Outlook: Energies are looking to come up for air after two days of selling. Bullish market drivers have been overshadowed by a gloomy economic outlook following comments from the Fed this week. Relief to that outlook was provided today with Jobless Claims data coming in higher than expected. Unemployment will be closely watched over the next several months as it reacts to elevated interest rates. February nonfarm payroll data will be posted tomorrow morning after coming in sharply higher than expected in the previous month. The French refinery strike could prove to have a growing impact on US exports which could appear in next week’s EIA data. Refined inventories typically decline at this time of year as refinery turnarounds decrease production. A combination of these two events could accelerate draws even if domestic demand lags behind.
Crude
- India’s oil-product consumption in February rose 5% y/r, up the most since November.
- A US pipeline regulator reported that TC Energy has been forced to reduce operating pressure on the Keystone pipeline after the 13,000 bpd spill in December.
- TotalEnergy said there were no deliveries from its French refineries due to strikes today. The strikes have been active since Tuesday.
- The EIA reported a 1.7 million draw for crude stocks last week.
- Last week was the first observed draw in crude stocks in 10 weeks.
- US crude production fell by 100,000 bpd last week to 12.2 mbpd.
- The Initial Jobless Claim came in higher than expected today, which is bearish for the US dollar.
- Nonfarm payrolls will be reported at 7:30 CT tomorrow morning.
- As of 8:26 am CST: Brent crude oil up $0.78 to $83.44, US dollar index down $0.359 to 105.299 while the nearby e-mini S&P 500 futures contract is up 8.25 to 4003.00.
Diesel
- The EIA reported a 138,000 barrel build in diesel stocks for last week.
- Diesel demand fell 8.4% w/w to 3.5 mbpd.
- Northwest Europe’s diesel stocks rose by 800,000 barrels last month, according to Wood Mackenzie.
- The International Air Transport Association reported that air travel demand rose 67% compared to January 2022 and sits at 84.2% of 2019 levels.
Gasoline
- The EIA reported gasoline stocks fell by 1.1 million barrels last week.
- Gasoline demand fell 6% w/w to 8.5 mbpd.
- The RBOB-ULSD spread has narrowed to -4 cents
Propane
- Conway is trading at .7900 while Belvieu is trading at .8450.
- Conway is trading at 43% of crude.
- The US is exporting 57% of production as of 3/3/23.
- The EIA reported propane stocks fell by 537,000 barrels last week.
Natural Gas
- US Natural gas demand fell to 111.3 Bcf yesterday.
- Weekend weather runs removed 2 HDDs through the two-week forecast.
- Industry forecasts are for a draw between 79-87 Bcf for last week.
- The 5-year average draw is 101 Bcf.
Continuous Daily RBOB-ULSD: The gasoline-diesel has worked steadily higher since bottoming out in October. A mild winter and low heating demand for diesel has helped accelerate the spread which looks poised to break 0. Gasoline’s premium to diesel peaked at 16.3 cents last year in May.
