Outlook: Energies are mixed to start the shortened trade week. Headlines remain relatively quiet; however, China did announce that they will no longer require inbound travelers to quarantine. China has continued to reduce covid measures despite elevated cases which have helped maintain a bullish outlook. US refiners are beginning restarts after a winter storm shut in roughly 1.5 million bpd of refining capacity. It could be over two weeks before full operation returns and we’ll likely see the real effect over the next several EIA reports. This week’s EIA stats will be released on Thursday at 10:00 am CT due to the holiday.
Crude
- China will stop requiring inbound travelers to go into quarantine after January 8th, according to the National Health Commission.
- OPIS estimates 12 refineries, and 1.5 million bpd of refining capacity was shut in due to weather over the weekend.
- Motiva’s 626,000 Port Arthur refinery has begun its restart but could take up to 16 days before hitting full capacity.
- China’s November refinery throughput was 0.3% above year-ago levels.
- Due to the holiday, inventory reports will be reported 1 day later this week.
- Baker Hughes reported rig counts rose by 2 last week to 622.
- Prompt WTI has hit a three-week high to start the week.
- As of 8:36 am CST: Brent crude oil up $0.30 to $84.22, US dollar index up $0.033 to 104.347 while the nearby e-mini S&P 500 futures contract is down 18.25 to 3851.00.
Diesel
- January diesel is trading at its highest level since December 1st.
- China’s November diesel production was 16.4% higher than last year’s levels.
Gasoline
- January RBOB is trading at its highest level since December 1st.
- Pump prices are 20 cents below year-ago levels according to AAA data.
- China’s November gasoline production was 12.2% below last year’s levels.
Propane
- Conway is trading at .7600 while Belvieu is trading at .7275.
- Conway is trading at 40% of crude.
- The US is exporting 57% of production as of 12/9/22.
Natural Gas
- Total US gas demand fell to 136.4 Bcf/d.
- Total US dry production fell to 84.1 Bcf/d.
- Overnight weather runs added 4 HDDs through the two-week forecast.
- Production over the weekend fell to a low of 82.7 Bcf/d due to the winter storm.
- Baker Hughes reported natural gas rigs rose by 1 to 155 last week.
Continuous Daily HO: January diesel may look to test its monthly high heading into expiration this week. Diesel traded to a high of $3.4103 on December 1st before selling off to a low of $2.7647.
