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06-21-2021 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, June 21, 

Date

Crude Oil

Diesel

RBOB

Natural Gas

06/14/2021

$70.88 N21

$2.1116 N21

$2.1712 N21

$3.3520 N21

06/15/2021

$72.12 N21

$2.1123 N21

$2.1705 N21

$3.2400 N21

06/16/2021

$72.15 N21

$2.1034 N21

$2.1562 N21

$3.2510 N21

06/17/2021

$71.04 N21

$2.0668 N21

$2.1342 N21

$3.2530 N21

06/18/2021

$71.64 N21

$2.0932 N21

$2.1683 N21

$3.2150 N21

In the News:  The headline event last week was Thursday’s price dip that came about following hawkish statements from the FOMC.  They predicted the economy would grow at a 7% annualized rate this year and they hinted at tapering the $120 billion per month treasury and bond security purchase program that has been in effect since March 2020.  That sent the dollar higher and commodities and equities lower.  Yet it was thought to be merely reason for a bear correction in a bull market and Friday’s rally seemed to prove that notion correct.  There was also short covering with a tropical depression forecast to become a tropical storm in the Gulf of Mexico and expected to bring 20 inches of rain to Louisiana.   Meanwhile weekly fundamentals were bullish with a surge in weekly demand; Gasoline up 880,000-bpd to 9.360-mbpd; Distillate was up 923,000-bpd to 4.336-mbpd and an increase in the year-on-year deficit of total stocks. A federal judge has granted an injunction to stop the Biden administration from blocking new oil and gas leases on federal lands.  The number of U.S. Oil Rigs up 8 to 373, which is 189 more rigs than the same period last year.  The Canadian Oil Rig Count was up 15 to 74, 69 more than the same week last year.

Products:   Group and Chicago basis went different ways, higher Group and lower Chicago.  The good news is that traders were passing on the lower prices.  Group Gasoline settled $0.0050 higher to -$0.0775; Group Diesel ended unchanged at -$0.0125.  Chicago Gasoline basis ended $0.0025 lower to -$0.0575; Chicago Diesel ended $0.0150 lower to -$0.0450. 

On Friday Denver Products terminal ran dry on Diesel and was nearly dry on Gasoline.  Suncor came out of a nearly two-month turnaround project but has just now started making product.  It will take a good week for Suncor to start out with small allocations and several weeks before full allocations could be met.  As of Friday, there was no resupply ETA from Sinclair for DPT.  Supply in the Magellan could be stressed as Scott City ran out of Diesel and Aurora is downstream of that. 

NYMEX implied Refinery margins ended higher on Friday yet still posted significant loss for the week.  The July Gasoline Crack ended $0.83/bbl higher to $19.43/bbl, yet down $1.48/bbl for the week; July Diesel Crack ended $0.51/bbl higher to $16.27/bbl, $1.88/bbl lower for the week.

Overnight:   Crude Oil and Refined Products are mixed to start the week this morning on the overnight electronic session.   As of 05:10 in the spot months; (Jul) WTI Crude Oil is $0.19 higher to $71.83; (Aug) Brent Crude Oil is $0.19 higher to $73.70; (Jul) Diesel is $0.0101 lower to $2.0831; (Jul) RBOB is $0.0084 lower to $2.1599; (Jul)  Natural Gas is off 40 to $3.175.

Short Term:  Tropical Depression Claudette has made landfall in Louisiana, bringing high winds and heavy rains.  There are no reports of impact to refining or energy distribution so far but is likely whether due to power outage or flooding.    OPEC meets tomorrow to discuss August production quotas.  The DOW is called to open 135 higher after settling at 33,290, down 533-points on Friday.  Also supportive is the election of Ebrahim Raisi as president in Iran.  That likely delays a potential Nuclear Deal with Iran and keep sanctions in place.  Raisi is a hardliner and is himself under U.S. sanctions.  There still appears to be a bear correction in a bull market and long-term influence remains bullish.  End users should be actively covering with Maximum Price contracts if they have not already done so.

Natural Gas:  Surprisingly, Natural Gas futures moved lower on Friday.  It was a surprise as a tropical storm in the Gulf was causing platform evacuations and weekly inventory on Thursday coming much more bullish than expected.  The EIA reported weekly injection was just 16-bcf, well below last year and the five-year average.  The deficit to the five-year average increased to 453-bcf from 383-bcf the previous week.  The deficit to the five-year average increased 126-bcf from 55-bcf the previous week. 

Propane:  Cash Propane prices held steady despite downside influence from the rest of the complex.  Conway ended $0.0175 higher to $0.9650, 2 cents higher for the week; Mt. Belvieu ended $0.0125 higher to $0.9775, up 3 cents for the week.  The EIA said Propane stocks increased (only) 1.5 million barrels last week, which increased the year-on-year deficit to 13.8-million barrels; 13% below the five-year average.  Once again, the disappointing stock build was due to high exports, which were up 577,000-bpd to 1.445-mbpd.  Weekly demand was 47,000-bpd below the previous week and 370,000-bpd below the same week last year.  Production was up slightly, 6,000-bpd to 2.305-mbpd.  

“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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