Outlook: Energies are continuing the upward trend this morning with crude and products all observing gains. Mixed interpretations of demand forecasts are providing support to energies this week. OPEC expects oil demand to grow by 2.25 mbpd next year to 101.8 mbpd, while the IEA expected oil demand to grow by 1.7 mbpd to 101.6 mbpd. Both have made revisions in relation to Chinese demand forecasts and covid lockdowns. The EIA will report inventories this morning at 9:30 CT. An industry survey yesterday showed an unexpected build of 7.9 million barrels in crude. This provides a wide range for the EIA to post an official number with Reuters estimating a 3.7 million barrel draw.
Crude
- The IEA raised its 2023 oil demand forecast by 100,000 bpd to 101.6 mbpd.
- OPEC+ oil production fell by 500,000 bpd to 44.39 mbpd, according to the IEA.
- The IEA estimates Russian oil output to fall 14% by the end of the first quarter.
- The IEA estimates that Russia earned around 15.8 billion from oil last month, which is the second-lowest level of the year.
- Goldman Sachs cut its 1Q WTI price to $85 and its 2Q WTI price to $89.
- Reuters estimates crude stocks fell by 3.6 million barrels last week.
- An industry survey yesterday afternoon showed crude inventories rose by 7.8 million barrels last week.
- The EIA will report inventories at 9:30 CT.
- The Federal Reserve is expected to increase interest rates by 50 bps today.
- As of 8:14 am CST: Brent crude oil up $1.33 to $82.02, US dollar index down $0.078 to 103.902 while the nearby e-mini S&P 500 futures contract is up 7.25 to 4029.00.
Diesel
- Reuters estimates diesel stocks rose by 2.5 million barrels last week.
- An industry group survey yesterday afternoon showed diesel stocks rose by 3.9 million barrels last week.
- The IEA expects 550,000 bpd of total natural gas to diesel switching-related deliveries in Europe this quarter.
- Chinese air passenger volumes jumped 68% last week to 3.7 million.
Gasoline
- Reuters estimates gasoline stocks rose by 2.7 million barrels last week.
- An industry group survey yesterday afternoon showed gasoline stocks rose by 877,000 barrels last week.
Propane
- Conway is trading at .7375 while Belvieu is trading at .7200.
- Conway is trading at 41% of crude.
- The US is exporting 60% of production as of 12/2/22.
- The EIA is expected to report a 592,000 barrel draw in propane stocks.
Natural Gas
- Total US gas demand rose to 119.1 Bcf/d.
- Total US dry production fell to 97.6 Bcf/d.
- Overnight weather runs removed 1 HDDs through the two-week forecast.
- Reuters estimates natural gas inventories fell between 33-51 Bcf last week.
Continuous Daily ULSD: The prompt diesel contract has made a nice recovery following its bounce off yearly support. Diesel this week is up around 35 cents this week finding support from crude, cold weather, and demand optimism in China.
