Outlook: Energies are finding strength today with product gains outpacing crude. The early Reuters poll suggests that both gas and diesel inventories fell last week while crude inventories rose which may be providing the edge higher for products with a lack of market driving headlines to start the morning. The API will report its inventory survey this afternoon which has often varied from Reuters polls over the last year. Tomorrow may provide direction for the rest of the week with the EIA reporting official inventory data alongside the Fed meeting. The consensus is a 75-basis point hike while there has been speculation around a full point increase with inflation falling at a slower than expected rate last month. Low liquidity is still present across the energy complex and any surprise to the market can exacerbate price moves.
Crude
- Reuters reported yesterday that OPEC+ fell short of its production target by 3.6 million bpd in August.
- China’s spending on Russian energy products hit a record $8.3 billion last month.
- Russia’s seaborne crude exports have fallen by nearly 900,000 bpd over the last two weeks, partly due to weather and an unexplained decline in shipments from the Baltic.
- The Federal Reserve will meet tomorrow when they are expected to increase interest rates by 75 bps.
- The Department of Energy will offer 10 million barrels from the SPR for delivery in November. The sale is part of their scheduled 180-million-barrel release.
- The US SPR fell by 6.9 million barrels last week.
- US waterborne crude imports fell by 349,000 bpd to 2.36 million bpd for the week ended Sept 16.
- Reuters estimates crude inventories rose by 2.3 million barrels last week.
- The API will report its inventory survey at 3:30 CT.
- Today is the last trade day for the October crude contract.
- As of 7:41 am CST: Brent crude oil up $0.39 to $92.39, US dollar index up $0.385 to 110.122 while the nearby e-mini S&P 500 futures contract is down 27.25 to 3890.00.
Diesel
- Reuters estimates diesel inventories fell by 500,000 barrels last week.
- Europe’s share of diesel and gasoil arrivals from the Middle East will rise to 31% of total imports this month, up from 19% in the past 12 months.
- Chinese diesel exports rose to a 13-month high on weak domestic demand.
Gasoline
- Reuters estimates gasoline inventories fell by 900,000 barrels last week.
- Chinese gasoline exports rose to their highest level since March.
Propane
- Conway is trading at $1.0275 and Belvieu is trading at $1.0150.
- Conway is trading at 51% of crude.
- The US is exporting 59% of production as of 9/9/22.
Natural Gas
- Total US gas demand increased to 88.8 Bcf/d yesterday.
- Total dry production flat to 96.2 Bcf/d.
- Overnight weather runs removed 4 CDDs through the two-week forecast.
Russian Exports: Russia’s seaborne exports have fallen by 900,000 bpd to 2.54 million bpd in the week to Sept 16, compared with 3.42 million bpd in the seven days to Sept 2. The four-week rolling average of seaborne exports fell below 3 million bpd for the first time in more than 5 months. Flows to Asia haven’t appeared to be enough to offset the decline in volumes to Europe.
