Outlook: After a firm move higher yesterday, the energy complex has started to tip overbought, stalling out the upward momentum. Given the lack of bearish elements in the market over the last week, it’s unlikely we’ll see a trend change due to the technical indications. The macroeconomics have been the key bearish driver for months but have gone quiet lately. Monthly readings continue to show contraction in the US economy at what appears to be a comfortable pace. If the Fed is seeing adequate results from higher interest rates, a more dovish path forward may be in the cards. While the market has likely priced in a 25 basis point hike for tomorrow, Powell's speech should give us a better indication of their thoughts for the future. In the meantime, there remains upside risk with refinery outages both planned and unplanned further tightening the fundamentals. The API will report its survey this afternoon and the EIA will its report tomorrow morning at 9:30 CT.
Crude
- Russian oil exports from western ports fell to a 7-week low last week, falling by 625,000 bpd. Nationwide exports fell by 311,000 bpd to 2.73 mbpd.
- India’s crude imports fell by 1.3% in June to 19.2 million tons, which is the lowest level in 7 months, according to their oil ministry data.
- The continuous WTI contract closed above its 200-day moving average yesterday, which can be viewed as a bullish indicator.
- Crude in floating storage fell by 2.2% last week to 106.95mb.
- Reuters estimates crude stocks fell by 2.4 million barrels last week.
- The API will report its inventory survey at 3:30 CT.
- As of 7:27 am CST: Brent crude oil up $0.05 to $82.79, US dollar index up $0.071 to 101.417 while the nearby e-mini S&P 500 futures contract is up 2.25 to 4586.00.
Diesel
- Reuters estimates diesel stocks rose by 500,000 barrels last week.
- The continuous daily diesel contract tipped overbought on the 14-day RSI yesterday.
Gasoline
- Reuters estimates gasoline stocks fell by 1.6 million barrels last week.
- Exxon’s Baton Rouge refinery may need to keep its gasoline-making fluid catalytic crackers down for 3-4 weeks due to unplanned repairs.
- The continuous daily RBOB contract closed above its upper Bollinger Band yesterday, which can be an overbought indicator.
- The contract also ventured into overbought territory on the 14-day RSI.
Propane
- Conway is trading at .6400 while Belvieu is trading at .6650.
- Conway is trading at 34% of crude.
- The US is exporting 62% of production as of 7/14/23.
Natural Gas
- Overnight weather runs were unchanged for the two-week forecast.
- Yesterday, US natural gas demand increased to 101.3 Bcf/d.
Continuous Daily RBOB: The prompt gasoline contract has tipped overbought on multiple metrics after a hot start to the week. A close above its upper Bollinger Band and an RSI value of 70 are both indications that the commodity may be overbought. This may slow momentum today but does not necessarily indicate a trend change.
