Outlook: Energies are mixed to start the morning session after a 6-day rally came to a halt yesterday. A reversal off the lows for the US dollar yesterday due to bearish US economic data put pressure on commodities. Profit-taking is likely spilling over into today as longs choose to cash in on their streak. Ultimately the narrative that has driven energies higher over the past two weeks has not changed. China is expected to see a strong uptick in travel through the end of the month and a contracting economy could persuade the Fed the pivot to a more dovish path. Russia has said their crude production has remained steady since sanctions have targeted oil, however, they will face another round of sanctions targeting refined products to kick off February. A heavy maintenance schedule for US refiners is also expected this spring with roughly 1.4 million bpd of refining capacity expected to be offline in spurts through May. EIA data is due to report this morning, which may show refinery turnarounds were pushed up and are already underway following weather-related shutdowns.
Crude
- Russian oil output this month has remained steady in relation to December levels, according to Deputy Prime Minister Alexander Novak.
- Saudi Arabia’s crude oil exports fell to a 5-month low in November to 7.28 mbpd, according to the IEF.
- At least 15 US oil refineries plan maintenance ranging from 2 to 11 weeks through may, according to Reuters and IIR Energy.
- Reuters estimates crude stocks fell 0.6 million barrels last week.
- An industry survey yesterday afternoon showed crude stocks rose by about 7.6 million barrels, according to sources citing the API.
- The February WTI contract will expire this Friday.
- US December retail sales fell by the most in a year, while manufacturing output recorded its biggest drop in nearly two years.
- The EIA will report inventories at 10:00 CT.
- As of 8.37 am CST: Brent crude oil up $0.54 to $85.52, US dollar index down $0.202 to 102.161 while the nearby e-mini S&P 500 futures contract is down 19.25 to 3926.00.
Diesel
- Reuters estimates diesel stocks rose 100,000 barrels last week.
- An industry survey yesterday afternoon showed diesel stocks fell by around 1.8 million barrels, according to sources citing the API.
Gasoline
- Reuters estimates gasoline stocks rose by 2.5 million barrels last week.
- An Industry survey yesterday showed gasoline stocks rose by around 2.8 million barrels, according to sources citing the API.
Propane
- Conway is trading at .8850 while Belvieu is trading at .8975.
- Conway is trading at 47% of crude.
- The US is exporting 69% of production as of 1/6/22.
- The EIA is expected to report around a 2.2 million barrel draw according to an OPIS survey.
Natural Gas
- Natural Gas remains focused on the mild winter and no official restart notice from Freeport LNG.
- The EIA is expected to report a draw between 65-81 Bcf for last week.
Weekly Continuous NG: Prompt natural gas continues to tumble and has fallen to its lowest level since June 2021. A slight shift towards a colder weather forecast has provided brief support, but the overall mild winter is dominating the trend.
