Find out the Factors that are Driving our Traders Today - 05/30/19

The energies are down except WTI, which is up some, reflecting the API data. Crude oil stockpiles drew more than anticipated, while Gasoline stocks rose, contrary to estimates for a draw.

API             Forecast         Actual

Crude oil      -1.0/-1.4         -5.3

Gasoline       -0.8/-1.0         +2.7

Distillate       -0.225/+0.4    -2.1

Cushing         n/av              -0.2

Runs             +1.0%           n/av

Iran's May crude oil exports are said to have been 400,000 bpd, 1/2 of April's amount. (Reuters) Platt's reports that that the gasoline crack in Singapore fell below 1 dlr to 63 cts, the lowest in 4 mths due to higher supply out of China.

WTI rebounded yesterday as a pipeline out of Cushing to Illinois was set to reopen today after flooding shut it. The front mth spreads in WTI rallied on the news. July Aug WTI futures spread rallied from -40 cts to -5 cts quickly midday Wed, then settled into a range near -10/-12 cts. The front month Brent spread remains near $1.50 as issues still remain surrounding Russian crude along the recently contaminated pipeline. Resumption of flow to the Northern section of the line to Poland is seen returning by June 9 or 10. (Platts)

A Reuters analyst sees the global slowdown hitting diesel demand. He describes a slowdown in container shipments, air cargo and rail freight shipments and shipping lines cancelling voyages due to lack of demand. As of mid-May, US distillate stocks were up 11% vs year ago due to slower demand & rising production, so the analyst says. Rising prices are also said to be hurting.

Technically the energies are showing us some supportive signs, despite the weak tone of recent days. Most notable to us is the high volume that traded yesterday in WTI futures on the CME, totaling just over 2 mln contracts. Tops and bottoms are signaled often by high volume. Brent August futures are trying to turn to positive momentum. For today WTi futures have support at 5813-17 and resistance at 5957-66 (tested with a high of 5970), above this resistance lies at 6004-13.

Brent August futures have support at 6660-67 and resistance at 6858-61. July ULSD tested resistance at 19778-85 with a high of 19809, above this we see resistance at 19853-56. Support lies at 19480-19500, then at the recent low of 19438. July RB futures see resistance at 19270-81 (the former is the overnight high) support lies at 18855-62.

NG spot futures (now the July contract) are down 4 cts as the EIA storage data today is expected to show a build of 99 bcf, comparing to last year's +95 bcf and the 5 yr avge build of 97 bcf. The June contract yesterday expired with a strong tone, as June rallied over July in the final 1/2 hour and settled at 9 ticks June over July.

WSJ - in its NG roundup quoted a source stating that NG volatility has been low, despite what we have seen in the energies. One of our colleagues reiterated his view of a range bound market, stuck between 2.50 and 2.80.

Technically, the range bound view is underscored by the neutral momentum indicator on the DC chart.

Support for today is seen at 2572-2574 then at 2538-2542, with resistance at 2624-2626 having been tested with the overnight high of 2628.