Outlook: Energies are mixed to start the morning with diesel and natural gas higher while crude and gasoline are lower. President Biden’s comments yesterday swung the energy market lower. While the delayed repairs in Freeport moved the natural gas market steeply lower. The market will look for direction today from the 9:30 EIA report and the FED announcement at 2:00 pm today. The FED is expected to raise interest rate hikes by 75 bps.
Crude
- President Biden made a statement saying oil refiners making record profits off of the record prices at the pump is unacceptable. He went on to suggest a possible tax on refinery profits may be put in place.
- The FED is expected to put a 75-point rate hike on the market today.
- Russia is set to raise its export duty by 23% on Urals for July.
- The IEA estimates that global demand will climb to 101.6 million barrels per day in 2023.
- US crude imports rose 0.6% which was below experts’ estimates.
- The EIA will release its inventory report today at 9:30 AM CT. The API is predicting a 736,000 barrel build in crude inventories.
Diesel
- The world is expecting the amount of refinery capacity to grow but not at the same pace as demand will grow. This will only make the short supply problem worse.
- The API is predicting a 234,000 barrel build.
Gasoline
- Chinese refiners produced slightly more in May than they did in April. They are still down 11% year over year.
- The API is predicting a 2.16 million barrel draw.
Propane
- Propane inventories are expected to rise by 2.12 mmb
- Conway is at $1.1950 Belvieu is at $1.2000
Natural Gas
- Yesterday the Freeport export facility announced they would be down for a minimum of 90 days
- Reuters poll is expecting a build of 81 to 104 bcf
OPEC+ Compliance: OPEC+ has been announcing production increases to provide more oil to the market. In reality, they have failed to deliver on those commitments and their compliance rates have risen as a result. There is a lot of doubt that the oil union can actually produce at the lofty goals it has set for itself with the current infrastructure state.
