Morning Update 02.09.21
Overview
Energies are lower after climbing overnight to new highs for the recent rally. News wires mentioned the dollar weakness, supply cuts and a return of demand to pre-pandemic levels as catalysts for the higher prices seen overnight. But, some analysts were quoted as saying that prices have gotten overbought. The move up today was the 7th straight day of gains. That is the longest streak since January, 2019. (Reuters/Platts)
In Asia, the Jet fuel crack from Dubai crude oil rose to a 3 week high as there has been a modest pickup in air passenger travel. An air travel data firm says that for the second week in a row, year on year statistics showed less of a decline than the week before. The jet crack rose to a value of $4.59.
Libya's oil output is said to have dropped to 1.04 MMBPD from late January's level of 1.3 MMBPD. Exports have been suspended at one facility due to a strike by the Petroleum Facilities Guards. (Reuters)
We are hearing from a source that the Houston Ship Channel was closed last night to traffic due to fog.
Reuters survey is calling for Crude supplies to rise in this week's API/DOE data. Crude stocks are seen rising by 1.3 MMBBL. Gasoline stocks are also seen rising. They are forecast to gain 1.8 MMBBL. Distillate supplies are seen falling by 0.8 MMBBL. Runs are seen shedding 0.1 % of capacity used.
Technicals
Last Wednesday we said that a bull flag pattern suggested WTI could rise to $59. Today's high is $58.62. The markets are overbought. The crude oil contracts look poised to fall below their DC upper bollingers for the first time in 5-6 days.
WTI has its upper bollinger at 5802. Resistance comes in at 5867-74, just above the overnight high of 5862. Support is seen at 5731-34, then at 5655-61.
Brent's upper DC bollinger lies at about 6066. It has support at 5908-12. Resistance lies at 6122-28, tested with a high today of 6127. Above this we see resistance at 6190-98.
RB support is seen at 16470-75. Resistance lies at the past 2 days' highs at 1.6800 and 1.6924.
ULSD's support comes in at 1.7130-40. Resistance is seen at the highs of Monday and today at 1.7530 and 1.7663. Support via the 60 minute chart is seen at 1.7359-66, then at 1.7130-40.
Natural Gas
NG has retreated today as "investors worry about a sudden return of milder temperatures following the next week or two of Arctic cold", as per WSJ reporting. Yesterday the Henry Hub next day cash price fell by 21.5 cents to $3.175, according to NGI.
A colleague yesterday offered the following answer to the question of where the buying could come from to boost the market higher: "what happens when utilities begin their storage injection strip buying in March?" Are they going to wait in the hopes of lower cash prices putting pressure on the board or are LNG terminals and Mexico going to beat them to the punch?"
For now though, technically NG is on the defensive with momentum having turned negative on the DC chart. Support in the low to mid $2.80's has been broken. Support is seen now at 2.730-2.734. Resistance above comes in at 2.887-2.890. The overnight high is 2.927.
Disclaimer
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.