Daily Energy Market Update 11-6-2024

Crude?is down $1.90??????? RB is down 5.48 cents????? ULSD is down 5.20 cents

Overview

Energies are lower as the Trump victory has driven the US dollar to its biggest one day rise since March 2020. Commodities across the board are down --with concerns about tariffs in a Trump presidency weighing. Oil prices are also being impacted negatively by more drilling expected in a Trump presidency.

Investors believe a Trump presidency will bolster the dollar as interest rates may need to remain high to combat inflation resulting from any new tariffs and polices that may further pressure China's economy, weakening demand there. The dollar reached its strongest in a year before paring the move. The 30-year U.S. Treasury bond yield climbed as much as 23 basis points to 4.67%, its biggest daily jump since 2020. The surge in Treasury yields underscores concerns that Trump’s policies will swell an already bloated budget deficit and reignite an inflation spiral that the Federal Reserve was only just finally quelling in the wake of the pandemic. (Bloomberg)

"In event of a Trump victory, he has little interest in renewables and will actively encourage U.S. oil production growth," said one analyst quoted by Reuters.

Chevron said it was halting offshore production and evacuating personnel in the Gulf of Mexico.? Norway's Equinor also said it has shut in production. (Reuters)? Shell said it has paused drilling operations and began withdrawing some staff from some facilities in preparation for the storm's potential impact. (Reuters) We have not seen any figures regarding lost crude oil or gas production out of the Gulf.

U.S. oil producers could lose between 3.1 and 4.9 MMBPD of oil, said energy analytics firm Earth Science Associates using a model that estimates volume losses to past storm intensity and track. Natural gas production losses could range between 4.56? and 6.39 BCF, according to its model. The upper end assumes structural damage that prolongs shut-ins, said Earth Science's chief operating officer. Earth Science's model calls for Rafael to have the second-largest impact of this year's storms on offshore production, behind hurricane Francine, which shut in up to 42% of oil and 52% of natural gas production. (Reuters)

Saudi Aramco has cut its Official Selling Price (OSP) for A-Light crude loading to Asia by 50 cents in December, which was largely in line with expectations. The Heavy and Medium grades prices to Asia were cut by 40 cents. Prices to the Med and NW Europe were raised by 30 cents. Prices to the U.S. were lowered by 10 to 30 cents.??

API??????????????????? Forecast????????? Actual

Crude Oil????? -0.515/+1.8?????? +3.132

Gasoline?????? - 0.27/-2.1????????? -0.928

Distillate???????? -0.9/-1.1??????????-0.852

Runs?????????????? -0.4/+0.3%???????? n/av

Cushing???????????? n/av??????????????+1.724 ?

Technicals

Momentums are positive, but the contracts have seen their stepladder up pattern of the past week broken.

WTI spot futures have a notable double top from the past 3 weeks at 72.66/72.67. Resistance lies below that at 71.23-71.31 and 71.92-71.94. Support lies at 69.23-69.32 and then at 68.65-68.69.

RB spot futures see support at 1.9618-1.9633 and then at 1.9339. Resistance lies at 2.0200-2.0225 and then at 2.0606-2.0609, which is yesterday's high.

ULSD support for December lies at 2.2254-2.2279 and then at 2.1964-2.1981. Resistance lies at the 2.2800 area via the 60 minute chart. Above that resistance lies at 2.2948-2.2961.

Natural Gas- NG is up 4.6 cents

NG prices are higher today boosted by lower production figures the past few days and the expectation for curtailed production due to the hurricane brewing in the US Gulf. Also assisting prices is the return of LNG demand as Freeport's plant came back up.

Lower-48 state dry gas production Tuesday was 98.7 BCF/d (-6.2% y/y), according to BNEF. Monday's output was seen at 100.5 as per BNEF data. (Barchart.com )

Tuesday's LNG feed gas demand was seen running at 13.6 BCF/d. This was up from Monday's volume of 12. 8 BCF, as per Bloomberg data. (Barchart.com )

Tropical Storm Rafael has become a category 1 hurricane, which is causing some production shut ins in the U.S. Gulf of Mexico. The storm looks set to hit Louisiana sometime Sunday.

The NG EIA storage data due out this week is seen as a build of 62 / 65 BCF. This compares to last year's build of 19 BCF and the 5 year average build of 32 BCF.

Technically NG spot futures have momentum that looks poised to turn negative. Support for the December contract lies at 2.632-2.635 and then at 2.562-2.563. Resistance comes in at 2.724-2.727 and then at 2.795-2.799.

Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC