Market Update 11-4-2022

Overview

Energies?are?higher?with?several?items?supporting?the?up?move.

Rumors of China re-opening fueled a sharp rally in Chinese equities. China is working on a plan to end a system that banned individual flights for bringing in passengers infected with the COVID-19 virus, Bloomberg News reported on Friday, citing people familiar with the matter. This comes even as on Friday, China reported its highest daily count of new local COVID-19 cases in six months.

The?dollar?has?retreated,?boosting?energy?prices.

Distillate/diesel prices have been especially supported the past 24 hours with 2 news items underscoring supply concerns. A proposed strike action at BP's 400 MBPD Rotterdam refinery is seen possibly delaying the restart of diesel units. (Quantum) Yesterday a fire broke out at Valero's Corpus Christi refinery. The fire was in a portion of the refinery that refines heavy sour crude oil and produces diesel and performs hydrotreating for distillates. (WTVBAM.com)

Quantum cites Russian supply worries for part of the price gains today. Russia has pledged to not deal with countries operating within the price cap, which could dramatically reduce Russian supplies.

Tensions rose further in the Korean Peninsula. After N.Korea launched many missiles 2 days ago, today South Korea scrambled dozens of fighter jets on Friday, after detecting over 180 North Korean military planes flying near the countries' shared border. (Today)

Today's Non Farm Payroll data showed 261,000 jobs were added in October. The estimates were for an addition of 195,000-200,00 jobs.

Technicals

Crude oil has positive momentum and has risen to its best value in over 3 weeks, but has bumped up against the upper bollinger band on the DC chart. That value lies toward 91.65. Chart based resistance lies above at 92.65-73. Above that resistance lies at the recent high at 93.64. Support comes in at 89.72-89.76 via the 60 minute December chart. Below that support lies at 87.91-88.00, which was tested with an overnght low of 87.82.

RB is again attacking the upper bollinger band on the December daily chart. That value lies at about 2.7685. DC based chart resistance lies at 2.8360-2.8400. Support comes in at 2.7053-65.

December ULSD sees support at 3.8600-3.8625, then at 3.800-3.8034. Resistance comes in at 3.9843-3.9851.

WTI spot futures see support at 89.72-89.76, then at 87.91-88.00. The low today was 87.82. Resistance is seen at 92.65-92.73, then at the recent high at 93.64.

Brent futures are bumping against the upper bollinger on the DC chart. That value lies at about 98.25. Resistance is seen at 98.75, then at 100.45-46. Support is seen at 96.53-63.

Natural?Gas

NG has rallied back over $6 today as WSJ comments that "bullish investors are betting on a colder-than-normal winter that will boost demand and could also help curb record-high production rates that have already begun to trend slightly lower in the past few days."?Weather models have turned cooler again overnight, helping boost prices. (NGI)

NG prices dipped Thursday on the back of a bigger than expected storage build. Storage rose by 107 BCF, bringing total storage to 3.501 TCF. This is still 101 BCF below year ago level and -135 BCF below the 5 year average.?NatGasWeather suggests that the 5 year deficit will be erased with the next 2 weeks' data. Early estimates in a Reuters survey point to next week's data showing a build of 81 BCF. This is well above the 5 year average of +20 BCF for next week's data.?(NGI)

Technically NG has positive momentum, but this week's activity has a sideways pattern. Resistance is seen at the gap at 6.400-6.409. Support lies at the overnight low at 5.890-5.893.

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