• Harmonic Trader



    Morning Energy Report

    Courtesy of Battalion Capital, 1/9/2017

    Energies are lower as the specter of US oil output increases weighs.

     

    Friday, the US oil rig count rose by 4 units – to put the current count over that seen a year ago–this is the first time since Jan 2015 that this has happened (Reuters).
    The total US oil and gas rig count as of the Jan 6th report was 665 — Piper Jaffray investment house sees US total count averaging 763 in 2017 and 877 in 2018 (Reuters).

     

    In other news, Friday the Niger Delta Avengers asked fighters to prepare to fight the “enemy” (Reuters).

     

    Friday, the CFTC reported that money managers shed some net length in WTI (by 9626 contracts)–while ULSD and RB net length held by money managers both rose to their highest levels since July 2014 –ULSD longs rose by 5451 and RB longs rose by 11,355 contracts.

     

    Today, the Kuwaiti OPEC governor said that Oman/UAE/Kuwait/ Saudi Arabia and Qatar had all cut their output to abide by the recent OPEC agreement (Bloomberg).

     

    Russian output for the period of Jan 1–Jan 8 averaged 11.114 mln bpd–this is down from the 11,247 mln bpd level seen in October (Bloomberg).

     

    Iraqi exports from their southern ports were said to have hit a record in December of 3,51 mln bpd -up from 3,407 mln in November, but the Iraqi oil minister said that this would not affect their decision to cut output from the beginning of 2017 (Bloomberg).

     

    Libya’s National Oil Corp. said on their website that they are seeking to open more fields (Bloomberg)

     

    Mexicans took to the streets over the weekend to protest the recent gasoline price hikes–some arrests were made (Reuters).

     

    The gasoline arb between Europe and the US is said to have risen in late December to its widest level in 6 years for this time of  year – but not all can take advantage of the wide differential to schedule cargoes from Europe to the US, as freight rates are high (Reuters). In addition to possible added supplies from Europe – we wonder if the winter weather conditions that hit the Southeast this past weekend did not dampen gasoline demand.

     

    Technically, the energies look soft–with the weekly chart momentum indicators turning to lower pricing. RB has broken last week’s low of 16120–support is seen at 15902-14 then 15770-75–resistance above comes in at 16290, then 16455-60 area.

     

    ULSD has support at 16650 (last week’s low ) to 16675 -then at 16565-75 — with resistance seen at 16937-50 (below the overnight high of 17031), then at 17106-09.

     

    WTI has support at 5278-79 (the low so far is 5285), then at 5232-35 –with resistance seen at 5410-12, then 5451

     

    Nat Gas is down almost 8 cts at this time–testing 3.20. CFTC data from Friday showed that net longs held by money managers fell by a small amount in the period ended January 3. The Natural Gas rig count as per Baker Hughes showed an increase of 3 units in the latest report issued Friday. Technically, NG is soft still – with both DC and now Weekly momentum pointing lower. Feb futures has support at last week’s low of 3172–then there is a gap to fill on the DC & weekly charts from 3130 to 3121—resistance is seen at 3260-67 (below the overnight high of 3275) and then at 3307-3317.

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