Outlook: The market is starting the week mixed amidst light trade in observance of the MLK Holiday. Nearby WTI pushed over $80 in the overnight trade but has since retreated back below its 50-day moving average at $79.25. With a lack of fresh headlines, the market may not find significant direction until traders return to their desks tomorrow. China did release additional covid data over the weekend as criticism mounted over inaccurate and withheld reporting. Despite elevated case counts, demand has continued to show signs of recovery. It’s likely we will see exports decline as their domestic demand swallows up more product moving forward. The thin trade today can leave the market vulnerable to volatility if any market drivers develop intraday.
- Exxon Beaumont is expected to have their new 250,000 bpd crude processing unit by the end of the month.
- China said on Saturday nearly 60,000 people with Covid had died in the hospital since the easing of policies last month.
- China’s crude imports rose 4% y/y in December.
- China’s Panjin Haoye Chemical Co refinery was shut down on Sunday following a deadly explosion that killed 5. The plant processed 110,000 bpd of crude in December, and the outage is expected to last months.
- WTI has rose for 7 consecutive sessions through Friday’s close.
- Prompt WTI closed above its 50-day moving average on Friday.
- As of 8.32 am CST: Brent crude oil down $0.91 to $84.37, US dollar index up $0.139 to 102.343 while the nearby e-mini S&P 500 futures contract is down 1.25 to 4017.00.
- Diesel has traded higher for 7 consecutive sessions while adding over 25 cents last week.
- Prompt diesel is testing its 50-day moving average today at $3.2833
- Gas has traded higher for 5 consecutive sessions while also adding over 25 cents last week.
- The prompt RBOB contract closed above its 100-day moving average on Friday.
- Conway is trading at .8100 while Belvieu is trading at .8200.
- Conway is trading at 43% of crude.
- The US is exporting 69% of production as of 1/6/22.
- Natural gas is finding support from colder weather runs.
- Prompt natural gas has held below its falling 9-day moving average since 12/16.
Daily Continuous Diesel: The prompt diesel contract is testing its 50-day moving average for the second consecutive session. A close above the metric could provide further upside momentum.