Outlook: The energy complex rose in early trade but has retraced with current trade mixed. Trade retains the likelihood of viewing dips as buying opportunities in a supply constrained global environment. A number of reports including weekly EIA stats along with monthly OPEC and IEA releases are due in the next couple of days. Focus within the monthly reports will likely be centered on energy challenges facing Asia and Europe heading into winter with tight coal and natural gas stocks leading to switching to oil based products and its derivatives, including diesel. Outside a decision by OPEC+ to increase production beyond their stated 400,000 bpd increase per month timetable, this remains a market where your DPR should be erring long.
Chinese Coal futures traded on the Zhengzhou Commodity Exchange rose to a fresh record, which underscores the tight supply situation. Hydropower generation constraints that lifted coal demand, a ban on Australian coal imports, and reduced internal production have pressured stocks of coal and also natural gas.