Nymex Globex trades normal hours today.
Outlook: Energies are starting the day lower with crude down just shy of a dollar. Despite today’s pullback, the story of 2021 in energies has been one of recovery. Since the first wave of covid, the markets have been able to shrug off the new developing variants and climb over 50% from last year. Lockdowns and restrictions have halted momentum at various points throughout the year, but consistently declining petroleum inventories acted to pressure energies higher. Expect omicron and OPEC+ to headline the start of 2022.
Crude
- Crude is headed for it’s biggest annual advance since 2009 set to finish around 56% higher to end the year.
- The backwardated spread between Dec 22 – Dec 23 for WTI and Brent is set to end the year 50% higher than the start of the year.
- WTI’s put skew fell to 7.8ppt on Thursday, least bearish since Nov. 24th.
- WTI’s 2nd-month implied volatility declined to 35.4%, lowest since Nov 24th.
- $75 in Feb WTI will act as psychological support while $78.65 which was the intraday high on Nov. 26 will act as resistance to start the new year.
- The number of supertankers headed for the U.S. rose to the highest in more than 19 months at 32.
- 104 supertankers are bound for China in the coming three months, down two from last week and following the report regarding China cutting crude import quotas.
- China’s December Manufacturing PMMI came in at 50.3, above estimates for a 50.1 reading. Non-Manufacturing PMI was 52.7, under 53.1 expected.
- OPEC+ is set to meet Tuesday January 4th at which time they are expected to rubber stamp a 400,000 bpd production increase in February.
- As of 10:21 am CST: Brent crude oil down $0.71 to $78.82, US dollar index down 0.248 to 95.720 while the nearby e-mini S&P 500 futures contract is down 8.25 points to 4764.00.
Diesel
- Mexico’s jet fuel consumption reached 82,000 bpd in November, more than double compared to a year ago.
- U.S. Jet fuel demand remains at 88% compared to levels seen two years ago.
Gasoline
- Feb RBOB is down ~2 cents on the day to $2.269 but continues to trade above the 50, 100, and 200 day moving averages.
Propane
- Cold weather across the U.S. this weekend may continue to support prices.
Natural Gas
- European gas prices have fell more than 20% yesterday amid warmer weather and as 11 LNG cargoes are expected to arrive in NW Europe by January 10.
- Unseasonably warm weather and imported supply showing up has fueled the recent decline.
Total Petroleum Inventories in the US, including the SPR, has been on the decline since mid-2020 and are at the lowest level since 2014, a trend which looks to continue into 2022.
