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.
Crude
- 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.
Diesel
- 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.
Gasoline
- 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.
Propane
- 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.
Natural Gas
- 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.
