Market Update 11/25/2020

Overview

Energies have risen to new highs for this rally as vaccine hopes dominate. The rally comes even as API data seen last night disappointed for Crude Oil and Gasoline.

World equities were strong as well today. The MSCI index hit a record today on the back of the strength in the Dow Jones Index seen yesterday. The Dow broke over 30,000. (Reuters)

Helping the positive tone is exclusive news reported by Reuters that the White House is to propose lifting the ban on entry into the U.S. of non-U.S. citizens from Brazil and much of Europe.

The Brent Dubai EFS rose to a 4 month high in Asian trading as Brent has rallied on the vaccine hopes, while the Dubai physical crude is being held back by a lag in current buying interest for the end of cycle trading for January loadings. Platts reports that January Mideast crude supply is ample, but sellers are holding back in the hope of late cycle demand appearing.

Iraq is said to be offering their Basrah crude under a long term deal, but the proposal calls for the upfront payment for a year's worth of oil supply. This is the first time that federal Iraq has proposed such a deal, but the semi-autonomous Kurdistan Regional Government in the north of the country already has similar contracts, where buyers essentially lend cash to the region. (Platts)

ENI has declared force majeure on Nigerian Brass River crude due to a pipeline explosion. Production of 30 MBPD is affected. Exports are expected to be dleayed a week. (Reuters)

API                Forecast                Actual

Crude Oil         Unch/-0.3            +3.8

Gasoline          +0.2/+0.8             +1.3

Distillate         -0.8/-1.5               -1.8

Cushing            n/av                    -1.4

Runs               +0.8%                   n/av

Technicals

The ULSD contract has 3 technical indicators that raise a flag cautioning against getting overly bullish here. The Weekly Continuation chart's upper bollinger band lies at about 1.335. The spot futures are trading well above that. A gap to 1.3787 on the Weekly chart was filled today with the December high of 1.3787. The January futures contract has a Relative Strength Index (RSI) reading of 73. An RSI over 70 signals an overbought condition.

ULSD resistance for January over today's high of 1.3856 lies at 1.3963 then at 1.4190. Support comes in at 13420-27 , then at 13196-13202.

The Crude Oils are also bumping up against their weekly chart upper bollinger bands. In WTI that band lies at about 4438. In Brent that band lies at about 4734.

In January Brent we see resistance at today's high of 4875 ,then at 5005. Support lies at 4770-72, then at 4653.

WTI spot futures support is seen at 4378. Resistance lies at 4565-72. The latter is today's high. Above this we see resistance at 4638-47.

January RB support is seen at 12270-72. Resistance is seen at 12759, then at 12908-29. There is a gap on the daily Jan chart to that 12929 price.

Natural Gas

NG is down 2 cents in the expiring December futures contract , as the EIA number due out today is seen with a draw smaller than last year's and smaller than the 5 year average.

WSJ survey is callling for a draw of 8 BCF. The range of estimates was wide. They ran from -47 bcf to +36 bcf. Platts survey is looking for a draw of 25 BCF. Last year, the draw was 47 BCF. The 5 year average draw is 37 BCF.

The softer pricing seen today comes despite a cooler forecast. The latest forecast from Bespoke Weather Services early Wednesday extended colder trends from earlier in the week, maintaining a shift toward comparatively chillier temperatures well into the month of December. This could result in the first third of December coming in near or slightly colder than norms over the past five to 10 years, according to the firm. ( N G I )

NG futures in January have support at 2829-2835,then at 2797-2800. Resistance lies at the highs of the past 2 days at 2908-2917, then at 2949-2953. Momentum remains positive.

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