Outlook: Energies are looking to break out of the slide we’ve seen over the last several sessions today. The market this year has seen aggressive volatility which has taken a toll on traders. While WTI traded over $130 back in March, it will look to settle in just a few dollars higher than where it started the year. Diesel futures have seen the most significant yearly gain and are trading roughly a dollar higher than year-ago levels. Volatility is expected to remain elevated in 2023 with financial tightening and global recessions looming. Trade today will remain thin ahead of the long holiday weekend and could cause some sporadic trade.
Crude
- Yesterday the Keystone Pipeline resumed full operation after a spill caused disruption for over three weeks. The pipeline carries over 600,000 bpd of crude from Canada to the US.
- Japanese insurance companies have indicated they will continue to underwrite Russian oil tanker shipments.
- A bearish Chinese demand narrative will continue to limit upside moves.
- Oil is on track for a yearly gain after starting the year at $75.69.
- US net oil imports rose by 2.79 mbpd.
- The US SPR fell by 3.5 million barrels last week to 375.1 million barrels.
- The EIA reported crude inventories rose by 700,000 barrels last week.
- As of 9:07 am CST: Brent crude oil up $1.24 to $84.70, US dollar index down $0.231 to 103.605 while the nearby e-mini S&P 500 futures contract is down 37.25 to 3834.00.
Diesel
- The EIA reported diesel inventories rose by 300,000 barrels last week.
- Diesel inventories remain 15 million barrels below the 5-year average.
- Average total distillate demand over the past four weeks is down 6.9% compared to last year.
- Today is the last trade day for the January contract.
Gasoline
- The EIA reported gasoline inventories fell by 3.1 million barrels last week.
- Gasoline inventories remain 11.9 million barrels below the 5-year average.
- Average total gasoline demand over the past four weeks is down 6.7% compared to last year.
- Today is the last trade day for the January contract.
Propane
- Conway is trading at .7750 while Belvieu is trading at .7400.
- Conway is trading at 40% of crude.
- The US is exporting 57% of production as of 12/9/22.
- OPIS estimates propane stocks fell by 2.77 million barrels last week.
Natural Gas
- Total US gas demand fell to 108.8 Bcf/d.
- Total US dry production rose to 91.6 Bcf/d.
- Overnight weather runs added 5 HDDs through the two-week forecast.
- The EIA reported a 213 Bcf withdrawal for last week.
- The five-year average withdrawal for this week is 108 Bcf.
Continuous Daily RBOB: RBOB is looking to test its 50-day moving average for the first time since November with the January contract slated to come off the board today. RBOB saw a pretty bullish fundamental report yesterday with a strong uptick in demand and a 3.1 million barrel decline in inventories.
