Outlook: Energies are relatively unchanged today with the exception of diesel up around 2 cents. Volumes are light today with the majority of the markets closed due to Martin Luther King Jr. Day. After a bullish last week, the market will look to extend momentum over supply concerns again this week. Production has increased for both Kazakhstan and Libya, however reaching the OPEC+ target of 400,000 bpd is still in question.
Crude
- Kazakhstan’s oil production has been fully restored after the unrest that spurred in early January. Daily output rose to 258,000 tons on Jan 16 up from 246,000 tons on Jan 13.
- Libya said Sunday oil output was back to 1.2m bpd from the low of 700,000 bpd.
- China’s central bank cut its key interest rate for the first time in almost two years to help boost the slumping economy from Omicron.
- China’s oil processing volumes rose more than 4% from 2020 and 7.4% from 2019.
- Crude floating storage fell 18% last week which is the lowest level since September.
- Indonesia targets $13.2b investment in upstream oil and gas this year, above the $10.7b realized in 2021.
- Indonesia aims to increase its crude oil output to 703,000 bpd from 660,000 in 2021.
- Brent Crude was overbought on a 14-day RSI for the first time since late October while WTI briefly reached the overbought zone.
- As of 9:35 am CST: Brent crude oil down $0.05 at 86.02, US dollar index up $.110 to 95.277 while the nearby e-mini S&P 500 futures contract is up 2.5 points to 4657.25.
Diesel
- India’s daily sales of diesel fell by 14% in the first part of January from decreased mobility due to Covid spikes.
- Global passenger jet fuel demand rose by 0.4% week-on-week.
- US passenger numbers are at 80% of 2019 levels.
Gasoline
- India’s gas sales fell by 14% for the first part of January due to Covid decreasing travel.
- Energy Aspects believes global gasoline demand will grow by 1.44m bpd y/y this quarter despite Omicron’s impact.
Propane
- NGL markets observe today’s holiday with no official OPIS pricing.
- HDDs are forecasted 104.5% for January.
- Conway and Belvieu both closed at $1.16 last Friday.
Natural Gas
- Iraq wants to begin importing LNG in periods of high energy demand by 2023.
Crude will look to extend bullish momentum this week. The next resistance level will be at $85 which was tested in October and early November but never managed to settle above the mark.
