Outlook: Energies weren’t trading too far from unchanged prior to the EIA release trade is mixed amid data that skewed bearish overall. Crude and ULSD are higher while RBOB is lower. Biden met with the media yesterday afternoon and expressed optimism about families gathering for the holidays if they are vaccinated. The encouraging travel news from the President should support demand into next week as the spread of Omicron will continue to be closely monitored.
Crude
- The EIA showed US crude stocks fell 4.715 million barrels last week while Cushing stocks rose 1.46 million barrels. Yesterday afternoon the API estimated crude inventories fell 3.7 million barrels and a Reuters estimate suggested a 2.6 million barrel draw.
- A study by the National Institute for Communicable Diseases shows that the Omicron variant has an 80% lower hospitalization risk.
- Boris Johnson announced that the UK will not be implementing stricter restrictions ahead of Christmas.
- Quarter three GDP was revised to 2.3%, up from a second quarter estimate of 2.1%, according to the Bureau of Economic Analysis.
- The Singapore government said it will freeze all new ticket sales for flights and buses from Dec. 23 to Jan. 20 into the city/state.
- Germany, Ireland, the Netherlands and South Korea are among countries that have reimposed partial or full lockdowns in recent days.
- As of 10:21 am CST: Brent crude oil down $0.xx to $xx.xx, US dollar index down 0.070 to 96.271 while the nearby e-mini S&P 500 futures contract is down 76.00 points to 4575.00.
Diesel
- The EIA reported US distillate inventories rose 396,000 barrels last week amid a strong setback in demand w/w of 1.174 million bpd.
- Yesterday afternoon the API estimated an 800,000 barrel draw while a Reuters poll suggested a 30,000 barrel build.
Gasoline
- The EIA reported US gasoline stockpiles rose 5.5 million barrels last week, well above API estimates calling for a 3.7 million barrel build and a Reuters poll suggesting a 500,000 barrel build.
Propane
- US propane inventories fell 849,000 barrels last week, EIA data this morning showed. This was lighter than a 1.5 million barrel draw estimated through an OPIS poll. US demand fell but exports surged by 703,000 bpd to 1.550 million bpd. Exports will be monitored closely in coming weeks as propane acts as a substitute to natural gas in certain applications.
Natural Gas
- Nearby Henry Hub natural gas futures are pushing above the $4.000 mark this morning, above its 200-day moving average which comes in at $3.943.
- Financial Times writes energy companies in Britain are warning that “stratospheric” wholesale gas and power prices threaten a “national crisis.”
- Six oil-fired units were turned on in France Tuesday as gas prices continue to climb.
With the help of another 2.5 million barrel drawdown from SPR stockpiles, total petroleum inventories in the U.S. fell 9.525 million barrels last week and remain well below the 5-year average. This is a clearly supportive force to prices across the energy complex.
