Morning Update 08/22/2019

Energies are higher on a slow news day in late summer, as the contracts trade in recent range, having—in the case of ULSD and the crude oils—reached towards the upper end of said range, yesterday. 

We read yesterday's DOE data for crude in a positive light: refinery runs rose more than expected at +1.0 % (+0.1/+0.2 % was foreseen), crude inputs rose by a healthy 401,000 bpd, net imports of crude oil fell by 616,000 bpd. Cushing stockpiles fell for the 7th straight week. Slightly disappointing were the product builds: gasoline built by 0.312 mln bbls vs. the expectations for a modest decline while Distillate stocks rose by 2.61 mln bbls (above the slight build expected).

The market has been supported the past 24 hrs by comments by the Iranian President, who said that if Iran's oil exports fell to zero, the international waterways would not have the same security as before (Reuters). 

Also supportive is news from Platts that the Asian market continues to see good buying interest for Mideast sour crude oil. This was reflected in the narrowing of the Brent Dubai spread to $2.19 on Thursday—down from $2.71 Monday.

Technically, the recent ranges are intact, but the contracts show an uptrend bias and momentum is positive.

Oct WTI has support at 5572-81, then 5528-33 (the low is 5544). Resistance lies at 5657-60, then 5710-13 (yesterday's high). 

Oct Brent support is seen at 5992-6002, tested with a low of 5999. Resistance comes in at 6141-50. 

Oct RB support lies at 15508-14. Resistance lies at 15814-34. 

ULSD for Oct has support at 18510 and resistance at 18849-52. 

NG is up slightly with the EIA storage data due out today expected to show a build greater than last year's and greater than the 5 yr avge, as well. Expectations are for a build of 59 to 61 bcf—above last year's +47 and 5 yr avge +51 bcf. 

Technically, we see NG as showing signs of weakening. Yesterday, the spot futures registered a downside reversal day, which some might say signals a trend change. Momentum is trying to turn downward on the DC chart.

Support in spot futures lies at 2134-38 and resistance is seen at 2221-2224. The recent up move shows us a trend line on the DC chart that intersects today at 2.140. To us, a close below yesterday's settle of 2.170 would confirm the reversal and put the contract in a defensive mode.

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