Energy futures are flat this morning after a very busy Monday. Bullish sentiment had been reinstated after Saudi Arabia’s oil minister stated the country would cut production to bring oil inventories back to the five year average. Hints that OPEC plans to cut production further surely didn’t detract from the upward momentum of the day. The main three prompt month futures contracts settled up ~1.5% yesterday. Traders will keep an eye on OPEC cuts as their current supply agreement is set to end at the end of June.
So far, the market seems content to rest for today until inventory estimates are published by the American Petroleum Institute later this afternoon. Draws or builds in national oil and product stocks will likely determine direction for the next couple days.
Gasoline and diesel contracts inched closer to the first round of technical resistance levels yesterday. The first test of buyers’ resolve is waiting about a nickel higher than current levels. Crude oil still has about $2 to climb before a major resistance level is tested.