MRKT UpDate

Energies are a little lower as OPEC grapples with a decision to cut output.

The Iranian minister has said that they have agreed on a 1,5 mln cut -though the Saudis are said to need Russia on board to cement the deal. (reuters) Analysts are saying that any deal with cuts less than 1 mln bpd will cause a selloff in prices.

 U.S. Equities are taking a hit today as California has declared a state of emergency as the virus has hit a little harder in the US -with more cases reported and a fatality now outside the state of Washington where all previous fatalities had been seen. (reuters) Also weighing on equities is a warning from the Int'l.Air Transport Ass'n that losses in the airline industry could reach $113 bln this year. (reuters)

 Cash Oman crude in Asia flipped to a contango vs May Dubai futures as there are leftover cargoes unsold here --just like in Africa. The Dubai Brent spread was the narrowest in 11 mths as weak Brent structure collides with the belief that OPEC cuts will impact Mideast sour crude --supporting those grades. (Platts) Bloomberg is reporting that a great amount of African crude oil remains unsold for April loading.

Angola and Nigeria have 70% of their cargoes still available -and even 17% for March available.

Chinese demand is weak-- as are European refining margins,which is causing crude demand there to slack off.

The weak margins in Europe are likely impacting the crude market in the near term-as the May June Brent spread Wednesday was the weakest in 2 weeks --flipping back to a solid contango.

 The European refinery run cuts are supporting US Gulf Coast gasoline values.

The US Atlantic Coast only supplies 1/3 of its own needs --relying on European imports and Gulf Coast supplies. February imports of gasoline from Europe fell to 6,1 mln bbls from 10,5 in January --and may continue to drop as per Platts reporting.

US Gulf Coast gasoline jumped 4,5 cts to minus 2 cts vs RB April CME contract Wednesday.(Platts) Also the gasoline is supported by the sentiment that driving will increase as air travel ebbs.

 DOE data was for the most part supportive with crude stocks building less than expected and products drawing more than expected.

Crude built 0,784 mln bbls--expectations were for a build of over 3 mln bbls...the smaller build may have been a function of increased exports -exports were 4,154 mln bbls--a rise of 497,000 vs week ago -and the 2nd largest weekly number on record.

Gasoline drew 4,339 mln --expected was a draw of between 1,8 and 2,8 mln. Distillate supplies fell by 4,008 mln ..they were foreseen as -1,7/-2,4....the product draws were likely a function of reduced refinery runs --crude inputs fell by 312,000.

We read though that the market was disappointed in the DOE stats, because they included an increase in US Crude output of 100,000 bpd to a record 13,1 mln bpd .

 Technically the energies have positive momentum, but seem stuck in a range for now.

The crude oils look to have a possible bull flag set up emerging.

WTI support lies at 4588 --resistance at 4866-78

 RB support lies at 15185-15200 then 14963-75

 ULSD support lies at 15092-99 ( the latter being today's low) --then at 14835 area.

 NG is down 1 ct as weather going forward is not so bullish.

NG EIA data due out today is seen as a draw of 109 bcf . This compares to last year's draw of 152 bcf and the 5 yr avge of -106 bcf. This is seen as the last large drawdown for the season.

 Technically NG has positive momentum but has bumped up against the mid DC bollinger at the double top from yesterday/today at 1845-1847 ---above this resistance lies at 1880-1885 -- a level that seems for now not doable --given the weaker cash value vs futures seen lately and the change over in seasonal demand coming in the next several weeks.

Support for NG spot futures lies at 1795-1800 ( 1795 is the low)--below this support lies at 1750/1756