Outlook: Energies are continuing the upward momentum today with January crude trading back above $80. Russia continues to voice that it will not supply oil to any countries that support the price caps proposed by the EU and G7. The market may find support when the embargo and price cap go into effect on Monday regardless of the price level the cap is established. China saw covid cases decline yesterday, additional declines could signal they are over the hump of this recent wave. Industry estimates are calling for a draw in crude between 2.8-7.9 million barrels in today’s EIA report. Products are expecting to see builds, led by diesel which saw an increase in waterborne imports last week.
Crude
- China reported 37,828 new covid cases yesterday, which is down from 38,645 the day prior.
- OPEC announced yesterday that they will hold the December 4th meeting virtually and have canceled their joint technical meeting on Friday.
- The EU failed to establish a price cap level yesterday and plans to continue discussions today.
- Russia’s foreign ministry spokeswoman said Russia will not supply oil to countries that back the price cap.
- US Energy Envoy Hochstein said yesterday the US is still eyeing $70 for refilling the SPR.
- The US SPR fell by 1.4 million barrels last week.
- Reuters estimates crude inventories fell by 2.8 million barrels last week.
- An industry survey yesterday afternoon showed crude inventories fell by 7.9 million barrels.
- The EIA will report inventories at 9:30 CT.
- US Q3 Annualized GPD was reported at 2.9% vs 2.6% est.
- Fed’s chair Powell will speak today at 12:30 CT.
- As of 8:59 am CST: Brent crude oil up $2.38 to $85.41, US dollar index down $0.402 to 106.420 while the nearby e-mini S&P 500 futures contract is down 5.25 to 3956.00.
Diesel
- Reuters estimates distillate inventories rose by 1.5 million barrels last week.
- An industry survey yesterday afternoon showed distillate inventories rose by 4 million barrels.
Gasoline
- Reuters estimates gasoline inventories rose by 1.7 million barrels last week.
- An industry survey yesterday afternoon showed gasoline inventories rose by 2.9 million barrels.
Propane
- Conway is trading at .8025 while Belvieu is trading at .7850.
- Conway is trading at 43% of crude.
- The US is exporting 61% of production as of 11/18/22.
- OPIS estimates propane inventories fell by 191,000 barrels last week.
Natural Gas
- Total US gas demand rose to 103.4 Bcf/d.
- Total US dry production fell to 97.6 Bcf/d.
- Overnight weather runs added 8 HDDs through the two-week forecast.
- Natural gas prices will remain sensitive to rail strike developments.
Continuous Daily WTI: WTI has been on the rebound this and will look to maintain momentum. WTI will look to close above its 9-day moving average in orange today which could signal additional upside to the end of the week.
