Outlook: Energies have seen volatility early this morning with macros pulling the market in both directions. WTI started the morning lower with covid cases rising and mass testing underway in parts of China. China’s President also doubled down on tightened measures to eradicate the virus and return to normalcy. The US Consumer Price Index came in under estimates at 7:30 CT which flipped crude positive but has since reeled back from its highs. With a lower-than-expected inflation reading, speculation grows that the Fed may take a less aggressive track moving forward with interest rate hikes. The US dollar index is down over 1500 points following the report which is providing support for equities.
Crude
- Chinese President Xi Jinping called for more decisive measures to curb the spread of covid.
- Covid cases in Guangzhou rose by 3,000 with more mass testing underway.
- Saudi Arabia gave full contractual volumes for December to at least eight buyers in Asia and four in Europe.
- The four-week average for product supplied rose to the highest level since March.
- US crude production rose by 200,000 bpd last week.
- US crude production is back to its highest level since July 2021 at 12.1 million bpd.
- The EIA reported a 3.9 million barrel build in crude stocks last week.
- US October CPI fell to 7.7% vs 8% expected.
- As of 8:20 am CST: Brent crude oil up $0.51 to $93.16, US dollar index down $1.609 to 109.940 while the nearby e-mini S&P 500 futures contract is down 128.25 to 3884.00.
Diesel
- The EIA reported a 521,000-barrel draw in distillate stocks last week.
- Diesel inventories came within 77,000 barrels of a 14.5-year low.
Gasoline
- The EIA reported a 900,000-barrel draw in gasoline stocks last week.
- Gasoline stocks are at their lowest level since 2014.
Propane
- Conway is trading at .9350 while Belvieu is trading at .8950
- Conway is trading at 43% of crude.
- The US is exporting 57% of production as of 11/4/22.
- The EIA reported a 311,000 barrel draw in propane stocks last week.
- Midwest stocks rose by 100,000 barrels.
Natural Gas
- Total US gas demand fell to 95.5 Bcf/d.
- Total US dry production rose to 96.7 Bcf/d.
- Overnight weather runs added 2.5 HDDs through the two-week forecast.
- The EIA is expected to report an 82 Bcf injection today.
- The 5-year average injection for this time period is 20 Bcf.
East Coast Diesel: The premium for spot diesel is 2 cents away from a record high in New York as stockpiles of heating and trucking fuel are at their lowest season level on record. Retail diesel prices are at their highest level since July.
