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Outlook: Energies are above overnight lows and the complex has moved gains which vary in degree. WTI is 50 cents higher, ULSD is unchanged, RBOB is 3 cents higher, propane is near 2 cents lower while natural gas is 10 cents higher. The market is keeping a peripheral view on the White House and any decision they may make with respect to tempering energy prices amid concern about inflationary pressures and supply chain disruptions.
Crude
- Iraq said OPEC+ is focused on supplying a stable amount of crude oil to markets and the focus is not on oil price.
- Vortexa shows oil held in tankers near China is below 28 million barrels, down from more than 51 million barrels on October 15.
- OPEC’s crude production rose by 217,000 bpd in October to 27.453 million bpd, less than the group’s share of the 400,000 bpd OPEC+ supply increase.
- There is some discussion within the market that outside of an SPR release the White House could look at a US crude oil export ban. It was only six years ago that Congress lifted a 40-year ban on US oil exports.
- Note that 12 million barrels of oil have been released by the SPR in the last two months. Just last week 3.1 million barrels were drawn down from the SPR.
- Vitol’s CEO says oil demand is back to 2019 levels and is expected to increase.
- Genscape showed Cushing, OK stocks fell 36,000 barrels from the Nov 5 to Nov 9 time period.
- As of 10:00 am CST: Brent crude oil up $0.45 at $83.19, US dollar index down 0.293 to 94.027 while the nearby e-mini S&P 500 futures contract is up 6.25 at 4,696.50.
Diesel
- ULSD futures trade near unchanged at 2.4520 in the nearby contract after having traded to a low of 2.4131 overnight.
- China awarded four refiners a fuel export quota of 1.58 million tonnes and full year quotas would be 36% less than 2020 volumes. This small quota comes as China looks to shore up domestic supplies.
Gasoline
- RBOB is clawing back from yesterday’s deep losses with the nearby up 3.2 cents to 2.9295.
Propane
- Propane is moving lower this morning with spot Conway viewed down 2 at 1.3800.
- Propane exports are viewed on the upswing amid cooler temperatures in China. Into next year Energy Aspects anticipates Asian buyers will turn more towards the Middle East for LPG supplies amid delays and congestion in the Panama Canal.
Natural Gas
- Belarusian President Lukashenko is threatening to shut down Russian gas flowing through Belarus into the EU amid threats of new sanctions against his country stemming from a dispute over migrants seeking to cross into the EU. Most gas flow through Belarus from Russia on its way to the EU is via the Yamal-Europe pipeline. This has lifted European gas prices and is having a slight knock-on impact to HH futures, which are up 10.1 cents in the nearby to $4.981.
