Outlook: Energies are mixed this morning with crude and RBOB sharply lower. ULSD and Nat Gas are higher. The Nordstream pipeline is expecting shutdowns from Russia, and this has moved Henry Hub higher. A potential Iran Nuclear deal has the market looking lower in oil along with poor economic data has pulled gasoline lower as well. This week’s EIA report could either propel the downward spiral is there are builds. The market could receive a bounce if we see more significant draws.
Crude
- The market is looking lower as potential Iran supply could enter the market soon. Some experts believe that this is the lifeline Europe needs.
- Germany is planning on delaying nuclear power plant shutdowns in order to maintain energy availability.
- US exports hit record levels in last week’s report and much of that oil is part of long-term deals with Asian countries.
- OPEC+ failed to meet their production by 2.9 million barrels per day last month.
- China bought more Russian oil than any other country for the third consecutive month.
- Warren Buffet plans to acquire 50% stake in energy monster Occidental.
- As of 10:06 am CST: Brent crude oil is down $3.44 to $93.29, the US dollar index up $0.644 to 108.799 while the nearby e-mini S&P 500 futures contract is down 72 at 4159.50.
Diesel
- Tight inventories in Europe are being stressed with the Rhine River still too shallow for many boats to make their deliveries.
- Extreme use of air-conditioning in China, Europe, The Middle East, and the US has seen strong summer demand.
Gasoline
- Gas inventories have seen two larger-than-expected draws in the past couple of weeks (10 million barrels total).
- Recent demand has been strong at 9.3 million barrels per day.
- Economic data has held the market down with fears of a recession on the horizon.
Propane
- 1.0850 Conway and Belvieu at 1.0925
- 48% of production is being exported.
Natural Gas
- Dutch TTF is currently at $82
- Russian plans to shut down the Nordstream Pipeline for three days as more maintenance is performed.
Iranian Crude Production: When the first deal was struck Iran came back fast and furious with its production. If they went from current levels to records it may only take 6-12 months.
