Outlook: The energy complex is looking for direction again this morning following the slow start trend we’ve seen this week. Ultimately, a critical Fed rate decision due today has kept the market at bay with traders unwilling to take a firm stance. It’s unclear how the market will digest todays rate decision with a lot of financial uncertainty still looming. On the supply side, additional OPEC delegates said the group will maintain its current output cut. The group has expressed that the financially driven selloff doesn’t reflect the current supply and demand dynamic. Russia has also said they are cutting production with the 500,000 bpd cut expected to continue through June. Until the data reflects that cut, the market will continue to trade that lightly. The EIA will report inventories mid-morning, industry sources are mixed in their crude projections but are seeing draws for products.
Crude
- Three OPEC+ delegates told Reuters that OPEC+ is likely to stick to its deal to cut output by 2 million bpd until the end of the year.
- Russia’s Deputy Prime Minister said they will continue to maintain their 500,000 bpd crude production cut through June.
- According to India’s oil Ministry, February crude imports in February rose 8.5% y/y.
- European crude storage rose by 2.1% w/w
- The Fed will announce its rate decision today at 1:00 CT.
- The Fed is expected to raise interest rates by 25 bps.
- Reuters estimates crude stocks fell by 1.6 million barrels last week.
- An Industry survey yesterday afternoon showed crude stocks rose by 3.3 million barrels last week, according to sources citing the API.
- The EIA will report inventories at 9:30 CT.
- As of 8:04 am CST: Brent crude oil down $0.08 to $75.24, US dollar index down $0.121 to 103.135 while the nearby e-mini S&P 500 futures contract is up 1.25 to 4037.00.
Diesel
- Reuters estimates diesel stocks fell by 1.5 million barrels last week.
- An industry survey yesterday afternoon showed diesel stocks fell by 1.8 million barrels last week, according to sources citing the API.
- European demand may be stimulating diesel prices with the strikes in France ongoing.
Gasoline
- Reuters estimates gasoline stocks fell by 1.7 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 1.1 million barrels last week, according to sources citing the API.
Propane
- Conway is trading at .7200 while Belvieu is trading at .7400.
- Conway is trading at 43% of crude.
- The US is exporting 72% of production as of 3/10/23.
- OPIS estimates propane stocks fell by 384,000 barrels last week.
Natural Gas
- Overnight weather runs removed 2 HDDs from the two-week forecast.
- Yesterday, US natural gas demand fell to 102.1 Bcf/d.
- Freeport LNG has reported multiple issues related to restart attempts this week.
Continuous Daily HO: The prompt diesel contract is showing separation from the rest of the complex today. While the macros may overpower a technical trend change, diesel will look to close above its 9-day moving average (orange line) and signal further upside.
