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07-26-2021 Daily Market Comments

6301 Ralston Road – Arvada, CO 80002

Bryant Gimlin, Energy Risk Manager ~ Office: (303) 350-3757 Cell: (970) 590-8782

Daily Market Comments for: For Monday, July 26, 2021


Crude Oil



Natural Gas


$66.42 Q21

$1.9852 Q21

$2.1104 Q21

$3.7790 Q21


$67.42 Q21

$2.0127 Q21

$2.1315 Q21

$3.8760 Q21


$70.30 U21

$2.0870 Q21

$2.2167 Q21

$3.9590 Q21


$71.91 U21

$2.1326 Q21

$2.2732 Q21

$4.0030 Q21


$72.07 U21

$2.1339 Q21

$2.2913 Q21

$4.0600 Q21


In the News:  It was a heck of a week that started with a massive sell-off on Monday that gave some the hope that fear of rising COVID cases and increased production from OPEC + would mean that prices had topped out.  That doubt was erased when four-straight session higher ultimately led to weekly gains, once again.  In the spot months Crude Oil gained $0.26/bb; Gasoline and Diesel were up 4-cents and 2-cents respectively.  The Tuesday session was a technical rally but Wednesday soared higher on weekly fundamental data, which featured draws in Refined Products, lower Refinery Utilization and higher demand.  Weekly demand showed Gasoline up 12,000-bpd to 9.295-mbpd; Distillate up 761,000-bpd to 3.925-mbpd.  Other support came from a recovery in U.S. equity markets, as they too had a scare lower.  China has offered about 22 million barrels of its Strategic Petroleum Reserve for sale in an effort to quell inflation brought on by rising costs of everything from food to fuel. Also supportive was the DOW closing above 35,000 benchmark, (up 238 to 35,062).

Products:   Not much change in Group and Chicago basis values yet moves were mostly higher.  Group Gasoline was unchanged at -$0.0525; Diesel ended $0.0025 higher to +$0.0125.  In correction, Chicago Gasoline basis ended $0.0150 lower to -$0.0350; Chicago Diesel ended $0.0075 higher to +$0.0250.  By comparison Denver Gasoline basis is +$0.6600; Diesel is +$0.500!

In Denver the good news is that Suncor is back open and at 100% allocations for both Gasoline and Diesel fuel.  The bad news is that all the suppliers supporting the Denver market during Suncor’s turnaround are feeling the stress of the prolonged project.  Sinclair has reduced daily Diesel allocations to 60% and moved the terminal cap back down to 8,000-bpd.   Sinclair expects gasoline outages by the end of the month, especially in premium grades.  HollyFrontier is out of Diesel at DuPont and low at Aurora.  Suppliers at Phillips are very short and on daily allocations.  Brokers can’t bring in 7.8# Gasoline and there isn’t enough line space to get enough diesel supply in from the group.

Despite Crude Oil increasing $4.71/bbl in two sessions NYMEX implied Refinery Margins moved higher.  The September Gasoline Crack ended $0.63/bbl higher to $22.48/bbl; September Diesel Crack moved $0.28/bbl higher to $17.70/bbl.

Overnight:   Energy futures are shallowly mixed this morning on the overnight electronic session.   As of 07:00 in the spot months; (Sep) WTI Crude Oil is $0.27 lower to $71.80; (Sep) Brent Crude Oil is $0.06 higher to $74.16; (Aug) Diesel is $0.0026 higher to $2.1365; (Aug) RBOB is $0.0029 lower to $2.2884; (Aug)  Natural Gas is up 117 to $4.1770.

Short Term:  On Friday Baker Hughes reported the U.S. Oil Rig county increased by 7 to 387, 206 above the same time last year.  The Canadian Oil Rig county was down 1 to 93, yet that’s 83 more than last year.  The increased rig count has zero impact on futures, however.  Mixed movement this morning comes as Typhoon In-fa has brought heavy flooding to China and led to a shut-down of Shanghai and several provinces of eastern China. Traders view that as less demand for the next week or so.  There is also concern over growing COVID cases across Asia and the Western Pacific.  Yasir Arafat, a regional health adviser, said “Southeast Asia is on e of the least vaccinated regions in the world, and it also has an extremely low testing rate, so it’s likely that things are even worse than the data suggests”.  The DOW is also called to open lower ahead of pessimistic projections of earnings reports.  Like last week, it is likely to see softness early week to be reversed by U.S. fundamental data midweek.  End users should be looking at Max Price contracts; take advantage of the dip and guard against further price increases as the economy improves.

Natural Gas:  There wasn’t anything overly bullish about weekly inventory, yet futures rallied with the spot month surpassing $4.00 for the first time since December 2018.  There was a pipeline fire in Kansas, but it appears to be out and should have little impact.   The EIA said previous week injection was 49-bcf, which was better than year ago and the five-year average.  The year-on-year stock deficit decreased to 532-bcf from 543-bcf the previous week; the deficit to the five-year average decreased to 176-bcf from 189-bcf.  Heavy cooling demand and hurricane threats remain supportive. 

Propane:  Propane fundamentals saw a little relief in Wednesday’s report, but used the rally in the rest of the complex to pull cash Propane prices higher. Conway ended $0.0125 higher to $1.1000; Mt. Belvieu ended $0.0100 higher to $1.1000.   The DOE reported Propane stocks increased 3.1 million barrels versus expectations for a 1.5 million-barrel build.  The year-on-year deficit was reduced 1.0 million barrels to 19.7 million barrels, (still significant and stocks are 15% below the five-year average).  Demand was 332,000-bpd below the previous week and 217,000-bpd below the same week last year.  Yet production was down 17,000-bpd to 2.316-mbpd, and exports were up 115,000-bpd to 1.1186-mbpd.  Total stocks remain too low to meet a normal crop drying season and still be adequate to supply an average or above average winter heating demand season, which is why all the price support. 

“The risk of loss trading futures can be substantial.  Each investor must consider whether this is a suitable investment. This report is for informational purposes only and is not to be construed as an offer to sell or a solicitation to buy the commodities or securities herein named.  The information in this report has been obtained from sources believed to be reliable but is not necessarily all-inclusive and is not guaranteed as to its accuracy.  Unless otherwise stated any quotes provided by Hill Petroleum does not include commissions or bid/ask spreads. Any opinions expressed in this report are those of the author. Individual employees of Hill Petroleum may express different or contrary opinions.  The above recommendations may or may not be followed by Hill Petroleum or its 0employeefs."

Last Updated on Monday, 26 July 2021 07:19

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