Liquidity Energy Morning Update 12/07/2017
Energies are higher - bouncing back after yesterday's selloff.
Yesterday's selloff was attributed to the stockpile additions in the products as refinery runs rose more than anticipated ( +1,2 % vs expected +0,4%) The Gasoline build of 6,78 mln was much above the expected +1,7/+2,7.
The Gasoline market weakness in the U S seen in recent weeks has caused European refining margins to fall this week to the lowest level since mid-March 2016 -- one analytical firm though sees global refining maintenance falling by 5 mln bpd in March of next year -- and the Q1 refining margin values are holding in Europe (possibly due to the expected loss of capacity usage) (Reuters).
A Reuters poll of analysts is showing them more bullish on 2018 crude oil prices than one mth ago Brent crude seen averaging 58.84 dlrs up from last mth's forecast of 55.71 --WTI forecast rose to 54.78 from 52.50.
Yesterday the Russian Energy minister said that it is too soon to talk of exiting the output accord (Bloomberg).
Technically, the energies remain overall on the defensive - with WTI possibly signaling a fall to 55 dolrs ultimately - as per a colleague's analysis, which we cannot refute. WTI at present has a double bottom from yesterday/today at 5582-87 --with support below that seen at 5555-62 then very good support at 5481-88--resistance lies above at 5675-76 --with the DC mid Bollinger just below that at the 5667 area -- momentum remains negative.
ULSD also has a double bottom from yesterday/today at 18597-18602 --support below that lies at 18523-40 then 18380-89--resistance above comes in at 18814-24 then 18932-46.
RB has its 2 lows from yesterday/today at 16600-20 --momentum here is waning to the downside--resistance above lies at 16894-16908 -- a settlement above that might well signal a low in place. Support below is seen at 16579-88 then good support is seen at 16419-38.
NG is down 10 cts as weather has supposedly turned warmer in the forecasts EIA data due out today is calling for a draw of 7 bcf as per WSJ survey --comparing to last year's -43 bcf and the 5 yr draw of 69 bcf.
Technically NG is weak - having fallen below support at 2.875 ---where we now see resistance for spot futures -- support below is seen at the low seen Thanksgiving weekend at 2.797 and below that support lies at 2.761-64.
The curve has weakened considerably --with Jan losing 5 cts to May - as spreads make new lows--March April below 6 cts --having broken support at 83-85 cts.
We are surprised by the fall as are others - with one colleague having said the following yesterday : "surprised that this mkt hasn’t rallied seems like longs out and cold blast coming”
We are reminded of a colleague's comment of almost 2 weeks ago - that Cash would trade over the futures when the cold arrived. The cold has arrived and the Cash market is even up to the screen -- but our colleague said yesterday that when that happened he thought that futures and cash would be trading $ 3.20 (not the 2.82 we see now).
Liquidity Energy LLC
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 LLC.