Outlook: Energies were lower during the early morning hours but have rebounded to up to over $91. The US is expressing optimism that progress is being made towards the Iran nuclear deal. The dollar is also seeing strength today after the CPI beat estimates show inflation continues to grow. On the bullish side, the EIA reported another net draw of petroleum inventories. A small build in crude was anticipated however we saw a 4.8-million-barrel draw which pushed markets to their daily high. Falling supplies are accompanied by record demand over the recent 4-week stretch at 21.9 million barrels. The oil market has found comfort trading back and forth around $90 so far this week and it looks like it will take significant news to pull away in either direction.
Crude
- The US and Saudi Arabia met yesterday to discuss strategies towards stabilizing rising energy prices in addition to the Iranian nuclear deal.
- The Biden administration expressed optimism that an Iranian nuclear deal can be done and that talks are in the final stretch.
- OPEC acknowledged that the recovery in global oil demand could surpass its current forecast for this year.
- OPEC’s report showed inventories in developed nations around 202 million barrels below their average pre-pandemic.
- The EIA reported a draw of 4.8 million barrels for last week.
- US demand reached 21.9 million barrels for last week.
- The Consumer Price Index monthly increase beat the consensus .5% and reached .6%
- The CPI year-over-year reported 7.5% for January beating the consensus 7.3%
- As of 9:17 am CST: Brent crude oil up $1.16 to $92.73, US dollar index up $.133 to 95.642 while the nearby e-mini S&P 500 futures contract is down 16.00 to 4462.75.
Diesel
- The EIA reported a draw of 0.9 million barrels for last week.
- Diesel stocks are 28.9 million barrels below the 5-year average.
Gasoline
- The EIA reported a draw of 1.6 million barrels for last week
- Gasoline stocks are 8.3 million barrels below the 5-year average.
Propane
- Conway is down 1 cent to $1.21, Belvieu is down .25 cents to $123.75
- Propane stocks fell 1.9 million barrels for last week.
- Propane inventories are 15.8% below the five-year average.
Natural Gas
- The EIA is expected to report a 221 Bcf draw today
- Total US demand fell for the 5th day in a row to 113.5 Bcf/d
- This week’s overnight weather runs have removed 28 HDDs for the two-week forecast.
WTI Stockpiles: Oil stocks saw a surprise draw after estimates called for a small build of 800,000 barrels. Demand recovery continues to outpace production and is helping support oil around $90.
