Daily Energy Market Update 11-13-2024

Crude is?down 16 cents????? RB is unchanged????? ULSD is down 0.67 cents

Overview

Energy prices are lower now after rising slightly overnight. News wires still talk bearishly of the market due to "a gloomy demand outlook" to quote a Reuters headline. Support today likely? came due to a weaker US dollar.

Also supportive was an ANZ bank comment seen in Reuters which speaks of physical tightness in the crude market. "Buyers in the physical market have been particularly active, with any available cargoes being snapped up quickly," ANZ analysts said in a note. Technically,? the front end of the WTI curve may get help from a mean reversion set up in the spread, as it settled below the chart's lower bollinger band. Momentum to the downside for the December/January spread is waning. The spread has possible support at Tuesday's low at 9 cents and then likely at the psychological flat (zero cents) price. Resistance comes in at 25 and then 36 cents. The lower bollinger band today intersects at 12 cents.

U.S. CPI data out this morning showed October inflation ran at 0.2% and the year on year reading was +2.6%. Both readings were in line with the consensus forecasts. WTI? was unchanged in the first few minutes after the data release versus the pre-CPI reading value.

Platts details how the Trump election is not seen affecting Chinese demand. Beijing will now focus even harder on solving its domestic economic problems, Platts comments. "Analysts said the transportation fuel demand for sending Chinese goods to the US -- which could take a hit as exports slow down owing to tariffs -- is very small compared with oil consumption from the property and infrastructure construction sector." The Chinese Ministry of Finance is seen offering further fiscal stimulus in 2025 to support economic growth, while industrial sources expected more efforts to stabilize household income expectations by increasing asset prices, particularly in property and equity markets, to boost domestic consumption. Moreover, China's fast-expanding petrochemical capacity is set to boost demand for oil feedstocks, regardless of the impact of Trump’s potential tariffs on petrochemical products, analysts said. Trump targeting Iranian crude exports may affect China. Commodity Insights’ AltView estimated Trump’s targeting could lead to a reduction of between 500 MBPD and 1 MMBPD in the flow of Iranian oil to China by June 2025. That may support more U.S. crude exports to China.

The oil markets may get some clarity today from the EIA's STEO due out at midday and then the API data due post-market.

Technicals

Quantum Commodities writes:" benchmarks looked to have found a support floor after recent losses. " This is most evident when looking at the DC charts for ULSD & Gasoil. These charts show double bottoms from Monday/Tuesday. Momentum remains negative for the energies.

The spot Gasoil DC chart shows the double bottom at 655.25/655.50. Resistance comes in at 675.75-676.00.

ULSD sees the spot futures double bottom at 2.1879-2.1896. Below that support lies at 2.1700-2.1707. Resistance comes in at 2.2450-2.2475.

RB has its double bottom from the prior 2 sessions at 1.9554/1.9491. Support below that lies at the recent low at 1.9339. Resistance comes in at 1.9923-1.9934 and then at 2.0210-2.0220.

Spot WTI futures has broken the prior 2 sessions' lows at 67.75 and 67.92. Below that support comes in at 67.24-67.31. Resistance lies at 70.10-70.13.

Natural Gas--NG is down 5.6 cents

NG futures are lower as the rally of the past 2 sessions has run out of steam as storage builds will continue the next 2 weeks. Weather forecasts of the past 24 hours dialed back some of the cold. The rally seems to have been very much fueled by short covering.

The short covering in NG futures is evidenced by the large drop in the December contract's open interest of over 36,000 contracts on the CME in Tuesday's activity. That comes on the heels of the over 18,000 drop in the December contract's open interest seen from Monday's action.

The American weather model gave up some of the cool in the forecast in the past 24 hours, thus hurting NG futures prices.

Some point to this week's EIA gas storage data as weighing on prices as the data is seen raising the surplus to the 5 year average. Current estimates we have seen are calling for a build of 42 to 49 BCF. The 5 year average for the period is +29 BCF.

Technically NG spot futures still has positive momentum, though it looks as if it is cresting. Resistance lies at the prior 2 sessions' highs at 2.956 and 3.013. The high yesterday of 3.013 almost touched the most recent high of 3.019 seen in early October. Support at 2.825/2.831 was tested overnight with the low of 2.830. Support below that comes in at the top of the recently created gap. The support lies at 2.769-2.770.

Disclaimer

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