Morning Highlights
Morning Highlights

8-29 Markets Mixed to Start the Week


Michael Dix

Aug 29, 2022

Outlook: Energies are mixed this morning as crude finds strength while the ULSD market is decidedly lower. Europe continues to catch the world’s eye as energy prices soar and lower-income families struggle to meet the high costs. The domestic Natural gas market is also higher this morning after dipping below zero early. There has been a lot of anticipation of a new Iran Nuclear deal, but it sounds like there are still significant hurdles that could take up to a month to sort out.

Crude

  • Libyan oil production reached 1.22 million barrels per day up from a low that was below 750,000 bpd due to militant action against pipelines.
  • Libya had several militias clash resulting in 23 deaths. As of now, oil production has remained steady.
  • As the Iran Nuclear deal talks continue to drag on for what sounds like will be another month, the Iranian President said that he will not meet with President Biden this week while they are both in New York.
  • Entering the last week of the month crude oil is on pace for a third monthly loss.
  • Shell’s CEO said that the energy crisis could last more than one winter.
  • Elon musk said that the world needs more oil now and he believes that renewables can help fill the gap but not the whole thing.
  • As of 9:48 am CST: Brent crude oil is up $2.94 to $103.93, the US dollar index is down $.091 to 108.712 while the nearby e-mini S&P 500 futures contract is down 34 at 4025.50.

Diesel

  • Tight inventories on the East Coast have triggered warnings that resulted in shipments from other parts of the country to alleviate some stress.
  • The ULSD market is the most overbought part of the energy complex and is likely why it is seeing weakness to start the week.

Gasoline

  • The market bounced off of a crucial support level at $2.60 and has looked to move higher on the follow-up.
  • This week is the end of the summer driving season as the Labor Day Holiday marks a seasonal shift away from summer travel.

Propane

  • 1.200 Conway and Belvieu at 1.1200
  • Propane had a smaller than expected build last week and the Medford supply is still not getting into the Conway flow.
  • The Conway Value is elevated closer to the Belvieu price because of this loss of supply.

Natural Gas

  • The US market has traded both sides and is stronger right now.
  • The US production reached a new record.

Daily WTI Crude: The October crude is testing its 200-day moving average and is currently higher. If the market can close above, it may look to reach higher and test the 100-day moving average.