this week’s energy market news · 2021. 2. 5. · putting total inventories at ~475 million...

Friday, February 5, 2021x

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Farmward Energy

Weekly Update

This Week’s Energy Market NewsThis Week’s Energy Market NewsWTI: Oil prices continue to move higher as nations across the globe intensify their efforts to vaccinate their populations as soon as possible. While traders are upbeat about a demand recovery, oil supply is expected to remain limited thanks not only to OPEC+ cuts, but also due to the lack of cash among US shale oil producers.

Market Opinion: Markets are once again moving higher finding support from hopes of economic recovery and OPEC cuts. However, the market may be becoming top heavy as total open interest in WTI futures is at its highest levels since July of 2018.

This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.

WTI Daily: WTI has surged this week up over 7.5% on the week after breaking through multiple levels of resistance. The market looks poised to continue an upward trend and challenge resistance at $60. In the near term look for resistance to come in at $58.38 a high back on 1/22. Support will now be found at $55 a strong psychological level. If markets close below $55 the 14-day moving average could act as support at $53.67.

Energy Highlights

OPEC+: The OPEC+ group agreed to maintain output cuts during a policy meeting held on Wednesday. The group feels that despite uncertainty around economic recovery and demand growth, the roll out of vaccines could be a positive and supply side action will keep the market balance. The next meeting is scheduled for Mar 3rd after which a full OPEC+ gathering is set to decide future policy on production cuts.

US Inventories: Also supporting prices, U.S. crude oil stockpiles fell by 994,000 barrels last week to 475.7 million barrels, the lowest level since March, the U.S. Energy Information Administration said on Wednesday. Analysts in a Reuters poll had forecast a rise of 446,000 barrels.

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Weekly Update

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World Oil Demand and Supply: According to a document released after yesterday’s OPEC+ meeting. OPEC+ sees demand above supply throughout 2021. OPEC+ expects deep output cuts will keep the global oil market in a deficit throughout the year, even though the producer group has revised down 2021 demand growth. Even with an alternative plans of slower demand growth OPEC+ only projects supply surplus in April and December of 21.

Energy Highlights

US crude inventories have been on a steady decline since July, drawing a total of ~57.8 million barrels putting total inventories at ~475 million barrels. Crude demand from refinery production continues to remain well below average, last week coming in at ~1.5 million barrels per day below the 5-year average for that same period. Producers words and actions continue to remain aligned as they focus on not oversupplying the market to see higher prices.

Weak refinery production continues to keep PADD 2 (Group and Chicago) ulsd inventories below normal. The table could be set for strong rack prices when ag demand picks up in the spring if this trend continues.

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Weekly Update

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RBOB Daily:RBOB continues to move higher despite being overbought on the RSI signaling a correction. RBOB looks to target highs last seen in February before the collapse. Look for RBOB to find some resistance at $1.6879 a high seen back on February 20th. After that the market could face some resistance at $1.7000. RBOB will find support at the 14-day moving average at $1.5708 with $1.5074 a recent low acting as a second level of support for the market.

Energy Highlights

HO Daily:HO continues to push higher setting new highs everyday and pushing through multiple levels of resistance. The new level or resistance will come in at highs seen last February at $1.7183 and also the top of a current trend channel. If these levels are achieved HO could look to challenge $1.75. Support levels for HO can be found at the 14-day moving average at $1.6080 and $1.5913 the bottom of the trend channel.

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Weekly Update

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Propane News

US propane and propylene supplies fell less than expected, according to the US Energy Information Administration’s (EIA) weekly Petroleum Status Report.

U.S. propane and propylene stocks fell by 1.6 million bbl, to 56.1 million bbl last week. Year on year, stocks have fallen by 28.1%.

An OPIS survey of analysts, traders, brokers and other market participants forecast an average propane and propylene stock draw of 2.91 million barrels. The range of submissions, all of which were draws, was 1 million to 4.5 million barrels.

Exports were up by 34,000 bbl/d to 1.295 million bbl/d. Year on year, they have risen by 2.9%. Imports increased by 10,000 bbl/d to 154,000 bbl/d. Year on year, they have fallen by 40.8%. Propane and propylene product supplied fell by 98,000 bbl/d to 1.49 million bbl/d. Year on year, they have risen by 22.4%.

Production increased by 19,000 bbl/d to 2.408 million bbl/d. Year on year, they have risen by 3.7%. Combined propane and propylene stocks in Gulf Coast (PADD 3) region fell by 600,000 barrels to 30.5 million barrels week over week. Year on year, they have fallen by 47.1%. The Midwest (PADD 2) fell by 800,000 barrels to 14.4 million barrels. Year on year, they have fallen by 11.1%.

The U.S. will ship record monthly liquefied petroleum gas (LPG) in January, breaking the previous all-time high set in December and more than double that coming out of the Middle East, IHS Markit LPG Water-borne data show.

More than half of this shipment is destined for Asia where prices jumped to multi-year highs in early Janu-ary amid robust winter demand due to a cold snap and tight supply driven by shipping delays, according to the data and trading sources.

January loadings from the U.S. is estimated at 4.9 million mt, up 8% from last month, with at least 2 mil-lion mt, or around 60%, heading Asia, while destinations for around 1.2 million mt have yet to emerge as tankers carrying these cargoes have yet to signal their end points, Waterborne data on Tuesday show. On the other hand, the Middle East is poised to export around 2.24 million mt of LPG in January, its lowest monthly volume since Feb. 2017, and all of its shipments are heading to Asia, with India taking the bulk at 54% followed by China at 27%, according to the data.

xFarmward Energy

Weekly Update

xThis communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not ac-cept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.

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Farmward Energy

Weekly Update

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As of 2/2/21 Price 1000 Gal 1500 Gal 2000 GalRuby FM $2.169 $2.159 $2.149 $2.139#2 Clear $2.599 $2.589 $2.579 $2.569

PricePropane Ag/Comm $1.50Propane Home Heat $1.55

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this week’s energy market news · 2021. 2. 5. · putting total inventories at ~475 million...

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