Outlook: The energy complex is quiet to start the morning today but will likely find direction following today’s EIA report. Bullish sentiment from the headline boost over the weekend has run out of fuel but the markets have resisted any selling in retaliation so far. The economic reports released this week will continue to draw attention as the threat for economic downturn is the leading bearish driver. Nonfarm payrolls will be the final report to end the week on Friday which could propel markets next week since energies will be closed on Friday due to the holiday. Trade expectations for today’s EIA report are relatively bullish with draws anticipated across the board. Demand data may have the ability to steal the spotlight, however, especially is diesel demand comes in soft once again. Declining diesel demand can be an indicator of economic slowdown, which is already performing well below 5-year averages.
- India’s refiner throughout is near record levels, up 2% y/y in February at 5.46 mbpd.
- North Sea oil workers are expected to start a strike today that is planned to last 48 hours.
- JOLTS employment data came in at its lowest level in two years yesterday.
- March ADP employment came in lower than expected at 145k vs 200k est.
- ISM services PMI will be reported at 9:00 CT.
- Reuters estimates crude stocks fell by 2.3 million barrels last week.
- An industry survey yesterday afternoon showed crude stocks fell by 4.3 million barrels, according to sources citing the API.
- The EIA will report inventories at 9:30 CT.
- As of 8:12 am CST: Brent crude oil down $0.07 to $84.87, US dollar index down $0.066 to 101.520 while the nearby e-mini S&P 500 futures contract is down 8.25 to 4120.00.
- Reuters estimates diesel stocks fell by 400,000 barrels last week.
- An industry survey yesterday afternoon showed diesel stocks fell by 3.7 million barrels, according to sources citing the API.
- Reuters estimates gasoline inventories fell by 1.7 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 4 million barrels, according to sources citing the API.
- Conway is trading at .8150 while Belvieu is trading at .8375.
- Conway is trading at 42% of crude.
- The US is exporting 76% of production as of 3/24/23.
- OPIS estimates propane inventories fell by 900,000 barrels last week.
- Overnight weather runs were unchanged through the two-week forecast.
- Yesterday, US natural gas demand fell to 98.3 Bcf/d.
- Three LNG terminals that have been blocked since March, plan to resume operations this week.
US Dollar Index: The US dollar was pushed lower yesterday after weaker-than-expected employment data. The Labor market has so far been resilient to economic tightening which has garnered additional attention to the downward move. The recent low set in February will be the next downside target and support if the trend continues.