Outlook: The energy complex is moving lower to this point but not in aggressive fashion. WTI is down 21 cents, ULSD is down 1.5 cents while RBOB is 2.1 cents lower. Ongoing concern about demand due to the Delta variant continues to be a main focus point.
Crude
- The preliminary University of Michigan Consumer Sentiment Index for August was 70.2, dramatically lower than 81.2 estimated.
- Global oil demand “abruptly reversed course” in July after rising 3.8 million bpd in June, the IEA said in its monthly oil market report yesterday.
- Following President Joe Biden's decision to pull all US troops from Afghanistan, the Taliban continue to capture major cities in Afghanistan. This week the US said it feared they could capture the capital Kabul within 90 days. The US is sending in 3,000 troops to help evacuate the US embassy in Kabul.
- Canada’s Alberta Premier Jason Kenney and Alberta Energy Minister Sonya Savage have expressed their displeasure with the White House’s call on OPEC+ to increase oil production which comes just months after the cancellation of the Keystone XL pipeline which would have brought 830,000 bpd of crude from Canada to refining centers in the US.
- JP Morgan lowered its year-end Brent price forecast to $78 from $83, pointing to a reduction in China’s demand and from Asian countries.
- As of 9:52 am CDT: October Brent is $0.26 lower to 71.05, the U.S. dollar index is 0.416 lower at 92.618 while the nearby e-mini S&P 500 futures contract is up 3.00 points at 4,457.50.
Diesel
- ULSD is down 1.04 cents to 2.0935, with pressure found after poor consumer sentiment readings and concern about the Delta variant.
- Group and Chicago basis are within reach of seasonal averages and seasonally basis errs higher until the beginning of October, at which point the trend is typically lower through year-end.
Gasoline
- Gasoline crack spreads have been under pressure the last two days with the September crack against WTI at $25.86, down from yesterday’s peak of $27.61.
- The Biden Administration spoke about restricting interstate travel to those that have the Covid vaccine but have decided against it for the moment as they view that move would be too polarizing, AP reports.
Propane
- Conway is trading near even on the day at $1.1575 while Mont Belvieu is called near 1.1450, up $0.6375.
Tropical Depression Fred is expected to drop heavy rains as it moves up the western coast of Florida in the coming days.
