Outlook: Energies are edging higher this morning after holding losses in the overnight trade. China’s 20th Party Congress ended Saturday and the delayed 3Q data was released. China’s President Xi made the decision to transition its key policy-making committee to be made up entirely of his loyalists which came as a surprise to their market. Hong Kong’s Hang Seng Index fell 6.4% on Monday, marking its largest daily loss since the 2008 global financial crisis. Fundamental data out of China leaned more bullish with both oil imports and fuel exports posting gains along with a rebound in GDP. The weekend concluded with no changes in China’s Covid Zero policy will which poses an ongoing threat to demand. Expect macro data and demand monitors to drive the market this week unless a new supply disruption dynamic enters the picture.
Crude
- China’s President Xi Jinping moved to stack his leadership ranks with loyalists as stocks posted their worst day in Hong Kong since 2008.
- China’s oil imports rose to 9.83 million bpd last month, marking the highest level since May but 2% below last year according to Bloomberg data.
- Chinese 3Q economic data revealed that GDP rebounded to 3.9%
- Private-sector activity in the eurozone contracted for a fourth month in October.
- Workers at the UK’s Stanlow oil refinery in England held an unofficial walkout on Friday.
- Brent and WTI’s money manager net-long positions fell by the most since early July last week.
- Crude global floating storage fell by 2.4% over the last week.
- Bakers Hughes reported US oil rigs rose by 2 to 612 last week.
- As of 8:46 am CST: Brent crude oil down $0.20 to $93.30, US dollar index up $0.287 to 112.308 while the nearby e-mini S&P 500 futures contract is up 39.25 to 3802.00.
Diesel
- China’s diesel exports jumped to their highest level in 15 months at 430,000 bpd in September.
- The Commitment of Traders report showed heating oil-managed money traders increased their net length by 4,488 contracts to 28,451 contracts.
Gasoline
- China’s gasoline exports have fallen to 184,000 bpd, marking the lowest level since August 2021.
- The Commitment of Traders report showed RBOB-managed money traders reduced net length by 2,727 contracts to 50,098.
Propane
- Conway is trading at $0.8600 and Belvieu is trading at $0.8250.
- Conway is trading at 42% of crude.
- The US is exporting 42% of production as of 10/14/22.
Natural Gas
- Total US gas demand fell to 82.6 Bcf/d.
- Total US dry production rose to 97.1 Bcf/d.
- Overnight weather runs removed 6 HDDs through the two-week forecast.
- Bloomberg data shows Germany’s natural gas storage rose to 97% full over the weekend.
- Dutch TTF prices have continued to slide and are at their lowest levels since June.
Russian Exports: Seaborne crude exports from Russia fell to a five-week low last week. European sanctions targeting Russian exports have proven to have a growing impact with six weeks left before they’re to be officially enforced. Russian flows to China, India, and Turkey are were also 330,000 bpd off their 2.2 million bpd highs in June
