Liquidity Energy Morning Update 04/11/2018
Crude oil and ULSD are higher as the undercurrent of political tension regarding Syria helped Brent reach a fresh 3+ yr high Brent prices have not been this high since the first week in December 2014 President Trump has warned that "missiles are coming" - aimed at Syria. Stock futures have retreated as a result of the concerns related to Syria (Reuters).
In separate geopolitical news - the Houthis claimed having launched a drone attack against a Aramco oil facility in Southern Saudi Arabia --at a location where a large refinery is being built (Reuters).
The Saudi Energy minister today said that his country would not let another oil supply glut happen (Reuters)--this comes after yesterday's announcement that they would keep their crude oil exports in May under 7 mln bpd --adhering to the output accord.
Yesterday the EIA revised downward their US oil output forecast for 2018 by 0,1% to 10,69 mln bpd--down from 10,7 mln bpd last mth - but they raised their 2019 production forecast by 1,5 % to 11,44 mln bpd ( +750,000 bpd). They lifted their WTI crude price forecast for 2018 and 2019 by 2%--2018 seen averaging 59.37 and 2019 58.58 dlrs--they see this quarter's WTI price averaging $60 -up from last month's estimate of $58.
API Forecast Actual
Crude oil -0,189/-0,5 +1,8
Cushing n/av +1,5
Gasoline -1,4 +2,0
Distillates -0,2 -3,8
Runs unch n/av
Technically the energies have positive momentum and look firm basis their price action but we wonder if they have the strength to take out highs in WTI and RB WTI has highs at 6655 and 6666 from earlier this year ---and Brent crude futures have risen to test its weekly upper Bollinger Support for spot WTI lies at 6508 area (the low overnight is 6515)--then support is seen at 6429-35--resistance is framed by the highs at 6655-6666 mentioned above.
ULSD has resistance at 20839-44--just above the overnight high of 20833--above this good resistance is seen at 20980-21005--support lies at 20535-60 ( tested with a low of 20531) -then at 20400-15.
RB support lies at 20209-27 ( just below the overnight low of 20235) --resistance is seen at 20460-63--there is a double top from yesterday/today at 20452-60 --with the DC upper Bollinger not far above that in the 20500-10 area.
NG is up a few ticks in the spot contract bouncing 3+ cts off the low of 2.621 seen earlier this morning--which tested support at 2.623 --below this we see support in the 2579-2586 area --with resistance on the upside at 2673-2675 then 2704-08. Momentum on the DC chart has turned negative and the spot futures are firmly in the lower Bollinger channel - and the price pattern has a drift lower look since the beginning of the month.
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