Outlook: Energies are mixed to start the first day of February. A lack of new news has had the markets tracking equities and the dollar, however tomorrow will look to change that. OPEC+ will meet tomorrow morning and is expected to move forward with their 400,000 bpd increase for March and the EIA will report US inventories. There are rumors that the recent rally in oil may move OPEC+ to increase their 400,000 bpd production target. Increasing demand and tight supply were the market drivers in January and that trend is expected to continue if additional supply doesn’t enter the market.
Crude
- President Putin is meeting with the Hungarian prime minister today and is expected to meet with French President Macron shortly after.
- Russia continues to deny that any invasion of Ukraine will take place.
- Kazakhstan’s January oil output was down 2% from December according to Reuters.
- Goldman Sachs believes oil’s recent surge could persuade OPEC+ to increase its output target beyond 400,000 bpd.
- With more than half of Bloomberg’s oil tanker trackers published, China is on pace to receive almost 1.6 million bpd less crude than it did in December.
- TotalEnergies SE and its partners are investing over $10 billion to produce Uganda’s oil discoveries and build a pipeline that will turn the country into a significant crude exporter. Output is expected to peak at 230,000 bpd by 2025.
- Exxon Mobil will boost spending on new oil wells and other projects by as much as 45% after posting the biggest profit in 8 years.
- The API estimates will be released at 3:30pm.
- As of 9:24 am CST: Brent crude oil up $0.01 to $89.27, US dollar index down $.155 to 96.386 while the nearby e-mini S&P 500 futures contract is down 200 points to 4502.25.
Diesel
- Sunday’s TSA passenger count of 1.714 million was a 2 week high.
- Daily TSA passenger counts are still consistently below pre-pandemic levels.
- Reuters estimates diesel stocks to decline by 1.7 million barrels.
Gasoline
- A winter storm working across the central US will decrease demand as some areas are expecting 20+ inches of snow and ice.
- EIA forecasts gas stocks to rise by 1.4 million barrels.
Propane
- Conway propane is down 1.5 cents at $1.29 and Belviue down 1.75 cents to $1.2825
- Propane hubs should continue to show strength in domestic demand and an export market becoming more active.
Natural Gas
- Texas is set to experience below-average temperatures which may impact production and the power grid.
- Total demand dipped for the third consecutive day yesterday, down 2.7 Bcf/d.
- Overnight weather runs removed 6 HDDs over the last two days.
Continuous ULSD: Jet fuel demand remains an area of pressure on the diesel market as travel numbers continue to report below pre-pandemic levels. Winter storms moving across the US have also decreased travel demand due to snow and ice covered roads.
