MKT Update

Energies are lower today -led by WTI & RB as it seems some fears for Gulf of Mexico operations due to Hurricane Dorian have subsided. Last we have seen on Weather Channel website is for the storm to possibly stall over Florida and head to Georgia - and not so far into the Gulf to disrupt oil output or refinery operations in any big way.

Heading into the Labor Day weekend Gas Buddy says that retail pump prices will be the lowest for this period in 3 yrs.

They said further that prices have fallen for 6 straight weeks --to $2.58 - and might fall to $ 2.55 this weekend.

Prices are likely to drop further into the fall when cheaper gasoline is sold seasonally. (WSJ)

Reuters says that US refinery maintenance this yr will be less than last yr. ... 1,6 mln bpd is seen offline at some pt.

over the next 2 mths --400,000 bpd less than 2018. Less is being taken offline as refiners ramp up for making more low sulfur fuel oil ahead of IMO 2020. Gasoline supplies may tighten as more low sulfur fuel is made since both are in the lighter end of the refining process.

Platts says that traders are expecting a slight uptick in Mideast crude OSP prices when they are issued next week.

A Reuters poll of 51 economists/analysts has seen their oil price forecast drop from last month's prediction.

2019 Brent prices are seen averaging $65.02 --down 4% from last month's $67.47. Brent so far this year has averaged

$65.08 --according to the Reuters article....WTI for 2019 is seen averaging $57.90--down from $59.29 forecast last month.

The WTI average so far this year is said to be $57.13 as per Reuters...... the forecasts in this poll are the lowest predictions for prices in 16 months.

Today is the last trading day for the September Rb & ULSD & October Brent futures contracts.

The CME Labor day holiday trading hour schedule has the markets closing at regular time today ( 5 PM NY time ) ---reopening Sunday at 6 PM NY time --closing at 1PM Monday --- then reopening at 6 PM NY time and staying open until 5 PM Tuesday.

Technically we see prices remaining range bound --though their momentums have turned positive.

Oct WTI support is seen at 5567-72 ( tested with a low of 5570) ---resistance lies at 5685-89 then 5747

Oct RB futures support comes in at 15484-15500 then 15378-81 --with resistance lying above at the prior 2 sessions' highs at 15808-28

Oct ULSD support is seen at 18510-28 and resistance at the dbl top of 18734-35 ( Thurs/today) --above this resistance lies at 18852-71

NG is down 3 cts after yesterday reaching the highest price since the first of the month --despite slightly bearish EIA data.

Storage built by 60 bcf --above the +56/+57 estimates. Storage is now +363 bcf/+14,55 % over last year but remains -3,4%/-100 bcf vs the 5 yr avge.

Asian spot prices for liquefied natural gas (LNG) were steady this week as spot demand from Japanese buyers stockpiling ahead of winter soaked up supply offered from Australia and Malaysia. (reuters)

Hurricane Dorian - although seen by some as supporting prices due to possible supply disruption -is more likely a slight negative for NG pricing due to the loss of demand ( some power may be out -and the rain from the storm may keep temps slightly cooler )--also the Gulf of Mexico is home to only 3% of the US total NG production.

Technically we see NG as stable --although some of the bullish argument may be waning as momentum starts to get closer to overbought condition.

Also the curve has favored the front end dramatically this week --evidenced by October gaining over 8 cts on April since last Friday.

Momentum still favors the October vs April - but we wonder if the market has the strength to push Oct over April -- we question such as we head to a lower demand period for NG as days get shorter and temperatures cool down.

For today we see flat prices for October futures showing support at 2237-2242 --with resistance lying above at 2.310-2.313.

The 2.313 number is the .618 Fibonacci retracement of the DC move from the recent 2.489 high to the recent 2.029 low.

On the positive side for NG --the market remains over the 50 day mvg avge on the DC chart basis --that values is 2.244.

NG spot futures yesterday settled over a long term downtrend line ---that intersects today at 2.275 --another settlement over that would be also supportive.

Is the market speculative position short enough to keep short covering rallies continuing? Is the advent of winter in 3 months supportive enough to keep prices stable to higher? Or is the advent of fall going to drag prices down due to less demand in a few weeks ??

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