Outlook: Energies are mixed this morning with WTI and RBOB posting losses while ULSD is holding marginal gains. The downtrend has been tested this week with WTI surpassing $90 but macro pressures have resurfaced mid-week halting the rebound. US Producer Price Index beat estimates in this morning's report which may indicate inflationary pressures will take time to moderate. Inflation data will be posted tomorrow at 7:30 CT and is expected to fall from 8.3% to 8.1%. A smaller-than-expected drop could increase speculation that the Fed will take a more aggressive approach to interest rate hikes which could pressure commodities lower. The API will report its inventory survey today and the EIA will report its data at 10:00 CT tomorrow morning. Reuters is estimating a build in crude and a draw in both diesel and gasoline.
Crude
- OPEC cut their fourth-quarter demand growth by 900,000 bpd.
- OPEC cut their fourth-quarter required production by 440,000 bpd.
- OPEC’s 13 members increased production by 146,000 bpd to 29.77 million bpd in September.
- President Biden has accused Saudi Arabia of allying itself with Russia in reaction to OPEC’s decision to cut 2 million barrels for November.
- Poland’s pipeline operator PERN found a leak in a crude pipeline connecting Russia to Europe and Polish authorities believe the leak was accidental.
- Nearby WTI’s 100-day moving average is within 6 cents of crossing its 200-day moving average.
- The API will report their inventory survey at 3:30 CT.
- Reuters estimates crude inventories rose by 1.8 million barrels last week.
- US producer price index was reported at .4%, beating the estimate of .2%.
- As of 8:45 am CST: Brent crude oil down $1.19 to $93.10, US dollar index up $0.142 to 113.363 while the nearby e-mini S&P 500 futures contract is up 8.25 to 3608.00.
Diesel
- The prompt diesel inverse is widening again today trading at a high of 36 cents.
- Reuters estimates diesel inventories fell by 2.1 million barrels last week.
Gasoline
- RBOB has a nearby resistance level of $2.6688 represented by the 50-day moving average.
- Reuters estimates gasoline inventories fell by 1.8 million barrels last week.
Propane
- Conway is trading at $0.8700 and Belvieu is trading at $0.8600.
- Conway is trading at 41% of crude.
- The US is exporting 56% of production as of 9/30/22.
- US corn good/excellent rating increased from 52% to 54% last week.
- US corn harvest is estimated at 31%
Natural Gas
- Total US gas demand decreased to 87.0 Bcf/d.
- Total US dry production declined to 97.0 Bcf/d.
- Overnight weather runs added 3 HDDs through the two-week forecast.
Continuous WTI: In early September we saw WTI’s 50-day moving average cross its 200-day moving average which represents a “death cross” and a bearish technical signal. The bearish trend has continued since the event and has the 100-day moving average in striking distance to cross the 200-day moving average.
