farmward energy x friday, may 8, 2020 weekly update this ... · friday, may 8, 2020 x farmward...
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Friday, May 8, 2020x
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Farmward Energy
Weekly Update
This Week’s Energy Market NewsMarket Comments:
U.S. Production: The oil rig count in the United States is expected to hit an all-time low, reflecting data from nearly 80 years ago as output and spending is cut by the energy industry to deal with the covd-19 crash. Last week the rig count was 4 units above the low of 404 set back in May of 2016. Today’s expec-tations are that rigs will be off again as they have averaged 55 rigs coming offline since the beginning of March. North American oil cuts could hit 1.7 million barrels per day by the end of June.
Market Opinion: Energy futures are starting slightly elevated this morning and are on course for a second consecutive week of gas as more countries move ahead with plans to ease economic and social lockdowns. Expectations are that we are still going to see volatility as traders may get bullish on shut-ins and then again bearish on the stock builds that continue to pile up.
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.
Rbob (daily): Gasoline fu-tures have steadily increase over the past several weeks de-spite the crash that was seen in March where the complex fell nearly $1.40. The bearish trend can be attributed to a combi-nation of covid-19 demand de-struction and inventory levels. Rbob is currently seeing sup-port at the 61.8% level ($0.9067) with its next line of resistance nearly 33 cents higher at $1.2348. Moving averages are flatting out as well giving way to a strengthening market.
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Farmward Energy
Weekly Update
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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.
Heating Oil (Daily): Heat-ing oil has fallen $1.5395 in the last 76-das before it start-ed its recent rebound. Sup-port is currently being seen at $0.7412 and resistance is being seen near $0.83. All three moving averages are coming down still however that could change if we con-tinue to see a bullish trend that’s forming. Overall heat-ing oil is still relatively weak but appears to be gaining strength on the notion of global production cust.
WTI Crude Oil (Daily): Crude oil prices have steadi-ly come back over the past several trading periods as demand destruction cause by covid-19 lockdowns ease. Future values are testing the 61.8% level, which is acting as resistance. Global supply is holding the complex from moving past that resistance level currently. Support is being seen at $22.48, which can bee seen on the adja-cent chart. There was a gap created in early March, tech-nically speaking, this gap will likely fill at some point, how-ever, will not likely happen for some time as we continue to trade in a sideways pattern.
xFarmward Energy
Weekly Update
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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.
Exxon Mobil has shut in the number of rigs in the Permian basin by 75% and is left with just 15 operating rigs. Chevron has only 5 rigs running there, down 71%. The strategy for Exxon is to cut back on its newest, most prolific wells first and bring them back at a time when prices are better. When a well is shutdown, oil can migrate away from the well and back into the porous rocks. The Bakken in North Dakota has already shut more than 1/3 of active wells. Non-fracked wells need crude prices to be around $30/barrel to be profitable, while some fracked wells need $45/barrel. Operations in the Gulf of Mexico will be the last to shut because of the miles of flow lines that carry oil along the seabed to facilities onshore. When these lines are turned off for more than a short period they can clog.
EIA Inventory Report & Jobless Claims: Yesterdays inventory report showed a larger than expected build on distillate stocks (+9.5mmbls) however, this was overshadowed by the larger than expected draw on gasoline (-3.2mmbls) and smaller than expected build on crude oil (+4.6mmbls). The draw on gas has some believing that covid-19 demand destruction may be bottoming out as lockdowns continue to ease. Jobless claims fell to 3,169,000 from 3,846,000.
xFarmward Energy
Weekly Update
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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.
U.S. propane stocks increased by 2.5 million barrels last week to 59.4 million barrels, which is about 15% greater than the five-year average inventory levels for the same time of year. Gulf Coast, Midwest, and East Coast inventories all saw builds of 1.2 mil-lion barrels, 0.9 million barrels, and 0.2 million barrels, respectively.
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Farmward Energy
Weekly Update
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 accept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information.
As of 05/0520 Price 1000 Gal 1500 Gal 2000 GalRuby FM $1.459 $144.9 $1.439 $1.429#2 Clear $2.009 $1.999 $1.989 $1.979
PricePropane Ag/Comm $1.05Propane Home Heat $1.15
For any inquiries, please contact: Morgan Office...............................507.249.3196
Pat MachtEnergy Manager
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Travis WendtEnergy Sales Specialist
Office: 507.723.7350Cell: 507.227.7119
Brooks TorkeEnergy Sales Specialist
Office: 507.485.3153Cell: 507.616.6958