Energy Market Update 4-28-2023

Crude is up 42 cents?????June RB is up 3.0 cents????June ULSD is unchanged

Overview

Crude?and?RB?are?higher?as?a?few?items?we?have?seen?look?supportive.

The EU Commission today said that they see Europe avoiding a recession this year. First quarter Euro Zone GDP was?up 0.1%, just missing the forecast of +0.2%. They see growth this year of 0.9% and in 2024 of 1.5%, although they warn that challenges remain such as inflation and monetary tightening. (Reuters)

Sinopec says they see oil product demand growth in China this year of more than 10%. (Bloomberg)

Chevron and Exxon Mobil announced first quarter results today and both beat expectations. Exxon profited from increased oil production, while Chevron's earnings were boosted by improved refining margins. (BusinessWire/StamfordAdvocate)

Iraq has signaled in the past few days an interest to resume exports of their halted crude oil through Turkey. Iraq says that it is working to restore the exports "as soon as possible" and that the delay is due only to "technical procedures". (Bloomberg) Crude prices had rallied several weeks ago when the flow was halted, thus the question is whether a possible restart of the flow has weighed on prices this week. The flow was said to be between 450 MBPD when it was stopped on March 25. (Reuters)

On Thursday, Russian Deputy Prime Minister Novak said that OPEC+ sees no need for further output cuts, despite lower than expected Chinese demand. (Reuters)

Saudi Arabia may cut the price for its medium crude to Asia in June despite an extra output cut from OPEC+, as refiners are being hit by sliding fuel prices and are thus considering reducing output, and China and India snap up cheap Russian crude. The Saudis are seen cutting their Medium crude price to Asia by 40 cents. (Reuters)

Today is the last trading day for the May RB & ULSD contracts as well as the June Brent futures.

Technicals

Crude oil spot futures are set to close lower for the 6th straight month. This is the longest such streak in 8 years as per Bloomberg reporting. Yet, the DC chart seems to be trying to form a base with the past 3 sessions' lows in the 73.93-74.05 area. June RB and spot WTI futures are showing the possibility of key upside reversal setups, having made fresh lows today for the recent down move. Momentums seem poised to turn higher from near oversold condition.

WTI spot futures have resistance at?76.74-76.82 and then at 77.83-93. Support lies at the aforementioned lows seen the past 3 days at 73.93-74.05. A close over 75.28 would confirm the reversal.

June RB sees support at the overnight low at 2.4732-2.4772. Resistance lies at 2.5635-2.5664. A close over 2.5260 would confirm the reversal.

June ULSD has support at 2.3134 from a weekly low from January 2022. Resistance is seen at 2.3945-2.3983.

Natural?Gas-?NG?is?up?14.5?cents.

NG rallied today as a lightning strike impacted the Columbia Gulf pipe system in Mississippi.

The EIA storage data seen Thursday showed a build of 79 BCF, more than was forecast by 2-7 BCF. Total storage is up to 2.009 TCF. This puts the surplus to last year at 525 BCF (+35.4%) and to +365 BCF (+22.2%) versus the 5 year average. The next 4 weeks are seen adding a bit more to the storage surplus. Yet, some cite a tightening storage surplus in the EIA data for the key South Central region as being supportive. While the surplus there is now +32% over the 5 year average, this is down from a +38% figure seen end of March. This is likely due to the increased feedgas demand seen the past few weeks, plus some odd hiccups in NG production. The South Central region comprises Alabama, Arkansas, Kansas, Louisiana, Mississippi, Oklahoma, and Texas.

Yesterday's rally was attributed to short covering on a cooler forecast offered then.

Rystad Energy says that Russian LNG flows to Europe have remained ample. Russia is Europe's third largest supplier. February saw Europe import a record amount of Russian LNG. The volume was 17% of Europe's total LNG imports. Europe used to get a heavy amount of supplies by pipeline. Flow thru the Nord Stream 1 pipeline ceased last August, which prompted a price spike in TTF values to 339 Euros/MWH at the time. Prices have since retreated to 21 month lows near 38.5 Euros/Mwh.

TTF prices show a double bottom from Wednesday/Thursday at 38.005/38.000, with prices today having climbed back over 40 Euros/Mwh. Will this support NG?

Baker Hughes' CEO offered an upbeat assessment of the NG industry. While the spot price of natural gas has dropped by about 70% over the past year, natural gas producers and service firms have been telling investors in recent days that they see decades of growth for the natural gas industry as their product gains wider acceptance around the world — not just as a transition fuel but as a “destination fuel,”. (Pittsburgh Post Gazette)

Technically, NG is breaking out of the recent range seen as resistance at 2.385 and 2.42 have been pierced in what is likely a continuation of some short covering. Most had thought prior, including ourselves, that NG was range bound. Resistance at 2.529-2.534 was touched on the high a short while ago. Above that resistance basis the DC chart is seen at 2.595-2.597. The upper bollinger on the DC chart lies at 2.485. Support is likely below at 2.312-2.314, which is just below the 50 day moving average of 2.327.

Disclaimer

This e-mail, its contents, and any attachments are intended solely for the addressee(s) shown above, The e-mail and its contents are provided to you 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.

This e-mail message and any attachment to this e-mail message contain information that may be legally privileged and confidential from Liquidity Energy, LLC. If you are not the intended recipient, you must not review, transmit, convert to hard copy media, copy, use or disseminate this e-mail or any attachments to it. If you have received this e-mail in error, please immediately notify us by return e-mail or by telephone at and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Liquidity Energy LLC.

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