Outlook: Energies are sliding lower today with crude and products all observing losses. Headlines have shifted to a bearish tone this week, starting with the US announcing an additional release of 26 million barrels from the SPR. There were talks of canceling this previously mandated release, however, the decision was made to move forward. US CPI, a metric for inflation, came in higher-than-expected y/y at 6.4%. The consideration for a dovish pivot by the fed has become less likely with inflation remaining resilient. Fundamentals are also leaning bearish with the early Reuters poll suggesting builds across the board for last week's inventories. The API will release its survey this afternoon at 3:30 CT to give further insight.
Crude
- The US Department of Energy said it would sell 26 million barrels of oil from the SPR to be delivered from April 1st to June 30th.
- OPEC released its monthly report today and reported its crude output in January fell by 49,000 bpd to 28.88 mbpd.
- OPEC lifted its 2023 global oil demand forecast by 100,000 bpd to 2.32 mbpd.
- The EIA estimates crude oil production in the seven biggest shale basins will rise to its highest level on record in March.
- Crude exports have resumed at Turkey’s Ceyhan oil terminal.
- The IEA will release its monthly report tomorrow.
- Reuters estimates crude stocks rose by 300,000 barrels last week.
- The API will report its inventory survey today at 3:30 CT.
- US January Consumer Price Index increased by 6.4% y/y vs 6.2% est.
- As of 8:20 am CST: Brent crude oil down $1.51 to $85.10, US dollar index down $0.216 to 103.129 while the nearby e-mini S&P 500 futures contract is down 13.25 to 4134.00.
Diesel
- Reuters estimates diesel stocks rose by 400,000 barrels last week.
- Russian gasoil shipments to the Middle East and Asia have risen to the highest level in six months after the EU’s seaborne import ban.
Gasoline
- Reuters estimates gasoline stocks rose by 2 million barrels last week.
- EU lawmakers have approved a ban on new fossil fuel cars by 2035.
Propane
- Conway is trading at .7975 while Belvieu is trading at .8375.
- Conway is trading at 42% of crude.
- The US is exporting 59% of production as of 2/3/23.
Natural Gas
- US natural gas demand rose to 110.2 Bcf/d yesterday.
- Overnight weather runs added 5 HDDs through the two-week forecast.
- Yesterday, Freeport LNG submitted a request to FERC to authorize a phase 1 restart.
Continuous Daily Diesel Crack: The prompt diesel crack is finding strength after bouncing off support near $40.00 Diesel may be finding strength following embargo and price cap implementation with reports that Russian diesel prices aren’t as easily finding a home. This driver could coincide with seasonal declines in US inventories due to refinery maintenance and provide additional support.
