Outlook: The story remains consistent and energies are pushing below technical support levels today. Credit Suisse has hit a trading halt this morning as their largest investor said they can’t offer financial support. A bank of this size on pace for closure is sending ripples through the market with equities surging lower while the dollar moves sharply higher. The macro headwinds have all but extinguished the bullish sentiment established by China or the fact that OPEC is still unable to produce to their target levels. Both OPEC and the IEA expect significant demand growth from China in the second half of the year which will something to keep in mind despite what we might see near-term. Downward momentum is likely to continue unless the Fed makes a significant pivot during its meetings next week. Anticipation is for a 25 bps hike, however, that may shift to no hike if the current sentiment continues this week. The EIA will report inventories at 9:30 CT this morning. If numbers are confirmed similar to the API’s estimates, the market may find minor relief.
Crude
- Credit Suisse’s largest investor said it can’t provide the bank with additional financial assistance, bringing greater threat for another bank to be shut down.
- Equities are off sharply today with fresh economic headwinds and a strong US dollar.
- The IEA said Russia’s oil exports fell by more than 500,000 bpd to 7.5 mbpd in Feb.
- The IEA says Russia’s oil export revenues in Feb fell 2.7 billion to 11.6 billion or nearly half of pre-war levels.
- The IEA projects global oil demand will rise by 2 mbpd to 102 mbpd in 2023.
- OPEC+ produced 38.8 mbpd of oil in Feb which is 1.72 mbpd below target, according to the IEA.
- China’s economic activity picked up for the first two months of 2023. Industrial output was up 2.4% while retail sales were up 3.5%.
- An industry survey yesterday afternoon showed crude stocks rose by 1.15 million barrels, according to sources citing the API.
- The EIA will report inventories at 9:30 CT.
- As of 7:54 am CST: Brent crude oil down $1.69 to $75.76, US dollar index up $1.110 to 104.715 while the nearby e-mini S&P 500 futures contract is down 75.25 to 3845.00.
Diesel
- Reuters estimates distillate stocks fell by 1.2 million barrels last week.
- An industry survey yesterday afternoon showed distillate stocks fell by 2.8 million barrels last week, according to sources citing the API.
Gasoline
- Reuters estimates gasoline stocks fell by 2.2 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 4.5 million barrels last week, according to sources citing the API.
Propane
- Conway is trading at .7275 while Belvieu is trading at .7800.
- Conway is trading at 42% of crude.
- The US is exporting 57% of production as of 3/3/23.
- OPIS estimates crude stocks fell by 1 million barrels last week.
Natural Gas
- US Natural gas demand rose to 115.3 Bcf yesterday.
- Weekend weather runs were unchanged through the two-week forecast.
- The end of March is expected to be colder than the 10-year average which may continue to support the market.
Continuous Daily WTI: Energies are under pressure from the macros this week and the prompt WTI contract is testing $70 support. Recessionary concerns are growing as more banks come under pressure and the risk of demand loss is bearish for energies.
