Morning Highlights
Morning Highlights

9-30 Market Looks to Close with a Weekly Gain

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Sep 30, 2022


Outlook: The energy complex is once again looking for direction as we started the morning higher before selling off and subsequently having a nice bounce off of the lows. It still feels like overall economic concerns across the globe are winning the battle for influence in the market.  


  • OPEC is expected to announce a production cut in the range of 500,000 to 1 million barrels per day.
  • Weak European currencies are making their energy crunch even more costly and hurting them even more.
  • Oil is set for its first quarterly drop since 2020.
  • The US imposed further sanctions on a Chinese oil storage company and 9 other businesses for violating the restrictions on Iran oil exports.
  • Stray drones have been sighted at several oil wells and drilling sights in Europe heightening fears that an energy conflict may be on the horizon.
  • Despite all of the
  • Baker Hughes will announce its rig counts today at 12:30 pm CT.
  • As of 9:46 am CST: Brent crude oil is down $0.61 to $87.88, US dollar index is even at $112.254 while the nearby e-mini S&P 500 futures contract is up 4 to 3,658.25


  • Chinese air travel has lagged behind the US in its post-pandemic recovery thus hurting demand for diesel.
  • France has said they will be in the market to replenish their depleted diesel reserves in the coming months.


  • Total global refinery outages stand at 2.52 million barrels per day.
  • China plans to allow 15 million tons of oil and fuel to be exported for Q4. This is the largest number that has been given by China this year and could be a big relief to those who desperately need fuel.


  • 0.8825 Conway and Belvieu at 0.8900
  • Conway is now a discount to Belvieu which is a reversal from the past couple of months.
  • Weak crop drying demand as well as delayed harvest are the leading reasons for the weaker Conway prices.
  • Lower inventories should provide some support to Conway especially as harvest picks up in the Midwest.

Natural Gas

  • 778 million cubic meters of natural gas have leaked out of the Nordstream pipeline. This is equivalent to 3 days of demand in Germany.
  • Yesterday saw a 103 bcf build in inventories which was close to market6 expectations.

Refinery Outages: The refinery situation is still not great as we continue to hear that more refineries have delayed their maintenance in favor of historically great crack spreads. Refiners are running extremely hard (at over 90%). Eventually, they will have t do turnarounds and further maintenance to avoid hazardous working situations. The outage number also does not consider that the US alone has lost round 1 million barrels per day in capacity due to permanent shutdowns.