Energy Report: Real And Imagined

Bloomberg's take was that state-run refiners in India are looking to buy less crude from Saudi Arabia as demand in the Asian nation is poised to dip amid a resurgence of covid-19, and relations between the two countries sour over prices. Processors in the world no. 3 oil importer have sought to reduce May supplies by about one-third of their average monthly purchases, according to people handling the procurement of crude at these refiners. Indian Oil Corp. and three other processors sent their requests, also known as nominations, to Saudi Aramco on April 5, said the people who asked not to be named due to company policy. Aramco is expected to inform customers of their allocations in the coming days. The Saudi Arabia-India oil saga continues.  

Yet now oil is up as we get back to real data. The American Petroleum Institute - API - releases its report today and expectations are that it will show a substantial crude oil draw in the area of 4 to 8 million barrels. Refiners are making a comeback as is demand and that should set oil back on a more solid track. Days of sharp moves in a huge trading range both up and down will eventually break out to the upside. Lockdown fears aside, the trend of rising demand in the U.S. will be solid and we see supply globally tightening.  

Natural gas is getting a bit of a pullback on a warm-up. Shoulder season weakness but it should be an opportunity to buy some summer calls.

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