Find out the Factors that are Driving our Traders Today - 05/17/19
Energies are higher as tensions mounted in the Mideast yesterday when Saudi led coalition warplanes struck at Houthi rebels in Yemen. (WSJ)
Added to this is some maintenance in the N Sea that has caused a drop in output there. The U.K Flotta field was shut due to a problem with a pipeline valve. Output last year totaled around 59,000 b/d, although volumes have been in gradual decline. (Platt's) This is in addition to some issues in supplies from the Ekofisk/Oseberg crude grades out of Norway.
Russian first half May crude production is seen at 11.156 mln bpd, below the 11.18 level set in the production accord with OPEC. The drop in output is a result of the issue recently with contaminated oil flowing thru a pipe out of Russia. (Reuters)
This weekend members of OPEC/Non OPEC are set to get together for a joint ministerial monitoring committee meeting, which may give clues to OPEC policy at the June meeting regarding production intentions.
Reuters points out that gasoline inventories on the East and West coast of the US are at their lowest levels since 2014 for this time of year; right before the summer driving season.
Technically, the energies have a positive firm tone with the only negative being the mean reversion set up in ULSD as it settled yesterday over the upper bollinger on the DC chart; that band today intersects at about 21275-80. ULSD resistance for June futures lies at 21240-60 (tested with a high of 21338) then 21375-21400 with support seen at 21055-75 then 20957-77.
RB June futures support is seen at 20520-25 then 20400-15 with resistance at 20820-25 (tested with a high of 20854) then at 21005-15.
Brent futures in July have support at 7222-27 and resistance at 7336 then 7399-7402.
June WTI sees support at 6249-52 and resistance at 6393-6400.
NG spot futures are down 1 ct from yesterday's close, having been in a range over the past week between 2586 and 2670. Momentum points lower. For today, we see support at 2614-2615 (the low is 2616) then at 2595-2598. Resistance lies at the recent dbl top at 2669-2670.
Yesterday's EIA data was neutral as storage rose by 106 bcf, in line with WSJ survey estimate of +107 and the ICE market of +104/+107. Storage is now +130bcf/+8.5% vs last year but remains -286bcf/-14.75% vs the 5 yr avge.
One colleague believes that spot futures will rise next week in to the 2.70's as the heat kicks in in the South raising the A/C demand.
Against this is the back drop of increased tariffs on US LNG imports into China; which could impact export volumes out of the Gulf. Although in recent months Chinese imports of LNG have slowed due to these tariff concerns. (WSJ/Reuters)
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.