market update

WTI and RB are higher as geopolitical tension remains high and gasoline is supported by the fire at the Philadelphia refinery Friday.

Over the weekend US Secretary of State Pompeo said that "significant" sanctions would be levied on Iran in the wake of the drone attack last week. Some wonder what further actions the US could take

- but the threat has underpinned prices overnight. (Reuters)

Gasoline prices are up the most today as the fire at the Philadelphia Energy Solutions refinery in Philadelphia is seen disrupting East Coast high octane gasoline supplies. In fact the fire helped boost the gasoline crack ( from Brent) in Singapore by 30% from Friday to Monday.

The fire has destroyed an acylation unit ( 30,000 bpd size) that contributes to making higher octane gasoline. The 200,000 bpd Girard Point refinery is seen hampered and could be closed for an extended period of time. The Point Breeze section of the refinery is also closed at present. (reuters)

Today the Russian energy minister said that it is too early to say what form the 2nd half 2019 output deal should take --he suggests waiting for the outcome of the G20 meeting to see what issues will be discussed there, how the economy and the market situation will develop. (Platts)

Houthi rebels attacked an airport in the southern part of Saudi Arabia killing 1 civilian. The airport is not near any oil installations. This is the second attack on this airport in the past 2 weeks. (Fox News)

Chinese exports of gasoline and diesel fell by quite a bit in May from year ago levels. Gasoline exports were down 42.4% and diesel exports dropped by 37,8% from year ago. This despite a supposed fuel glut in the 2nd quarter in China --Reuters reports. Gasoline exports in May were down 27.35% vs April, diesel were down 52,3% from April.

Iranian crude exports in June so far are said to be 300,000 bpd ( or less as per a shipping tracker firm's data). June exports were said to be running at 300,000 bpd ( or 237,500 bpd as per the ship tracker). This is down from May's export level of 400-500,000 bpd . (Reuters)

The recent attacks near the Straits of Hormuz has Japanese firms looking at sourcing crude from other areas-notably the US , W Africa and the Red Sea ( being the Saudi port of Yanbu) (Platts)

Friday Baker Hughes reported that the US oil rig count rose by 1 unit.

CFTC data released Friday showed that money managers raised their net length in WTI on ICE/CME by 12,454 contracts in the period ended Tues 6/18. Reuters reports that in the same period money managers reduced their net longs in Brent on ICE by

20,520 contracts.

Technically the energies remain stable to firm ---with recent price action and price momentum being positive.

August WTI futures tested resistance at 5813-20 with a high of 5822 --above that resistance is seen at 5910-14. Support lies at 5661-71.

August Brent futures have a double top from Friday/ overnight at 6576-79 ---where we see resistance (6576-82)--above that resistance lies at 6623-38 ---with support seen at 6481-82

August RB futures hit 18543-49 resistance ( the high is 18566)-above that resistance lies at 18656-67. Support comes in at 18210-20 -tested on the low of 18207 --below this support lies at 18090-92.

ULSD support in August is seen at 19168-86 then 18967-87 ---resistance lies at 19408-09 ( the overnight high)--then at 19521-46

NG is up 6,5 cts as hints of warmer temps for the first week of July and some short covering boost the market.

Friday's Baker Hughes rig count for NG showed a decline of 4 units in the latest period.

CFTC data out Friday showed money managers raised their net short position in futures/options on ICE/CME by a total 37,290 contracts.

Of this the CME portion was 30,771 contracts taking money managers net short position total to 149,626 contracts.

With an eye to tomorrow's July options expiration, the only contract with any notable open interest that we see on the CME is the 2,25 put contract -- with open interest as of friday seen at 17,963 contracts ---none of the calls have any notable open interest since they were too deep in the money for so long as the drop to these prices only occurred in the past 2 sessions.

For today we see August futures with resistance at 2.253-55 and support at 2.158 ---momentum is still pointing lower- albeit at oversold level. ---The curve is acting positively --notably in the Sept Jan portion --Sept gaining about 2,5 cts on Jan. There is a double bottom from Friday / Today for this spread at 47,6 cts ---resistance above lies at the 43,7-43,8 ct level--momentum favors Jan still. Current value is about 44,8 cts.

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