Outlook: Energies are mixed this morning with the prompt crude contract down around a dollar while products push higher. This week, crude prices traded within a 10-dollar range with low liquidity amplifying market movements. The market continues to focus on tightening global supplies and looming recession. European economic data revealed a slowdown in major EU economies, while covid cases in China remain at two-month highs. Inventories across energy remain well below 5-year averages however signs of slipping demand have dominated attention. The market will turn its attention toward the US economy next week when the Fed is scheduled to meet. The consensus is that the Fed will raise interest rates by 75 bps.
Crude
- European economic data released this morning revealed a slowdown in major European economies.
- WTI’s discount to brent nearly hit 8 dollars Friday morning.
- TC Energy has reduced operating flows on a segment of the Keystone pipeline by around 15% following a disruption to power supplies.
- The US is aiming to enforce a price cap on Russian oil in December at the same time EU sanctions go into full effect.
- Vortexa shipping analytics show that oil tankers that previously carried Iranian oil are switching to haul Russian crude.
- China’s independent oil refiners are increasing operating rates to their highest levels since December according to OilChem.
- Chinese covid cases hovered around a two-month high this week.
- Baker Hughes will report their rig count at 12:00 CST.
- As of 8:32 am CST: Brent crude oil down $0.87 to $102.99, US dollar index down $0.087 to 106.823 while the nearby e-mini S&P 500 futures contract is up 4.25 to 3997.00.
Diesel
- Diesel continues to be more resistant to downside pressure.
- Exports from Russia’s main diesel port are on course to fall in July
Gasoline
- Bloomberg reports thinning traffic in a composite of 15 Chinese cities overnight.
- The EU has reduced gasoline flows to the US.
- ARA gasoline stocks have jumped back to levels last seen in 2020.
Propane
- Conway is trading at $1.12 and Belvieu is trading at $1.1375.
- Conway is trading at 46% of crude.
- The US is exporting 64% of production as of 7/13.
Natural Gas
- Total US gas demand decreased by 0.9 Bcf/d to 101.0 Bcf/d yesterday.
- The EIA reported a build of 32 Bcf yesterday.
- The 5-year average build for this time of year is 41 Bcf.
- Last night’s weather runs were unchanged.
Global Refinery Outages: Global refinery outages were at 1.02 million bpd as of July 21, according to Bloomberg data. Outages in the US were at 353,000 bpd, while in Russia, they were at 67,000 bpd.
