Learn the Factors that are Driving out Traders Today- 06/28/18

Energies are mixed with WTI, RB & ULSD down a bit, but Brent up slightly Analysts we read are still talking of overall tightness in the oil sector Wednesday's news on a few fronts reinforced the overall positive tone for oil.

Iranian Pres. Rouhani said Iran would not buckle under US pressure (WSJ), yet Bloomberg reports that several Asian based entities are stopping Iranian oil purchases and or mulling a halt even a UAE oil company is trying other alternatives to Iranian oil.

U.S. Secretary of State Pompeo in a Senate appearance on Wednesday warned that sanctions may be imposed against the Venezuelan oil sector; despite the negative impact it might have on US Gulf Coast refiners (Platt's).

The US/France/Italy and Britain are "deeply concerned" over the announcement by the Libyan Commander Haftar of Libyan oil control being transferred to an Eastern based National Oil Corp. (Reuters)

The DOE figures yesterday were bullish -- especially for Crude oil. Crude exports rose to a new record of 3.0 mln bpd (although here the belief is that the narrowing of the WTI/Brent arb seen this past week will slow exports down although there may be a distinct time lag for that to filter thru to the stats) Crude supplies fell by 9,891 mln bbls the most since Sept. 2016.  Cushing stockpiles fell by 2,713 , with the belief being that Cushing will see further declines in the coming week(s) due to the Syncrude outage in Canada.

The crude draw was helped by the 115,000 bpd rise in refinery runs --which set a record at 17,816 mln bpd The 97,5 % capacity usage is the highest level since 2001 (Reuters) Also supportive was the fact that the products did not build as much as was forecast .

The EIA - on its website -said that they see gasoline prices at the pump in the US having peaked on May 28 at $2.96/gallon. June's average was $2.89 . They see the price falling to $2.84 by September. Since 2000, prices have peaked before or during June on 10 occasions --with some peaking later due to outages from storm related incidents.

Technically the energies remain firm in price performance with WTI yesterday having traded and settled at a fresh 3 1/2 yr high; although in the case of WTI , we are a bit cautious as momentum is getting near overbought, and yesterday's settlement over the upper DC bollinger band has created a mean reversion set up.

There are double tops in some of the energy contracts from yesterday/today.

WTI has its double top at 72.97-73.06 -with next resistance above that seen at 73.58-60 - where the upper DC bollinger lies today, support below is seen at 71.89-92 then 71.19-26 a close below 7160 would not be supportive.

August RB has its dbl top at 2.1180-91 with resistance above that seen at 2.1341-51 support below comes in at 2.0854-71 then 2.0737-38.

August ULSD futures have resistance at 2.1890-2.1913 (tested with an overnight high of 2.1944) -above this we see resistance at 2.1991-2.2000 support below lies at 2.1646-62 ( the overnight low is 2.1664) then support comes in at 2.1475-97.

Brent futures for September have a dbl top from yesterday/today at 77.97-78.00 resistance above that lies at 78.61-72 --with support below seen at 77.07-12 (the former is the overnight low) -then at 76.55-60.

NG for August is testing 3.00 as very hot weather is set to invade the Northern 1/2 of the US over this coming weekend into the 4th of July holiday, yesterday PJM issued a hot weather alert as temps are seen tracking as much as 15 degrees above normal (Platt's).

Momentum is trying to turn positive on the DC chart basis. Price performance is supportive - with resistance overhead seen at 3.012-14 (where the upper DC bollinger lies) then at the highs seen 10 days ago at 3.034 and 3.053.

Support for spot futures comes in at 2.966-69 ( the former is the overnight low ), then at 2.941-45.

The EIA storage data due out today is expected to show a build of 71 bcf, which compares to last year's +61 bcf and +83 bcf on 5 yr average basis. (If we are reading the EIA website data properly).