Outlook: The rally in energy is set to continue today after a late rally into the close yesterday kept the streak of gains alive. WTI and RBOB have both pushed higher for 6 consecutive sessions and will look to extend that with both observing gains this morning. The IEA and OPEC both released their monthly reports this week. OPEC left its 2023 demand outlook unchanged at 101.8 mbpd while the IEA increased its 2023 forecast by 200,000 bpd. Both groups have cited Chinese demand optimism for their recent demand revisions. Outside markets may be provided support to energy today with the dollar down over 700 ticks. December Producer Price Index data came in under expectations today and pressured the dollar to near 8-month lows. An accelerated path lower for inflation could influence the Fed to pivot to a more dovish path for economic tightening.
Crude
- The IEA increased its global oil demand growth forecast by 200,000 bpd to 1.9 mbpd.
- The IEA said China will account for half of 2023 oil demand growth in its monthly report.
- The IEA estimates Russian oil exports fell 200,000 bpd in December to 7.8 mbpd.
- China exported 32.8% more diesel in December over November according to Reuters.
- Wood Mackenzie estimates Asia’s crude processing could rise 4.7% in 2023.
- Reuters estimates crude stocks fell 1.8 million barrels last week.
- Iran cut its Feb 2023 crude oil prices to Asia by $1.35 from the previous two months.
- The API will report their inventory survey this afternoon at 3:30 CT.
- WTI has closed higher for 6 consecutive sessions.
- The February WTI contract will expire this Friday.
- As of 8.32 am CST: Brent crude oil up $1.42 to $87.34, US dollar index down $0.812 to 101.578 while the nearby e-mini S&P 500 futures contract is up 11.25 to 4020.00.
Diesel
- Reuters estimates diesel stocks fell 500,000 barrels last week.
- Wood Mackenzie estimates Asia’s 2023 diesel supply could rise nearly 3% y/y.
Gasoline
- Reuters estimates gasoline stocks rose by 2.3 million barrels last week.
- Prompt RBOB has closed higher for 6 consecutive sessions.
Propane
- Conway is trading at .8500 while Belvieu is trading at .8600.
- Conway is trading at 45% of crude.
- The US is exporting 69% of production as of 1/6/22.
Natural Gas
- US natural gas demand rose to 111.7 Bcf/d yesterday.
- US dry production fell to 97.8 Bcf/d yesterday.
- Overnight weather runs removed 6 HDDs through the two-week forecast.
Daily Continuous WTI: After six consecutive sessions holding gains and a close above its 50-day moving average (blue line) WTI is targeting its next nearby moving average resistance. The 100-day moving average (purple line) is the next resistance target, while a close above this level could allow for a push to $85.
