Liquidity Energy Morning Update 10/05/2017
Energies are higher with products outperforming crude oil--in line with the unexpected drop in refinery runs seen in yesterday's DOE report. Yesterday DOE stats showed refinery runs fell by 0,5%--an increase of 1,1% was forecast by the WSJ survey. Distillate stockpiles are the lowest since June 2015 (Bloomberg). Crude oil exports rose to a record = 1.98 mln bpd -exceeding last week's record of 1,49 mln bpd
A Reuter's analyst says that US Distillate stockpiles have fallen 27 mln bbls since the start of the year - versus the 3 mln increase seen in the same time frame a year ago and the average +4 mln bbl build seen in the past decade--stockpiles are now 8 mln bbls below average, and this is reflected in the December Heating oil crack spread (vs crude oil) which is currently over $24 -- up from 15 dlrs roughly in June.
Vladimir Putin yesterday said that OPEC and its partners may extend the output accord until the end of 2018 (Reuters).
The Sharara oil field in Libya has reopened after being shut for 2 days (Reuters).
Saudi Arabia raised their OSP to Asian customers by 30 cts for their flagship Arab Light crude oil - while dropping it by 55 cts to NW European clients and by 20 cts to the US (Reuters).
Technically, the energy picture remains mixed to us - with products showing a firm tone - while crude oil remains soft especially as the forward curve weakens. The front end Brent spreads have given up quite a bit of ground with Prompt Brent now minus 3 cts versus a plus $1.40 just 10 days ago (Reuters). WTI has support at 4972-76 (the latter = yesterday's low) then 4941-42 --resistance is seen at 5067-73; momentum is still negative.
ULSD also has negative momentum on the DC chart basis but is looking firm in price action and on the forward curve as we saw Nov17 test flat to Jan18 the past 2 sessions and now Nov is 85 pts over January.
Nov spot ULSD futures have support at 17670-83 (the latter = the low) with resistance seen at 18006-16 then 18155-72.
RB has seen its DC momentum turn positive and the spot futures are well off the lows seen the previous 3 sessions in the 15421-28 area--for today Nov futures have resistance at 16205-20 then 16336-45--with support lying at 15899-15915 (the low is 157640).
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