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04-20-2021 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 Tuesday, April 20, 2021

Date

Crude Oil

Diesel

RBOB

Natural Gas

04/13/2021

$60.18 K21

$1.8145 K21

$1.9757 K21

$2.6190 K21

04/14/2021

$63.15 K21

$1.8900 K21

$2.0355 K21

$2.6180 K21

04/15/2021

$63.46 K21

$1.8989 K21

$2.0518 K21

$2.6580 K21

04/16/2021

$63.13 K21

$1.8957 K21

$2.0399 K21

$2.6800 K21

04/19/2021

$63.38 K21

$1.8925 K21

$2.0445 K21

$2.7490 K21

                                                                                        

In the News:  There wasn’t much in the way of new news to move the energy market on Monday. Consequently, prices posted little change.  Concerns over the next wave of COVID is keeping traders from getting too bullish.  Brazil, India and parts of the European Union face a sharp resurgence in new COVID cases as vaccine distribution has been slow. Yet the good news is the CDC reporting less than 6,000 of the more than 84 million that have been vaccinated has been infected by the coronavirus.  The economy would also seem to be bullish.  The Organization for Economic Cooperation and Developments forecasts the U.S. economy will be larger by the end of 2022 than it would have been without the pandemic.  Americans saved in excess of $3 trillion in 2020 thanks to stimulus payments and lack of social or recreational activities.  Further, China said this weekend its first quarter GDP increased at an annualized rate of 18.3% with an 34.2% year-on-year surge in retail sales.  Of course, that’s compared to data affected by COVID last year.  On the bearish side is OPEC + increasing production at the same time Iran and Venezuela have returned to the global market as the U.S. fails to enforce economic sanctions.  May Crude Oil expired with little fanfare and with June at near par.

Products:   Group basis levels were steady to lower while Chicago was posting significant gains.  Group Gasoline ended $0.0025 lower to -$0.0450; Group Diesel ended unchanged at +$0.0300.  Chicago Gasoline basis ended $0.0225 higher to -$0.0150; Chicago Diesel ended $0.0075 higher to +$0.0475. 

Denver is increasingly short on Diesel.  Suncor made diesel for a week but has now gone on a two-month (at least) turnaround and have cut allocations back to near zero through June.  Now that it is the only refinery in the region the impact is devastating.  The pipeline system cannot make up the short fall and the loss of two loading terminals (Suncor East and West) means long lines at the remaining terminals.  There needs to be periodic maintenance, but the Suncor facility has not really run in the past year.  Basis levels are holding at near record highs and Diesel is being trucked in from Nebraska, Kansas and New Mexico, adding to the cost.  Gasoline supply is beginning to tighten up as well as summer specification change is right around the corner.

NYMEX implied Refinery margins ended lower on Monday with a late surge in Crude Oil futures. The May Gasoline Crack ended $0.06/bbl lower to $22.49/bbl; the May Diesel Crack ended $0.38/bbl lower to $16.11/bbl.

 Overnight:   Energy futures are mostly higher this morning on the overnight electronic session.  As of 05:20 in the spot months; (Jun) WTI Crude Oil is $0.05 lower to $63.51; (Jun) Brent Crude Oil is $0.15 higher to $67.20; (May) Diesel is $0.0005 higher to $1.8930; (May) RBOB is $0.0030 higher to $2.0475; (May) Natural Gas is off 22 to $2.7270.

Short Term:  Energy futures are little changed in early trade but continue to hold a bullish bias.  Today is set to look a lot like Monday with little new news confining trade to technical activity with a bullish bias because the speculative community is always buying unless they are taking profits and there is no reason to do that at the present time.  Tomorrow will likely see more volume and more volatility because of weekly inventory data.   The data, like last week, will likely look very bullish because of the huge stock-builds seen last year as COVID reduced energy demand to near nothing.   Best recommendation is too stay covered with maximum price contracts. 

Natural Gas:  Futures continue to push higher despite relatively bearish inventory data.  The EIA reported previous week injection was 61-bcf bringing total stocks up to 1.845-tcf.  The injection was less than the same week last year, yet above the five-year average.  Consequently, the year-on-year deficit increased to 242-bcf from 235-bcf previous week.  However, the deficit to the five-year average was erased and is now a 11-bcf surplus. 

Propane:  Cash Propane prices gave up some of the strength seen late last week.  Conway ended $0.0175 lower to $0.7150; Mt. Belvieu ended $0.0375 higher to $0.7475.  The EIA reported Propane stocks increased 1.0-million barrels last week, reducing the year-on-year deficit by 3 million barrels to 16.2 million barrels.  The build came as demand was 547,000-bpd lower than the previous week, though 358,000-bpd greater than the same week last year.  But also, because Production was up 235,000-bpd from the previous week to 2.289-mbpd.  Exports were up 448,000-bpd to 1.161-mbpd.  Total stocks are 16% below the five-year average for this time of year.  

 

“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."

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