Outlook: Energies are starting 2023 lower across the board with diesel and natural gas leading the complex lower. WTI started the overnight session higher touching $81.50 before bearish headlines took control. China is looking to ramp up exports again this month as they look to stimulate their economy. The financial effects of Covid-Zero were again seen last month with manufacturing data dipping near 3-year lows. Mobility data has reflected signs of recovery last week which raises the speculation that the worst could be in the rear-view mirror. The US dollar is seeing significant strength today up nearly 1000 ticks. Additional macro influence will be provided tomorrow with ISM December Manufacturing PMI and the FOMC meeting.
- China raised its export quota to start 2023 and will look to export 46% more petroleum product than the year prior.
- Chinese December manufacturing activity shrank to near a 3-year low.
- Russian crude shipments slid to the lowest level for 2022 in the final four weeks of the year.
- Bloomberg data shows global crude in floating storage rose by 11% w/w.
- Bloomberg’s tanker tracking data shows Kuwait’s crude exports slumped to the lowest level since October 2021.
- Baker Hughes reported oil rigs declined by 1 to 621 last week.
- Inventory data and estimates will be released a day late due to the Monday holiday.
- The API will report their survey tomorrow at 3:30 CT.
- As of 8.22 am CST: Brent crude oil down $1.48 to $84.43, US dollar index up $0.939 to 104.461 while the nearby e-mini S&P 500 futures contract is down 25.25 to 3886.00.
- The COT report showed managed money traders are net long 20,147 contracts after net buying 626 contracts.
- The EU’s ban on Russian oil products will go into effect on February 5th.
- The COT report showed managed money traders are net long 50,899 contracts after net buying 704 contracts.
- Bloomberg mobility data shows Chinese road traffic increased by 32% last week to 86.7% of January 2021 levels.
- Conway is trading at .7850 while Belvieu is trading at .7750.
- Conway is trading at 41% of crude.
- The US is exporting 52% of production as of 12/23/22.
- Total US gas demand fell to 101.6 Bcf/d.
- Total US dry production rose to 95.3 Bcf/d.
- Overnight weather runs removed 15 HDDs through the two-week forecast.
- Baker Hughes reported natural gas rigs rose by 1 to 156 last week.
Russian Exports: Russian crude shipments fell by 117,000 bpd to 2.6 mbpd on a four-week average basis, which marks the lowest level for 2022. The decline in flows can be attributed to sanctions targeting exports and a significant winter storm that disrupted flows from the Black Sea and Pacific ports last month.