Monday's Market Minute: Watching Energy Markets

Ahead of the cash open, investors and traders are keeping a watchful eye on energy markets to begin the week. Crude oil and gasoline futures are higher in reaction to news the Colonial pipeline has been shut down due to a cyber-attack, and there’s still no indication when it’ll reopen. The pipeline supplies roughly 45% of the gasoline, diesel, and jet fuel to the North and Southeast. The shutdown has energy producers scurrying to find storage should the disruption persist.

While bid, crude prices continue to run into resistance up around the 68-70 dollar area; crude to 70 gets it back to levels we haven’t seen since the fall of 2018. Keep an eye on gasoline futures (/RB) back to 2.30, levels we haven’t seen since the spring of 2018, with resistance above at 2.60 that coincides with the lower extreme of a range established between 2011 and 2014. While the pipeline news is bullish, concerns related to Covid-19 restrictions being extended in New Delhi and Sydney impacting demand has kept the move up somewhat muted.

In addition to crude prices, this week traders and investors are keeping an eye on a busy week to come and some of the inflation data due out later in the week. Wednesday we have CPI, PPI on Thursday, and Friday the focus will be on the Retail Sales figures. In terms of companies reporting quarterly results, we have Marriot and Tyson reporting today, and later in the week we have a couple of closely-watched names.

Keep an eye on Disney DIS, Alibaba BABA, Airbnb ABNB, Doordash DASH, and Lumentum LITE. We closed the week out Friday with new all-time highs in copper, and two of the four major U.S. indices. The U.S. dollar took a hit in reaction to the weaker-than-expected jobs report, and should be watched as further weakness targets the lows from earlier this year down around 89. Keep in mind a weak dollar is supportive of commodity prices, which feeds right back into the inflation narrative.

Image by Kristina Kasputienė from Pixabay