Outlook: The energy market is soft again today with crude and products all trading lower. WTI and RBOB are also testing support levels today which could signal further downside with a close below either mark. There may also be some risk-off in the marketplace with a plethora of economic and fundamental data to be released tomorrow and through the end of the week. The trickle of data out of China and economic sentiment appears to have the most control over market direction. The EIA will report inventory data tomorrow morning while the API will release their survey this afternoon to give us a further estimate. The Fed will announce its rate increases around noon tomorrow and the BoE and ECB will announce their hikes on Thursday.
Crude
- WTI is set for its third consecutive monthly drop.
- A Reuters survey suggests OPEC’s oil output fell by 50,000 bpd in January to 28.87 mbpd. The OPEC 10 produced 24.5 mbpd and around 920,000 bpd below target.
- Exxon Mobil Corp beat profit expectations for the 9th time in 10 quarters with lucrative fuel margins lifting the company with their best annual performance on record.
- The prompt daily continuous WTI contract is testing support of its 50-day moving average near $77.62.
- Reuters estimates crude inventories fell by 1 million barrels last week.
- The API will report their inventory survey today at 3:30 CT.
- As of 8.23 am CST: Brent crude oil down $0.95 to $83.95, US dollar index down $0.062 to 102.214 while the nearby e-mini S&P 500 futures contract is up 7.25 to 4040.00.
Diesel
- Reuters estimates distillate inventories fell by 1.8 million barrels last week.
- Today is the last trade day for the February diesel contract.
- French protests are ongoing and are blocking three oil refineries in a third round of strikes this month.
- China plans to increase diesel and jet fuel exports next month by 4.5% and 21% above January levels, according to Oilchem.
Gasoline
- Reuters estimates gasoline inventories rose by 1 million barrels last week.
- The prompt daily continuous RBOB contract is testing support at its 100-day moving average near $2.4810
- Today is the last trade day for the February gasoline contract.
Propane
- Conway is trading at .9000 while Belvieu is trading at .9100.
- Conway is trading at 48% of crude.
- The US is exporting 68% of production as of 1/13/22.
Natural Gas
- US natural gas demand fell to 130.3 Bcf/d yesterday.
- US dry production rose to 97.5 Bcf/d yesterday.
- Overnight weather runs removed 10 HDDs through the two-week forecast.
India’s Oil Imports: India’s imports of Russian oil hit a record in January and are expected to grow further in February. The country has opted to take advantage of the heavily discounted Russian oil which has been driven down by other countries shunning the product. Imports reached 1.39 mbpd in January and are expected to reach 1.75 mbpd in February, according to Kpler.
