Market Update 5-26-2022

Overview

Energies are higher as they are supported by the prospect for tighter Russian oil supply and the positive DOE stats seen yesterday, especially for crude oil.

Russian supply is being dialed back through independent acts by users, even as the EU grapples with efforts to agree on sanctions. TotalEnergies is voluntarily cutting back supplies from Russia to its German refinery and is seeking to get supplies via a pipeline from Poland. Although Hungarian oppostion to a ban on Russian oil is a stumbling block, the next set of sanctions is seen including an insurance ban which will make it harder to move Russian oil. (Quantum Commodities)

The DOE stats were supportive for crude as Cushing supplies have fallen to their lowest level since March. Refinery runs increased much more than expected. They rose by 1.4%. They were due to rise by 0.7%. The East Coast and Gulf Coast are running at 97% of capacity according to the DOE.?Crude oil exports were seen at their 3rd best ever rate at 4.341 MMBPD last week.

Technicals

Momentums are positive for the energies. The WTI spot crude futures even as it looks sideways has an upward looking channel over the past month.

Spot WTI futures have resistance at 112.62-69, then at 114.04-12. Support lies at 110.49-64, just above the overnight low of 110.27. Below that support is seen at 109.15-23.

Brent spot futures have attacked the high seen 9 days ago at 115.69. Above this resistance lies at 116.80-93. Support is seen at the $113 area.

RB for July has resistance at the 3.76 area, then near 3.80. Support is seen at 3.6800.

July?ULSD?has?support?at?3.6915-50.?Resistance?lies?at?3.8130-50.

Natural?Gas

NG is up again today as June futures expire today amid a belief that storage is not filling fast enough as summer heat will arrive.

June?has?risen?to?trade?at?a?premium?to?July.

The EIA storage data due out today is seen as a build of 87-91 BCF as per news wires surveys. This compares to last year's build of 109 BCf and the 5 year average injection of 97 BCF.

Western delivery points for NG are seen strong as heat and drought conditions engulf them. Southern California spot prices were over $10 and in Western Texas, the El Paso pipeline which delivers gas to California as well as exports to Mexico was said to have traded near $9.82, gaining 57 cents on the day as per NGI reporting.

Notable to us from Wednesday's activity was the initiation of a position in August options on the CME. The $12.00 and $12.10 calls saw huge increases in open interest of 17,397 and 20,000 contracts respectively. The differential in value between the 2 seems to be 1.5-2.0 cents. This is reminiscent of the $10.00-$10.50 call spread that was done at about 2 cents several weeks ago.

Technically NG has positive momentum still. Resistance via the daily July chart comes in at yesterday's high at 9.437. The upper bollinger band on the daily July chart comes in below that though at 9.265. Support is seen at 8.942-8.947, then near 8.80.

Disclaimer

This e-mail, its contents, and any attachments are intended solely for the addressee(s) shown above, The e-mail and its contents are provided to you for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

This e-mail message and any attachment to this e-mail message contain information that may be legally privileged and confidential from Liquidity Energy, LLC. If you are not the intended recipient, you must not review, transmit, convert to hard copy media, copy, use or disseminate this e-mail or any attachments to it. If you have received this e-mail in error, please immediately notify us by return e-mail or by telephone at and delete this message. Please note that if this e-mail message contains a forwarded message or is a reply to a prior message, some or all of the contents of this message or any attachments may not have been produced by Liquidity Energy LLC.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC, and its affiliates assume no liability for the use of any information contained herein. Neither the information, nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy