Find out the Factors that are Driving our Traders Today - 05/03/19
ULSD & Brent are lower, RB is higher and WTI is near unchanged with overall concern being of ample supply with US output high and a belief that the Saudis will raise production to meet customer demand come June. Some Asian refiners have asked Saudi Aramco for more crude oil than their contracts currently provide for. (Platt's)
Some Southeastern Asian refiners are testing the waters buying their first WTI light crude oil cargoes, notably Vietnam and Indonesia (Platts)
Russian oil output in April fell to 11.23 mln bpd from 11.3 in March but they are still above the target of 11.18 agreed to in the OPEC+ accord. The Russian Energy minister said that their May output would be in line with the output agreement. (Reuters)
Poland, Hungary and the Czech Republic are offering their domestic refiners about 8 mln bbls from strategic reserves to offset the loss of Russian crude due to the problem with contamination on a Russian pipeline seen last week. Some refiners are said to be possibly cutting runs. Total in Germany is said to have cut runs there 30% at one of their refineries (Reuters) Belarus said yesterday that clean crude oil supplies had reached them thru the pipeline from Russia. (Reuters)
Technically, the energies continue to have negative momentum, but WTI's DC momentum seems to be waning to the downside. A close back over 6228-30 resistance would be supportive, above this we see resistance at 6275-77, support lies below at 6120-31 (tested with a low of 6130), then support lies at yesterday's 6095 low.
RB for June has support at 20046-59 and resistance at 20332-41.
ULSD in June has support at 20597-20606, then at 20480-88 with resistance at 20863-65 then 20957-77. Notable in the ULSD complex is the steep rise in the June Dec spread, which has a mean reversion set up with resistance above at the 265 area. A settlement of the Dec more than 310 pts above June would confirm the reversion.
NG is down 2 cts as support at 2561-65 has been tested with a low of 2561, below this we see support at 2535. Resistance above lies at 2611-24 (the overnight high), then at 2631-36.
Yesterday's EIA data disappointed with a storage build of 123 bcf, above the estimates of +112/118 seen from news wire surveys. Storage is now +128/+9.6 % vs last year, but remains -316 bcf/-17.8% vs the 5 yr avge. Simmons Energy analysis was quoted in the WSJ wire as stating that last week's HDD's ran 33% below the 30 yr norm.
Notable to us is the June July spread being overbought to the June basis its momentum and getting into a thicker area of congestion in the 3.0-3.3 ct area, tested today with a high of 3.0 cts.
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