Outlook: Crude and products are riding the reversal from yesterday driven by mixed headlines regarding OPEC’s production. The complex erased steep losses after Saudi Arabia denied claims of conversations involving an increase in production. They also reiterated that the current 2 million bpd cut is expected to be in effect until the end of 2023, but adjustments could be made if necessary. China is still seeing covid cases rise and Beijing moved to shut down parks, shopping malls, and museums, but the market appears to be shrugging it off for today. The API will report inventories this afternoon and the EIA will confirm data tomorrow morning. Reuters is expecting a draw in crude and diesel, and a build in gasoline.
Crude
- Saudi Arabia and the UAE have denied the claims that OPEC+ is considering a 500,000 bpd production increase.
- The current OPEC+ production cut of 2 million is set to continue until the end of 2023.
- China has paused purchases of some Russian crude as they wait for price cap details to see if they can get a better price.
- Dutch unions have started a partial strike at BP’s 400,000 bpd refinery in Rotterdam according to Bloomberg.
- BP’s 150,000 bpd Toledo refinery extended restart plans to late Q1 2023 following the fire that occurred in late September.
- US waterborne crude imports rose by 510,000 bpd to 2.78 million bpd last week, according to Bloomberg data.
- The US Oil Fund ETF posted an inflow of more than $150 million on Monday, the biggest inflow since March.
- Reuters estimates crude inventories fell by 2.2 million barrels last week.
- The API will report their inventory survey at 3:30 CT.
- As of 8:09 am CST: Brent crude oil up $1.51 to $88.96, US dollar index down $0.340 to 107.495 while the nearby e-mini S&P 500 futures contract is up 17.25 to 3975.00.
Diesel
- Reuters estimates distillate inventories fell by 200,000 barrels last week.
- December ULSD tested its 100-day moving average of $3.46 yesterday for the second consecutive day but again rebounded following the swing in crude.
- US waterborne diesel imports fell by 5,300 bpd to 114,000 bpd, according to Bloomberg.
Gasoline
- Reuters estimates gasoline inventories rose by 600,000 barrels last week.
- Gasoline stocks sit 12 million barrels below their 5-year average.
- December RBOB is testing its 100-day moving average of $2.5056 today.
- US waterborne gasoline imports fell 133,100 bpd to 392,800 bpd, according to Bloomberg.
Propane
- Conway is trading at .8600 while Belvieu is trading at .8500.
- Conway is trading at 45% of crude.
- The US is exporting 61% of production as of 11/11/22.
Natural Gas
- Total US gas demand fell to 121.3 Bcf/d.
- Total US dry production up to 97.6 Bcf/d.
- Overnight weather runs removed 5 HDDs through the two-week forecast.
- Reuters is estimating between a 65-100 Bcf draw from storage last week.
Gasoline Prices: Gas prices in the US have fallen to their lowest level since March and near pre-war levels. AAA reports the national average at $3.662, down from over $5 in June. Global demand concerns have helped the market maintain a downward trend. Chart sourced from Bloomberg.
