Outlook: Energies started the morning trading higher after digesting the news from the OPEC+ meeting. Crude traded up to a new contract high early this morning of $89.72 after OPEC announced they were staying with their production increase of 400,000 bpd for March. However, after the meeting, Irans oil minister express concern over oil supply and said the US should ease sanctions to allow Iran to re-enter the market. Following this comment, the market reversed and is now down ~40 cents. The attention will turn quickly to the EIA report where a build of 1.5 million barrels is estimated, while the API showed conflicting data with a draw of 1.65 million barrels yesterday. An unexpected draw could give the market additional strength following a bullish OPEC+ meeting and $90 resistance may be tested.
Crude
- OPEC+ set their production increase for 400,000 bpd for March.
- OPEC’s 13 members increased production by 50,000 bpd in January.
- Nigeria saw the largest production increase at 100,000 bpd while Libya saw the largest decrease of 140,000 bpd according to Reuters.
- OPEC+ Joint Technical Committee cut their overall surplus in 2022 from 1.4 million barrels to 1.3 million barrels.
- Iran’s oil minister made comments about the US lifting sanctions to allow them to re-enter the oil market to relieve prices and tight supply.
- The API Data showed an crude draw of 1.65 million barrels
- Reuters estimates a build of 1.5 million barrels.
- The EIA will report inventories at 9:30am
- As of 9:24 am CST: Brent crude oil down $.44 to $88.76, US dollar index down $.352 to 96.033 while the nearby e-mini S&P 500 futures contract is down 16.5 to 4553.00.
Diesel
- Reuters estimates a 1.7 million barrel draw for diesel.
- The API data showed a 2.5 million barrel draw for diesel.
Gasoline
- Reuters estimates a 1.6 million barrel build for gasoline.
- The API data showed a 5.8 million barrel build for gasoline.
Propane
- Propane stocks are expected to fall 3.69 million barrels according to OPIS estimates.
Natural Gas
- Nearby Nat Gas is up ~50 cents on the day.
- The Midwest and Texas are expected to experience below average temps which may introduce freeze offs.
- Total demand declined by 6.7 Bcf/d yesterday.
- Overnight weather runs removed 2 HDDs.
Continuous Natural Gas: Natural gas is surging today and is up over 10%. A major winter storm is moving across the Midwest which brings the risk of supply disruptions on top of back end cold in the forecast.
