Outlook: Energies are mixed to start the day as it waits for fundamental influence from the EIA this morning. An industry survey yesterday revealed another larger-than-expected build for crude, however, also indicated a significantly lower figure than the previous two weekly increases. Reuters is expecting a small uptick in refinery utilization with turnarounds holding levels below 5-year averages. The macros proved to be volatile again yesterday which will likely continue to spill over to energy. After business activity signaled a seventh consecutive monthly contracting, the line between a soft landing and recession appears to be thin. The Fed is widely expected further increase interest rates by 25 bps at their next meeting on February 1st.
Crude
- Iraq has restarted oil production at one of its 100,000 bpd southern facilities.
- Kazakhstan plans to boost its crude oil exports to 150,000 tonnes for January and February according to Reuters.
- US business activity contracted for a seventh straight month in January, according to S&P global market intelligence.
- The 3-2-1 crack spread rose to a three-month high yesterday.
- ARA crude stocks declined 0.2% w/w.
- Reuters is estimating crude inventories rose by 1.0 million barrels last week.
- An industry survey yesterday afternoon showed crude inventories rose by 3.4 million barrels last week, according to sources citing the API.
- The EIA will release official inventory data at 9:30 CT.
- As of 8.20 am CST: Brent crude oil up $0.04 to $86.17, US dollar index up $0.024 to 101.942 while the nearby e-mini S&P 500 futures contract is down 43.25 to 4989.00.
Diesel
- An industry survey yesterday afternoon showed diesel stocks fell by 1.9 million barrels, according to sources citing the API.
- Reuters is estimating diesel inventories fell by 1.1 million barrels last week.
Gasoline
- Reuters is estimating gasoline inventories rose by 1.8 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks rose by 620,000 barrels, according to sources citing the API.
Propane
- Conway is trading at .9000 while Belvieu is trading at .9050.
- Conway is trading at 48% of crude.
- The US is exporting 69% of production as of 1/6/22.
- An OPIS survey suggests propane inventories fell by 2.3 million barrels last week.
Natural Gas
- US natural gas demand fell to 123.6 Bcf/d yesterday.
- US dry production fell to 97.1 Bcf/d yesterday.
- Overnight weather runs removed 6 HDDs through the two-week forecast.
Daily Continuous HO: The prompt diesel contract has retreated off its upper Bollinger band this week after reaching moderately overbought levels. The middle Bollinger band could be a short-term downside target if fundamentals and economics remain bearish this week.
