Outlook: The energy complex is working lower as the day proceeds amid ongoing concern about the implications to demand from the Delta variant and IEA and OPEC monthly reports that skewed bearish on the demand front.
Crude
- The IEA cut its demand forecast for the second half of 2021 by 550,000 bpd and expects global demand will average 98.9 million bpd the last three months of the year. They point to concern about the Delta variant.
- OPEC cut its forecast for demand for its crude in 2022 by 1.1 million bpd amid a stronger production gain from Russia following the groups decision to increase production, implying OPEC would be oversupplying the market in the first half of 2022 if the planned increases in production proceed. This comes a day after the White House called on OPEC+ to increase production more due to high US gasoline prices.
- The US July Producer Price Index rose 1% m/m (vs 0.5% expected) and was up 6.2% y/y (vs 5.6% estimated).
- Weekly jobless claims fell 12,000 to 375,000, in line with estimates.
- Iran picked the head of the country’s natural gas company as oil minister, Javad Owji.
- China gave its independent “teapot” refiners import quotas of 4.42 million tons for oil imports in its third batch of issuance for this year, the smallest amount since 2015.
- As of 10:06 am CDT: October Brent is $0.34 lower to 71.10, the U.S. dollar index is 0.074 higher at 92.996 while the nearby e-mini S&P 500 futures contract is down 2.5 points at 4,438.00.
Diesel
- ULSD is weaker on concern about the impact to demand from the delta variant as expressed today by the IEA.
- The 85,000 bpd naptha hydrotreater at BP's Whiting, IN refinery was shut on August 10, WoodMac/Genscape showed. A hydrotreater is primarily used to remove sulfur and other contaminants from intermediate streams.
- Diesel stocks at Europe’s ARA hub fell 26,000 metric tons to 2.092 million tons, Insights global showed.
Gasoline
- Vehicle miles traveled on US highways in the week ended Aug 8 were 1% higher than the equivalent week in 2019 at 16.9 billion miles driven.
Propane
- After a sharp move above its lows yesterday spot Conway is following through with last trade at 1.1475. The strength comes after the EIA reported a surprise 641,000 barrel weekly US propane draw.
Natural Gas
- The EIA showed US natural gas stocks rose 49 bcf last week versus 47 bcf estimated.
August Conway propane has moved to new highs for its months-long move.
