Find out the Factors that are Driving our Traders Today - 12/19/18

Energies are higher led by ULSD, which saw a draw in the API stats last night while gasoline and crude oil built. Crude was expected to draw. Bargain hunting has been cited for the uptick in prices today.

API                    Forecast             Actual

Crude Oil             -2.5/-3.1            + 3.5

Gasoline              +1.0/+2.6          +1.8

Distillate              +0.4 /-0.9           -3.4

Runs                    +0.3%                  n/av

Cushing                 n/av                 +1.1

The U.S. Federal Reserve is expected to raise interest rates today by 25 basis pts at its monthly meeting . (WSJ)

The news wires lay some of the blame for the sharp sell off in energies yesterday to the equity markets' weakness-besides the higher output from Russia & the US, higher Saudi Oct. export figures and the return of the Buzzard field in the UK.

Platt's reports that cash gasoil differentials to the Platt's paper market assessment have fallen to their lowest value this year; due to excess supply and weak demand. The arb to Europe closed as that region is well supplied and freight rates have risen. Europe is set to get supplies from the US Gulf Coast in December. Asia's gasoil market is seen remaining weak as Chinese refiners are set to send supply. These refiners received additional export quotas in Oct & Nov.

Yesterday Reuters wrote the following : Investor confidence is deteriorating, with more fund managers expecting global growth to weaken over the next 12 months, the worst outlook in a decade, Bank of America Merrill Lynch’s December investor survey showed.

Today is the last trading day for WTI January futures.

Technically the energies remain soft as they remain near the multi month lows seen yesterday momentum is negative, but on the bright side they failed to make fresh lows overnight and they have mean reversion set ups. Feb WTI has support at yesterday's 4611 low, resistance lies at 4782-84 then 4932, The lower bollinger lies at 4790.

Jan RB futures have support at 1.3389, the lower bollinger lies at 1.3620 area, resistance is above that at 13748-53.

Jan ULSD support is seen at 17455, the bollinger lies at 17765-70, resistance comes in at 17900.

NG is down 21 cts in the spot contract in what is being called thinner holiday trading;  weather forecasts are not seen as the cause of the selloff we hear, next day cash prices are a bit weaker than yesterday, seems to us that futures are giving up some of the premium they held versus cash. Futures are now about even to cash; after carrying a 4-10 ct premium the past few sessions.

Platt's reported yesterday that NG demand will be averaging between 88.9 and 89.3 bcf the next 2 weeks after averaging 94.1 bcf in December, the last 6 days are said to have averaged 86.55 bcf.

Technically we see NG futures in a current range of 3.50-3.90, seeing the pattern of the last few sessions. DC chart based momentum is trying to turn positive from oversold condition. Spot futures have support at 3576-3581 then the low of 2 days ago of 3516, with resistance seen at 3735-3742 then 3850 which are both below the overnight high of 3.893.

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