Outlook: Energies are lower across the board today with headline volatility roaring back this week. President Biden has made an effort to defuse tensions following a missile that entered Poland and killed two citizens. The president stated that Poland’s missile defense was likely the culprit of the explosion but was still an effect of the Russian barrage. The Druzhba pipeline which carries oil from Russia to eastern Europe is still experiencing disruption. The pipeline carries roughly 1.3 million bpd of supply but it's unclear how much supply was moving through the pipe at the time. The EIA will report US inventories at 9:30 CT. Trade estimates are looking for a crude draw between 400,000 and 5.8 million barrels.
Crude
- President Joe Biden told allies that the explosion Tuesday night in Poland was caused by Ukrainian air defenses but was ultimately sparked by the Russian missile barrage.
- The Druzhba pipeline carrying Russian oil to parts of Europe could restart soon after repairs are made to restore power, according to Hungary’s Foreign Minister.
- The Druzhba pipeline has a capacity of 1.2-1.4 million bpd according to the International Association of Oil Transporters.
- Iraq is seeking to increase oil production and increase exports to meet global market demand and OPEC decisions according to their state news agency.
- An oil tanker linked to an Israeli billionaire was hit by a projectile about 150 miles off the coast of Oman, according to a statement from its owner.
- Reuters estimates crude inventories fell by 400,000 barrels last week.
- An industry leader survey showed crude inventories fell by 5.8 million barrels last week.
- The EIA will report inventories at 9:30 CT.
- As of 8:02 am CST: Brent crude oil down $0.88 to $92.98, US dollar index down $0.072 to 106.332 while the nearby e-mini S&P 500 futures contract is down 11.25 to 3987.00.
Diesel
- Reuters estimates diesel inventories fell by 800,000 barrels last week.
- An industry leader survey showed diesel stocks rose by 850,000 barrels last week.
- President Biden is considering requiring oil companies to store more fuel inside the US due to the current level of inventories, according to Energy Secretary Jennifer Granholm.
Gasoline
- Reuters estimates gasoline inventories rose by 300,000 barrels last week.
- An industry leader survey showed gasoline inventories rose by 1.7 million barrels last week.
Propane
- Conway is trading at .9025 while Belvieu is trading at .8800
- Conway is trading at 43% of crude.
- The US is exporting 57% of production as of 11/4/22.
- OPIS estimates propane inventories fell by 1.02 million barrels last week.
Natural Gas
- Total US gas demand rose to 118.7 Bcf/d.
- Total US dry production down to 97.4 Bcf/d.
- Overnight weather runs added 2 HDDs through the two-week forecast.
- Human error was cited as the source for the June 8th explosion at the Freeport LNG facility.
Continuous ULSD: Nearby diesel has continued to test a few of its moving averages over the last week but has yet to show a breakthrough. Diesel has shown resilience to some of the more significant moves lower in crude but a move higher may be necessary to allow diesel to break the technical wall.
