Outlook: Energies are finding strength again today with crude and gasoline trading higher, while diesel lags behind. The market is finding support from Iraq halted 450,000 bpd of crude flows through the Turkish port of Ceyhan this week. Supply disruptions may become more sensitive as the year progresses with the current oil supply surplus expected to diminish. Additional support is coming from the US stating that they still intend to begin refilling the SPR this year. This comes after comments last week saying that refilling could take multiple years. Disruption in the banking industry has been relatively quiet this week, dampening some of the financial uncertainty that has been a bearish driver for energy. The EIA will release inventory data this morning, industry consensus is for draws across the board.
Crude
- Late yesterday, Energy Secretary Granholm said the US will begin to purchase oil to refill the SPR this year.
- China National Petroleum forecast a 6.2% increase in crude imports for 2023.
- Roughly 450,000 bpd of oil flows have been halted at Turkey’s Ceyhan export terminal with Iraq pausing throughput.
- First Citizens BancShares acquired SVB, taming some of the banking industry stress.
- An industry survey yesterday afternoon showed crude stocks fell by 6.1 million barrels last week, according to sources citing the API
- Reuters estimates crude stocks fell by 100,000 barrels last week.
- The EIA will report its inventory survey today at 9:30 CT.
- March consumer confidence came in higher than expected yesterday at 103.4.
- As of 8:09 am CST: Brent crude oil up $0.89 to $79.54, US dollar index up $0.141 to 102.571 while the nearby e-mini S&P 500 futures contract is up 36.25 to 4038.00.
Diesel
- Reuters estimates diesel stocks fell by 1.6 million barrels last week
- An industry survey yesterday afternoon showed diesel stocks fell by 500,000 barrels last week, according to sources citing the API.
- There are reports that Saudi Aramco has agreed to build a refinery in China.
Gasoline
- Reuters estimates gasoline stocks fell by 1.6 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 5.9 million barrels, according to sources citing the API.
Propane
- Conway is trading at .7650 while Belvieu is trading at .8025.
- Conway is trading at 44% of crude.
- The US is exporting 75% of production as of 3/17/23.
- OPIS estimates propane stocks fell by 1 million barrels last week.
Natural Gas
- Overnight weather runs added 7 TDDs through the two-week forecast.
- Yesterday, US natural gas demand rose to 110.1 Bcf/d.
- Prompt natural gas has traded below $2 but has not managed a close below the mark since September of 2020.
Continuous Daily WTI: The prompt crude contract has made a healthy recovery since reaching a new recent low near $64 a week ago. Crude and energies in general are finding support from easing banking stress fears, potential SPR purchases, and disrupted flows in Turkey.
