Outlook: Energies are slipping from outside forces like a stronger dollar and weaker equities. However, the entire energy complex is well supported from a fundamental perspective. The influence from Hurricane Ida is waning, however we may see a net overall petroleum draw again when the EIA releases its weekly report tomorrow.
Crude
- OPEC’s Secretary General Barkindo said oil demand is on the upswing but that demand recovery could be bumpy from here. He said OPEC+ will focus on how to keep the oil market in balance and will “continue to do what it knows best.”
- Inflation will be closer to 4% than 2% by year end, Secretary of Treasury Janet Yellen told a Senate hearing today.
- Equities are tumbling with the DJIA off 885 points. Consumer confidence was lower than anticipated and bond yields are higher.
- President Biden’s infrastructure package is due for a House vote on Thursday while US government funding will expire midnight Thursday and if its not extended parts of the government would be shut on Friday.
- As of 11:51 am CDT: November Brent is $0.81 lower to $78.72, the U.S. dollar index is 0.326 higher to 93.704 while the nearby e-mini S&P 500 futures contract is down 90.00 points at 4343.00.
Diesel
- At 129.3 million barrels, US distillate stockpiles are low for this time of year, helping to push ULSD futures to new highs for the year earlier in the session at 2.3320. Current trade has backed off those levels to 2.2839, down 1.21 cents on the day.
Gasoline
- Nearby RBOB is off near 2.5 cents as equities tumble and the dollar gains in strength. The October RBOB moved to a new high for its move at 2.2462 and the overall trend remains higher.
- Long lines continue at United Kingdom as stations but some progress is being made with 37% of service stations report outages versus 50% on Sunday.
Propane
- US propane inventories stand at 70.3 million barrels, 18.5 million barrels below the 5-year average and 27.6 million barrels below a year ago. In reference to tomorrow’s EIA report, this time of year we see a 5-year average build of 1.5 million barrels.
Natural Gas
- Shortages of natural gas in Europe and China have pressured US Henry Hub futures higher as US LNG exports are expected to remain peaked amid relatively low inventory levels in the US.
- Natural gas futures have been extremely volatile with yesterday’s surge extending into early trade with the nearby contract peaking today at 6.280. Current trade has backed off considerably at 5.818, up 11.2 cents on the day.
Brent rose above $80 in today’s session before a pullback to the current trade at 78.66.
