Market Update 9-8-2020

Overview

Energies continue their slide with several news items underscoring weak demand. Corona virus cases in 22 of 50 US states saw an increase this past weekend and Britain and India saw increases as well. (Reuters)

Reuters quotes trading house executives as saying that crude and distillate supplies are rising and that margins are weak. One executive says that floating storage is rising again. Another executive cites the fact that last week Distillate margins hit their lowest level in years. The executive sees refiners cutting runs , especially if China starts ramping up exports of products. August saw demand stalling in Spain and Britain. . U.S distillate supplies remain 23% over the 5 yr avge for this time of year., and the summer driving season is ending amid concerns that virtual education will temper some driving demand. Platts says that teapot refiners in a key Chinese province will keep their runs steady in September from August and July levels. Runs are seen at 70-73% of capacity. August averaged 72.7%. Platts says that these refiners are seeing profitable margins and have ample crude feedstock available after their large purchases in the 2nd quarter. The margins are supported by decent domestic demand and the government's policy to prop up domestic product prices.

Monday President Trump vowed that if re-elected he would "decouple" the US economy from China. He thereatens to punish US companies that create jobs overseas. (Marketwatch)

Russia's Energy minister has stated in an inhouse magazine that it is extremely important to quickly regain market share once demand returns. Russia is considering building 2,700 unifnished wells that could be brought on stream when the OPEC deal ends in 2022. (Reuters)

The US petroleum statistics will be issued one day later than usual this week due to the Labor day holiday. API stats will be issued tomorrow and the DOE figures will be relased Thursday at 11 AM.

Technicals

Energy prices have hit fresh multi month lows today. In the case of ULSD and the crudes , they have fallen below their lower DC bollingers. RB is getting oversold. These technical indicators could provide some near term support.

Support for ULSD at the 10780-10800 area has been pireced. Next support below that lies at 1.0462-68. The lower DC bollinger intersects at about 1.1060. Resistance above is seen at 1.1151-64.

RB support at 1.1091 has been tested with a low of 1.1085. Next support below that lies at 1.0888-1.0900. Resistance above comes in at prior support level of 1.1550-57.

WTI support at 3705-08 has been tested with a low of 3696. Below this support is seen at 3638. Resistance above comes in at 3872-75, then at 3946-47. The lower DC bollinger intersects at about 3860.

Brent's lower DC bollinger lies at about 41 dlrs. Support at 4003-06 was almost tested as the low is 4010. Here as in RB the momentum is getting oversold. Resistance lies above at 4132-38.

Natural Gas

NG is holding well in the face of the sharp selloff seen in the energy complex. The continued opposing forces of LNG demand pickup and some heat out West are offset by demand fears due to the Covid and milder temperatures called for much of the country in the 10-15 day forecast.

Bespoke Weather Services sees a weekly build of 62 Bcf and 77 Bcf respectively in the next 2 EIA figures . Jumps of this size could renew worries about fall containment issues.(FX Empire) The 5 yr avges we see for these 2 upcoming reports are +60 bcf and +77 bcf.

Technically Ng has negative momentum while the past 4 sessions show a sideways pattern with resistance at 2552-57 being tested. Above this we see resistance at 2.598/2.605. Support comes in at 2493-2497 then at 2451-55 .

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 LLC.