Outlook: The energy market is off to a slow start this week with a lack of fresh drivers developing over the weekend. The US hit Russia with another round of sanctions but energies were left out. Evidence of success from the current price cap has been observed recently with India cutting back on Russian oil purchases. Peace talks if Paris allegedly progresses over the weekend and will be a story to monitor this week. The Iranian-backed Houthi rebels have said they are prepared to cause havoc in the Red Sea long term and US retaliation has yet to prove effective. Macroeconomic reports are light for the first half of the week but overall sentiment is that rate cuts will be delayed further back than originally expected.
Crude
- The package of US sanctions on Russia announced on Friday did not include energy.
- Truce talks with Israel in Paris are ongoing but have not resulted in a ceasefire thus far.
- Goldman Sachs forecasts oil prices to peak at $87 this summer.
- Goldman Sachs expects oil demand to grow by 1.5 mbpd this year.
- Global crude in floating storage fell by 7.5% last week to its lowest since October. (BBG)
- The continuous WTI contract closed below its 100 & 200 day moving averages on Friday.
- Baker Hughes reported US oil rigs rose by 6 last week.
- As of 8:00 am CST: Brent crude oil down $0.22 to $81.40, US dollar index down $0.198 to 103.738 while the nearby e-mini S&P 500 futures contract is up 3.25 to 5105.00.
Diesel
- HO managed money traders are net long 22,371 contracts after decreasing net length by 4,218 contracts last week. (COT)
- The continuous diesel contract closed below its 50-day moving average on Friday.
- Thursday is LTD for April HO, please have positions offset or rolled by EOD Wednesday.
Gasoline
- RBOB managed money traders are net long 61,425 contracts after selling 715 contracts last week. (COT)
- Thursday is LTD for April RBOB, please have positions offset or rolled by EOD Wednesday
Propane
- Conway is trading at .8025 while Belvieu is trading at .8625.
- Conway Swap Oct24-Mar25 strip trading ~.7900.
Natural Gas
- Overnight weather runs removed 3 HDDs in the two week forecast.
- Baker Hughes reported nat gas rigs fell by 1 to 120 last week.
- QatarEnergy said on Sunday it will develop a 16 million-ton-a-year LNG export project by the end of the decade.
Continuous Daily WTI: Look for the 50-day moving average to provide support if the downside trend continues this week.
