Outlook: Energies are mixed again today with headlines remaining relatively tame ahead of another long holiday weekend. Russia made the official decree to eliminate exports to countries participating in the price cap yesterday, which was widely expected. Even amidst thin trade, the headline didn’t spur a significant market move outside of the recent volatile norm. Mixed data out of China continues to tug the market in both directions. Bloomberg mobility data suggests demand is being impacted by the current covid wave despite some of the transitions away from Covid-Zero policies. With crude approaching various resistance levels, profit-taking could provide downward pressure ahead of the new year to end the week. Trade remains thin this week and the market will remain susceptible to volatile swings given an unexpected headline.
Crude
- President Putin signed a decree yesterday stating they will not sell oil to countries participating in the oil price cap starting February 1st.
- Motiva Port Arthur refinery expects startup activities to last through January 11th before resuming full operation.
- China continues to see rising covid cases which is putting significant pressure on their health systems. Funeral home death reporting has come in significantly higher than official data.
- ARA crude stocks fell 7.6% week-over-week.
- The US SPR fell by 3.5 million barrels last week to 375.1 million barrels.
- Reuters estimates crude stocks fell by 1.6 million barrels last week.
- The API will report their inventory survey today at 3:30 CT.
- As of 8:13 am CST: Brent crude oil down $0.20 to $84.13, US dollar index down $0.094 to 104.085 while the nearby e-mini S&P 500 futures contract is up 3.25 to 3858.00.
Diesel
- Reuters estimates diesel stocks fell by 2.1 million barrels last week.
- Diesel could see selling pressure with warmer weather revisions developing in the two-week forecast.
Gasoline
- Reuters estimates gasoline inventories rose by 100,000 barrels last week.
- Bloomberg mobility data out of China continues to decline with case counts and deaths expected to be increasing.
Propane
- Conway is trading at .7625 while Belvieu is trading at .7050.
- 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 134.5 Bcf/d.
- Total US dry production fell to 82.0 Bcf/d.
- Overnight weather runs removed 1 HDD through the two-week forecast.
Continuous Daily WTI: The continuous prompt crude contract traded near its 50-day moving average yesterday with a high of $81.18. It’s also worth noting that the market has not managed to close above $80 despite testing it over the last three sessions and will still act as resistance. Profit-taking ahead of the New Year could limit the upside to end the week.
