Outlook: Energies and the broader markets are all off to a slow start today. This could stick around throughout the session with no major economic or energy-related reports today. A lack of fresh headlines has been the story as of late leaving the market to trade the trickle of information from China and occasionally Russian export data. The momentum has been carrying energies higher with Chinese demand anticipation but appears to have exhausted today. Tomorrow EIA report could garner more attention with increasing refining turnarounds increasing crude stocks while decreasing product output. There is also another smaller winter storm impacting portions of Texas that could cause turbulence if it causes more outages. The API will release its inventory survey this afternoon to give us an idea of what inventories may have done last week.
Crude
- OPEC+ looks increasingly likely to keep output levels unchanged for their upcoming meeting on February 1st, according to Eurasia Group analysts led by Raad Alkadiri.
- Russian Urals and KEBCO crude oil exports from the Baltic are set to rise by around 50% this month from December, according to Reuters calculations.
- Around 70% of Russia’s January oil cargoes are heading to India, according to Reuters.
- The US said they will push China harder to stop importing crude from Iran.
- Goldman Sachs predicts WTI will average $92 in 2023.
- The daily continuous WTI contract failed to close above its 100-day moving average yesterday.
- Reuters is estimating crude inventories rose by 1.6 million barrels last week.
- The API will report their inventory survey at 3:30 CT.
- As of 8.11 am CST: Brent crude oil up $0.12 to $88.31, US dollar index up $0.004 to 102.142 while the nearby e-mini S&P 500 futures contract is down 22.25 to 4012.00.
Diesel
- Phillips 66 Bayway 258kbpd refinery will begin turnaround on Feb 1. The refinery is the northernmost US refinery and the closest to the NY Harbor fuel market.
- Total January diesel imports into New York are estimated at 115,000 bpd, compared to 31,000 bpd in December, according to Kpler.
- Reuters is estimating diesel inventories fell by 1.6 million barrels last week.
- Reuters is estimating gasoline inventories rose by 2.1 million barrels last week.
- Lower refinery utilization will continue to help offset below-average gasoline demand.
Propane
- Conway is trading at .8950 while Belvieu is trading at .9000.
- Conway is trading at 46% of crude.
- The US is exporting 69% of production as of 1/6/22.
Natural Gas
- US natural gas demand fell to 121.9 Bcf/d yesterday.
- US dry production increased to 98.0 Bcf/d yesterday.
- Overnight weather runs added 7 HDDs through the two-week forecast.
- Freeport LNG said on Monday it had completed repairs and asked US regulators for permission to take early steps to restart the facility.
Daily Continuous WTI: Nearby WTI rejected its 100-day moving average (purple line) yesterday after closing below the market at $81.62. A lack of fresh headlines has allowed crude to stall out today, however fresh fundamentals and more economic data are on the slate for the rest of the week. Also worth noting is that the 200-day moving average (red line) falls in line with Goldman Sach’s 2023 average WTI price, and could be a convincing midterm target.
