Market Update 12/22/20

Overview

Oil prices have slid back again today as virus fears dominate. World equities retreated as well. (Reuters)

The down move comes despite news that France and the U.K. are working to reopen one of Europe’s most important trade routes. (Reuters)

Monday, the Russian Energy Minister said that the rise in output expected from OPEC+ will not lead to a glut in the oil market. (Reuters)

Apple Mobility said Monday that U.S. driving activity was at a 4-week high during the week ended December 18th. It was the second straight increase. It is typical for driving activity to rise during the first half of December, but to fall during the second half of the month. (Platts)

API and DOE data for petroleum stocks will be released at their normal times. Crude supplies are seen falling by 3.3/4.7 MMBBL.

The Baker Hughes rig data will be released Wednesday rather than Friday.

Holiday trading hours on CME and ICE show that they will be closing early on Thursday and be closed the rest of the week. CME & ICE will base their settlement prices off of the 2 minute period from 1:28-1:30 PM ET. CME will close the Globex platform at 1:45 PM ET; ICE is closing their contracts at 2 PM ET. The CME & ICE will reopen Sunday evening and have regular hours on Monday December 28th.

Technicals

Energies are soft with negative momentum. 

February WTI sees resistance at 4794-96. The high is 4796. Above this, we see resistance at 4859-61. Support below comes in at 4654. The low is 4660. Below this, support lies at 4618-24.

Brent for February sees support at 4913-20 and resistance at 5106-08.

February RB support lies at 1.3054. Resistance comes in at 1.3574.

ULSD for February has its support at 1.4295-1.4308. Resistance is seen at 1.4840. 

Natural Gas

NG is higher as winter is here and the market is showing some strength looking at the forward curve. Since settling at 1 tick favor February last Thursday, the front spread has widened today to favor the January by 2 cents. The spread has positive momentum with resistance seen at about 2.8 cents. Support for January likely lies at flat. 

Platts is reporting that 5 cargoes of LNG exports have been cancelled for February loading. This comes as none have been cancelled for this month and only 2 for January were heard cancelled. Higher freight rates were cited for the cancellations. 

Feedgas volume for LNG in the U.S. was heard to be 10.54 BCF Monday. This is down from the record high of 11.58 BCF seen December 13th. The Platts JKM February pricing was seen at $11.40 Monday. Spot JKM prices last week were seen over $12. 

The NG EIA data is due to be released Wednesday December 23rd at 12:00 PM ET. 

Flat price spot futures see their resistance at 2.823-2.833. Support below is likely at the recent highs at 2.720-2.730, then at 2.648-2.649. Momentum and price action are positive as the contract has risen over the resistance trendline cited the past 2 days. 

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