Outlook: Energies are pushing higher to start the morning with crude and products up around 1%. Continued disruption in Turkey due to the earthquake provided some bullish pressure today, however, flows are expected to resume today. Disruptions may be providing less price pressure to start the year with the IEA expecting an oil surplus in the first half of the year if OPEC+ doesn’t provide further cuts. On the demand side, Saudi Aramco increased its oil prices to Asian customers while the market was expecting a price drop. Strong Asian demand is expected to support oil prices in the first half of 2023. The EIA will release its monthly Short-Term Energy Outlook today. This is a good resource for current and forward-looking data and is free to access on the EIA’s website.
Crude
- Iraq hopes to resume pumping oil through Turkey today after flows were disrupted due to an earthquake.
- Top Russian oil and gas executives attended India’s energy summit this week with India’s purchase of Russian oil on the rise.
- Saudi Aramco unexpectedly raised its oil prices for next month by 20 cents a barrel to its Asian customers, which can be seen as optimistic for demand.
- US crude exports were at 3.85 mbpd in December vs 4.04 mbpd in November, according to the US Census Bureau.
- WTI’s prompt spread fell to its weakest levels since June, with a low of -36 cents today.
- WTI open interest rose to its highest level since June on Monday.
- Reuters estimates crude inventories rose by 2.2 million barrels last week.
- The API will release its inventory survey at 3:30 CT.
- The EIA will release its monthly short-term energy outlook today at 12:00 CT.
- President Biden will deliver his State of the Union address today.
- As of 8:25 am CST: Brent crude oil up $0.78 to $81.77, US dollar index up $0.162 to 103.783 while the nearby e-mini S&P 500 futures contract is down 9.25 to 4113.00.
Diesel
- Reuters estimates diesel inventories fell by 500,000 barrels last week.
- TotalEnergies SE is being forced to cut production at its French oil refinery for 48 hours due to strikes, according to the CGT union
Gasoline
- Reuters estimates gasoline inventories rose 1.4 million barrels last week.
- Continuous daily RBOB closed above its 50-day moving average yesterday after a brief dip below the mark.
Propane
- Conway is trading at .7625 while Belvieu is trading at .8050.
- Conway is trading at 43% of crude.
- The US is exporting 59% of production as of 1/27/22.
Natural Gas
- US natural gas demand increased to 115.4 Bcf/d yesterday.
- US dry production fell to 94.6 Bcf/d yesterday.
- Overnight weather runs added 3 HDD’s through the two-week forecast.
- Freeport LNG is on track to stop receiving natural gas today after 12 days of receiving small amounts for maintenance.
- Many analysts predict the plant won’t begin shipping LNG again until March, despite the progress over the last month.
Jet Fuel Demand: Aviation activity in both the US and Europe has looked strong to start the year. Eurocontrol still lags behind 2019 levels at 85% but sits 25% higher than this time last year. The US has seen TSA passenger throughput exceed 2019 levels with expectations for further growth in February.
