIA stats are set for tomorrow morning.
Crude
- Saudi Aramco may cut the official selling price of Arab light crude by $1.25 a barrel for February to Asian customers due to softer demand.
- Chinese oil demand for transport may peak by 2025 due to increasing numbers of electric vehicles, according to CNPC’s Economics & Technology Research Institute.
- Mexico will stop exporting crude in 2023 according to Pemex CEO in efforts to supply domestic demand.
- December loading shipments of clean fuels from Asia to the U.S. fell by 305,000 tons compared to 365,000 tons the week prior.
- The CDC reduced the recommended isolation for asymptomatic people with Covid-19 from ten to five days.
- Managed money participants increased crude net length by 5.6k lots through last Tuesday.
- The API will report inventory data at 3:30 CST today.
- As of 10:20 am CST: Brent crude oil up $0.43 to $79.03, US dollar index up 0.100 to 96.193 while the nearby e-mini S&P 500 futures contract is up 4.75 points to 4,787.00.
Diesel
- Heating oil is leading products this morning with nearby February trading 1.94 cents higher to 2.3729. Today’s high was 2.3978.
- TSA estimated 5.3 million people passed through U.S. airport security screening Sunday.
Gasoline
- RBOB trades just over a penny higher in the nearby contract at 2.2446, essentially at the 100-day moving average on the continuous chart.
- Reuters initial estimate has gas inventories unchanged.
Propane
- Temperature maps show the U.S. to experience normal and below temps for the next two weeks.
Natural Gas
- Natural gas futures moved above the 200-day moving average yesterday on the continuous chart and acted as support today. Current trade is down 4.2 cents at 4.018 and the 200-day comes in at 3.963.
- European storage remains 23% below the five-year average.
- The number of U.S. LNG cargoes heading for Europe jumped by one-third.
- European forecast shows below normal temps for the second week in January.
Continuous Daily RBOB: The recent move higher has positioned RBOB back to its 100-day moving average (purple line) which trade is grappling with currently. The 50-day (blue line) is nearby resistance at 2.2578 while the 200-day (red line) would act as support upon a setback at 2.1895.
