Market Update 4/14/2021

Overview

An improved demand forecast from the IEA, a weaker dollar, better than expected API data for crude supplies and Iran enrichening its uranium are supporting higher prices today.

"Fundamentals look decidedly stronger," the IEA said in its monthly report.(Thompson Reuters) The IEA upped their 2021 oil demand figure by 230 MBPD. The demand increase for the year is seen as +5.7 MMBPD. They cited growth in China and the U.S. They see OECD stockpiles having fallen for the 7th month in a row in February signalling a rise in demand and increased imports in the near future.Stockpiles fell by 2 MMBPD in the developed nations. They say producers may have to increase supply by 2 MMBPD come the 2nd half of the year to meet expected demand. The IEA upped its U.S. oil demand forecast for the second half of the year by around 365,000 b/d. Its Chinese oil consumption forecast for 2021 was also raised by 160,000 b/d. (Platts/Reuters/Bloomberg)

The dollar hit a 3 week low today. (Reuters)

Yesterday, Iran said that they were going to start enrichening their uranium to 60% purity. This is in gross violation of the nuclear accord. The agreement only allows for purity of 3.67%. (Platts) Additionally, on Tuesday, an Israeli-operated ship was attacked off the United Arab Emirates, opposite the Iranian coast, Israeli media said, in the latest apparent tit for tat. (BBC)

API                  Forecast             Actual

Crude Oil           -2.5/-2.9             -3.61

Gasoline              +0.3                 +5.57

Distillate            +1.1                  -3.0

Cushing             +0.138              +0.9

Technicals

ULSD is the highest in 3 weeks as the API data is supporting this commodity the most. Momentum is positive for the energies. Crude oil and RB remain in the ranges seen recently.

May WTI has support at 5993-95. Resistance lies at 6175-77.

RB is the weakest link today befitting the API data. Support for the spot futures lies at 1.9550-75. Resistance comes in at 1.9980-85.

ULSD support in May lies at 1.8125-28. Resistance is seen at 1.8650-55.

Natural Gas

Some unexpected, albeit moderate, late-season heating demand is supporting NG prices today. (WSJ) This is added to the firm LNG export level seen out of the U.S. in recent weeks.

Technically NG looks stable to firm. Resistance at 2.656-2.663 is being tested. Above this resistance comes in at 2.688-2.693. Support is seen for May futures at 2.605-2.607, then at 2.585-87.

Notable technically is the price action in the May / July spread. One week ago the spread showed a mean reversion set up. In the past 4 days it carved out a bottom just below 17 cents. Momentum and price action suggest a test of 14.7 cents, maybe even the 13.6-13.7 cent area.

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