Morning Update 04.26.21

Overview

Energies are lower as the Covid-19 crisis in India continues and nuclear talks with Iran resume this week. Added to this is news this morning that Libya lifted the force majeure they had on exports from their Hariga terminal. The terminal can handle 250 MBPD. Last week output in Libya was said to have fallen by 300 MBPD. (Reuters) 

India recorded a fresh record number of Covid-19 cases today. The capital city of New Delhi is facing severe oxygen shortages. (CNN) Consultancy FGE expects gasoline demand in India to slip by 100 MBPD in April and by more than 170 MBPD in May. India's total gasoline sales came to nearly 747 MBPD in March. Diesel demand, which at about 1.75 MMBPD accounts for about 40% of refined fuel sales in India, may slump by 220 MBPD in April and by another 400 MBPD in May, FGE consultancy says. (Reuters) Platts Analytics has reduced their total oil demand growth figure for India for this year by 40 MBPD down to 400 MBPD. 

News wires cite a few analysts who mentioned the ongoing nuke talks with Iran as a cause for the drop in energy prices today. (WSJ/Reuters/Platts) 

Friday's Baker Hughes oil rig count saw a decline of 1 unit. 

CFTC data issued Friday showed money managers reduced their WTI net length in futures /options on ICE/WTI by a combined 4,778 contracts. RB net length rose by 5,016 contracts in the week ended Tuesday April 20. The RB rise was a combination of shorts covered and longs added. 

Technicals

The energies remain soft as momentum points lower. 

WTI for June sees support at 6038-39. Resistance lies at 6227-31. The latter is the overnight high. 

June RB support is seen at 1.9440-60, as the support at 1.9653-65 has been tested with a low of 1.9630. Resistance lies up at 2.0103-08. The overnight high is 2.0080. 

June ULSD support is seen at 1.8397-1.8408, then at 1.8270-82. Resistance lies at 1.8775-90, which was tested as the overnight high is 1.8803.

Natural Gas

Weather services tout the fact that this past weekend was likely the last one to see heating demand until next winter. "By mid-week, most of the US becomes near perfect with highs of 70s and 80s," says NatGasWeather. This has caused prices to retreat this morning. (WSJ) 

Baker Hughes NG rig count was unchanged in the latest report seen Friday. 

CFTC data seen Friday showed money managers raised their net length in futures/options in NG by a total 21,576 contracts on the CME in the week ended Tuesday April 20. This was achieved through covering of short positions Their net length position totaled 40,167 contracts as of April 20. 

Technically, NG points lower, though the downside may be limited due to the strong NG feedgas demand for export to be seen over the coming months, WSJ reporting suggests. 
NG support for June futures lies at 2.746-48. Resistance is seen at 2.842-47. 

The options for May NG expire tomorrow. The CME open interest shows the greatest total open interest to be at the $2.75 strike. 

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.