• Supply
  • Social Media
VisitTAC - The Arnold Companies
Customer LOGIN
TACenergy
Customer
LOGIN

Energy Futures Are Attempting To Rally To Start The Week

Monday, Jul 25 2022
Market Talk

Energy futures are attempting to rally to start the week, after surviving a test of the low end of their July trading range. Both RBOB and ULSD futures had moments in the past few days of looking like they’d break down on the charts and spark another big wave of selling, but both contracts managed to find enough buying to keep them in a sideways pattern for a while longer.

It’s not just gasoline futures that have been dealing with heavy selling in July. Most regional basis values in the US have dropped 20 cents or more since the July 4th holiday, suggesting that the demand slowdown is not just a theoretical issue anymore.  Severe backwardation in the futures market also seems to be contributing to the negative values in prompt basis, as prices will drop 20 cents or more once the September RBOB contract takes the pole position, incenting sellers to discount barrels to the August contract while they can, and taking a big bite out of refinery margins that hit record highs in the past few months.

Baker Hughes reported that the US oil rig count held steady last week, while the natural gas rig count increased by 2. With supply & labor bottlenecks keeping the pace of drilling relatively subdued compared to previous booms in the energy market cycle, the global thirst for US natural gas may suddenly be influencing the amount of oil production as drillers have to compete for workers and other assets. The Dallas FED predicts that Texas Job growth will hold north of 4% this year after surging north of 7% in June, with new well permits and other energy related activities a key indicator of strong job growth continuing in the state.

The EIA reported this morning that the US became the world’s largest LNG exporter this year, as new capacity came online at the (only) 7 facilities in the country equipped to freeze and ship natural gas overseas. US natural gas prices have surged from $5.50 July 5th to $8.50 this morning, with the record setting heatwave hitting large parts of the country getting the blame. Those prices are still less than a third of what European and Asian spot markets are trading at, which will most likely keep the export demand high for years to come.

Money managers seem to be getting more comfortable betting on higher petroleum prices, increasing their net length across the board for a 2nd week. European grades are seeing the most activity, with Brent net length held by large speculators increasing by almost 50% last week alone, while Gasoil contracts increased by 37% on the week. Open interest remains near 5 year lows, so if the big money funds continue to pour money into these contracts, it could have a larger influence on prices than when liquidity is higher.

Click here to download a PDF of today's TACenergy Market Talk.

News & ViewsMarket Talk

News & Views
Latest Posts

KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Go Rentals Opens 10 New Locations with Partner, TAC Air
Tac Air's new facility features B17-G model airplane, Military Situation Room
TAC Air B-17G Model Brings Nostalgia and Tears

News & Views
Archive

Market Talk
Latest Posts

Market Talk
Archive

TACenergy logo
Sales:  800-375-FUELSupply & Logistics:  800-808-6500

Get in Touch

Sign up to receive market talk updates in your inbox each day.
Establish a credit account.
Apply For Credit
Need to make a fuel order today?

Follow us

TACenergy
  • Supply
  • News & Views
  • Market Talk Updates
  • Social Media
  • Contact a Representative
  • Customer Login
  • Apply For Credit
Find Your Next Great Role With TACenergy.
Explore Careers
  • Privacy Policy
  • Terms of Use
  • Employee Login
  • Sitemap
TACenergy, LLC © 2022. All Rights Reserved.