Outlook: Energies are mostly lower following yesterday’s big selloff. The market is seeing some continuation from yesterday as fears of a recession grip the market and funds exit the marketplace and move assets to safer and even markets. The oil market could be looking to test the 200-day moving average which is currently sitting at $92.60 nearby.
Crude
- EU labels nuclear energy as a green source of energy.
- Secretary-General of OPEC+ Mohammed Barkindo passed away at the age of 63. He was in his final weeks serving as the top diplomat for the oil alliance.
- The US accused Iran of backtracking its negotiations to try and revive the 2015 Nuclear Deal.
- Russia is threatening to shut down the Caspian Pipeline which supplies a large amount of oil to Europe daily.
- Shanghai is doing mass testing after new cases of covid over the weekend.
- Russian discounts on oil have forced Saudi Arabia to discount some of its own oil sold in Asia.
- The API will release its inventory estimates today at 3:30 PM CT
- The EIA report will come out tomorrow morning due to the 4th of July holiday.
- As of 9:28 am CST: Brent crude oil down $2.86 to $99.86, US dollar index up $0.713 to 107.243 while the nearby e-mini S&P 500 futures contract is up 2 to 3836.00.
Diesel
- Inventories continue to see gains as refiners run more diesel-focused blends.
- Russian exports of diesel are expected to remain steady at current levels for July. June saw 1.13 million tons and July is expected to be at 1.15 million tons.
Gasoline
- Chinese demand has returned to near pre-virus levels.
- The gasoline demand for the US is likely to show some strength as people traveled for the extended holiday weekend.
- Reduced prices at the pump also play into the possible demand recovery.
Propane
- 1.1500 Conway and Belvieu at 1.1725
- Propane moved lower yesterday but not to the degree that the rest of the energy complex did.
Natural Gas
- Norway resolved a strike from natural gas workers, this halted a 28% increase over the previous 5 trading sessions.
- Indicators are expecting a higher than average build in the inventories from the EIA this week.
Crude Open Interest: Brent and WTI open interest has fallen to its lowest levels since 2015. Extreme volatility and a seller’s market have resulted in many traders sitting on the sidelines.
