Farmward Energy x Weekly Update This Week’s …x Friday, June 26, 2020 x Farmward Energy Weekly...
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Friday, June 26, 2020 x x Farmward Energy Weekly Update This Week’s Energy Market News Market Comments: Oil is coming off its lows on talk that authorities in the U.S. will not go back to more stringent measures like the shelter-in-place that shut down the economy a few months ago. The optimism is still cautious as no one really knows yet how consumers are going to behave in a pandemic world. Jobless claims were only slightly higher than expectations this week-- 1.48 million versus guesses of 1.35 million. Durable goods were much better than expected at 15.8% versus guesses of 9.8%. Traders have turned cautious this week with Covid-19 cases back to where they were at the height of the breakout. A quick economic recovery was starting to be priced into the markets, but news that the U.S. is in danger of surpassing the high record on daily cases is interfering with that optimism. Russian oil production: In order to hold on to “their” share of the marketplace, at least 2 state-owned banks plan to lend ~ $6 billion in order to drill 3,000 unfinished oil wells. Once oil prices recover, the wells can be finished faster vs. starting from scratch. U.S. shale producers tend to drill but not completed wells when oil prices are low, rather than freezing all activity. Market Opinion: Energy futures continue their slide lower as covid-19 cases increase giving way to what could be considered round 2. Paired with record-high U.S. crude inventories released in yesterday’s report, it looks as though the energy complex will lose some ground that it tried to make up over the past several weeks. All eyes are on the governments now and how they will act to the new surge of the pan- demic. Expect to see WTI test a recent support level near $35 if the slide continues further than right now. is 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. e information contained herein is accurate to the best of our knowledge and belief. is 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): Heating oil futures have been on a rally for the last 39 days after seeing the low on 4/28/2020 of $0.58. HO has gained over 14% of its losses back in the bull- ish run it is seeing, however has been running into some strong resistance near the $1.2280 mark. This hurdle it’s tried to break through is the bot- tom of the gap that was created in early March (represented by the dot- ted circle). Fears of a 2nd wave of Covid-19 have been the focus the last few trading periods which is ac- counting for most of the bearishness that is being seen now; after state of- ficials have eased up on lockdowns.
Transcript of Farmward Energy x Weekly Update This Week’s …x Friday, June 26, 2020 x Farmward Energy Weekly...
Friday, June 26, 2020x
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Farmward Energy
Weekly Update
This Week’s Energy Market News Market Comments: Oil is coming off its lows on talk that authorities in the U.S. will not go back to more stringent measures like the shelter-in-place that shut down the economy a few months ago. The optimism is still cautious as no one really knows yet how consumers are going to behave in a pandemic world. Jobless claims were only slightly higher than expectations this week-- 1.48 million versus guesses of 1.35 million. Durable goods were much better than expected at 15.8% versus guesses of 9.8%.
Traders have turned cautious this week with Covid-19 cases back to where they were at the height of the breakout. A quick economic recovery was starting to be priced into the markets, but news that the U.S. is in danger of surpassing the high record on daily cases is interfering with that optimism.
Russian oil production: In order to hold on to “their” share of the marketplace, at least 2 state-owned banks plan to lend ~ $6 billion in order to drill 3,000 unfinished oil wells. Once oil prices recover, the wells can be finished faster vs. starting from scratch. U.S. shale producers tend to drill but not completed wells when oil prices are low, rather than freezing all activity.
Market Opinion: Energy futures continue their slide lower as covid-19 cases increase giving way to what could be considered round 2. Paired with record-high U.S. crude inventories released in yesterday’s report, it looks as though the energy complex will lose some ground that it tried to make up over the past several weeks. All eyes are on the governments now and how they will act to the new surge of the pan-demic. Expect to see WTI test a recent support level near $35 if the slide continues further than right now.
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): Heating oil futures have been on a rally for the last 39 days after seeing the low on 4/28/2020 of $0.58. HO has gained over 14% of its losses back in the bull-ish run it is seeing, however has been running into some strong resistance near the $1.2280 mark. This hurdle it’s tried to break through is the bot-tom of the gap that was created in early March (represented by the dot-ted circle). Fears of a 2nd wave of Covid-19 have been the focus the last few trading periods which is ac-counting for most of the bearishness that is being seen now; after state of-ficials have eased up on lockdowns.
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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): Heating oil futures have seen quite a rally since the low in mid-April as it stays with-in the bullish trend channel (seen on adjacent chart). Front month futures look to be testing the 100% level on the Fibonacci retracement – which is also the same level of the gap that is seen in mid-March when OPEC & Russia couldn’t agree on a supply cut target. If futures can break through the 1.2280 level, the next psychological line of resistance well be near 1.37 – the price that was seen before the gap was created.
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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.
Just this week the crude oil market fi-nally managed to penetrate the signif-icant $40 resistance region. The crude oil market has not been over $40 since early March.This could be the early indications the short-term trend is turning positive. Certainly, the trade will be keeping an extremely close eye on virus cases go-ing forward.
Increasing oil prices over the last sev-eral weeks has prompted some produc-ers to resume drilling, but investors are still trying to digest when the slide in the number of active rigs will end. In Cana-da and the United States, the number of operating oil and natural gas rigs fell to a record low last week. The number of oil and gas rigs in the U.S. fell for the 15th straight week to 266 rigs, which is 701 fewer than this time last year. As Jack-ie indicated in her afternoon update on Friday, the number of oil rigs decreased for the week by 10 rigs, bringing the to-tal to 189 (shows in the chart). This is well below the 789 active rigs that were op-erating at this time last year. Canada’s overall rig count fell this week by 4 to only 17 active rigs, which is down 102 compared to last year.
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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.
Propane News- EIA Inventory summary below
For the week ending 6/19/20, the EIA reported a build of 2.3 million, increasing total propane inventory to 71.3 million barrels. This is 4.6 million below 2019 and 2.1 million over the 5-year average of 69.2 million. During this week last year, propane experienced a 1.4 million build.
Propane demand (product supplied) decreased by 372,000 bpd to 701,000 bpd. Propane production in-creased 12,000 bpd to 2,154,000 bpd.
Regional Inventories: Midwest up 600,000 to 17 million; Gulf up 1.6 to 44 million; East up 100,000 to 6.9 million; and West flat at 3.4 million. Historical Averages: Midwest is 3 million below 2019 and 2.8 below the 5-year average of 19.8 million. Gulf Coast inventory is 4.9 million below last year and 2.2 above the 5-year average of 41.8 million. East Coast is 3 million above 2019 and 2.1 above the 5-year average of 4.8 million. Total propane imports were up 3,000 bpd to 63,000 bpd. East Coast down 1,000 to 22,000; Midwest down 2,000 to 14,000; Gulf unchanged at 0 bpd; West up 6,000 to 27,000. Propane exports grew by 433,000 to 1,179,000 bpd. One year ago exports were 1,174,000 bpd.
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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 accept 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.
As of 06/23/20 Price 1000 Gal 1500 Gal 2000 GalRuby FM $1.649 $163.9 $1.629 $1.619#2 Clear $2.109 $2.099 $2.089 $2.079
PricePropane Ag/Comm $.99 SummerfillPropane Home Heat $.99 Summerfill
For any inquiries, please contact: Morgan Office...............................507.249.3196
Pat MachtEnergy Manager
Office: 507.249.3196Cell: 507.430.2233
Curty MeyersEnergy Sales Specialist
Office: 320.826.2214Cell: 507.430.1884
Travis WendtEnergy Sales Specialist
Office: 507.723.7350Cell: 507.227.7119
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Office: 507.485.3153Cell: 507.616.6958
