The energy markets will be closed tomorrow in observance of Good Friday. The market will resume trade Sunday night at 5:00pm CT.
Outlook: Energies are mixed this morning with upward momentum stalling out. Products managed to find strength yesterday with a bullish EIA report while crude has hugged tight to $80 since it’s jump higher on Monday. Demand data came in strong yesterday with diesel demand returning back to year-ago levels and gas demand surpassing year-ago levels. Demand in Asia has remained steady which has continued to attract imports of US crude. Saudi Aramco raised its selling price for a third consecutive month in response to increasing Asian demand. The move can be seen as contradicting their 500,000 bpd production cut that will go into effect in May. With a shortened trading week, selling could enter the market in a risk-off play ahead of the long weekend. The volatile Nonfarm payroll report on Friday could set the tone for next week with markets closed tomorrow.
Crude
- China’s imports of Iranian crude jumped 20% m/m in March to 800,000 bpd.
- Saudi Aramco raised its selling price for Arab Light crude to Asia by 30 cents, marking its third consecutive monthly increase according to Bloomberg.
- Iranian oil for May arrival is being sold at around a $12 discount to Brent, while Russian Urals are being offered for $10 below Brent.
- The EIA reported US crude stocks fell by 3.7 mbpd last week.
- US crude exports rose by 655,000 bpd to 5.2 mbpd, which is the second-highest level this year.
- US crude shipments to Singapore jumped 43% in February while direct shipments to China rose 23% m/m, according to Bloomberg data.
- Baker Hughes reported global oil and natural gas rigs fell by 42 in March to 1,879.
- WTI aggregated open interest rose to the highest level in over a year.
- March Nonfarm Payroll data will be reported tomorrow morning.
- As of 8:06 am CST: Brent crude oil up $0.03 to $85.02, US dollar index up $0.207 to 102.059 while the nearby e-mini S&P 500 futures contract is down 8.25 to 4109.00.
Diesel
- The EIA reported diesel stocks fell by 3.6 million barrels last week.
- US diesel demand rose by 14.2% last week to 4.2 mbpd.
- Average 4-week diesel demand is 0.05% below year-ago levels.
Gasoline
- The EIA reported gasoline stocks fell by 4.1 million barrels last week.
- US gasoline demand rose by 1.6% to 9.3 mbpd.
- Average 4-week gasoline demand is up 3.9% above year-ago levels.
- Nearby gasoline futures have risen to their highest level since October with a high of $2.8428 this morning.
Propane
- Conway is trading at .8125 while Belvieu is trading at .8300.
- Conway is trading at 42% of crude.
- The US is exporting 54% of production as of 3/31/23.
- The EIA reported a smaller-than-expected draw of 535,000 barrels.
- Inventories remain 62% above year-ago levels and 26% above the 5-year average.
Natural Gas
- Overnight weather runs added 2 TDDs through the two-week forecast.
- Yesterday, US natural gas demand fell to 99.7 Bcf/d.
- The EIA is expected to report a 24 Bcf draw for last week.
Russian Oil Revenue: Russia’s oil and gas revenue fell to over half of last year’s levels for March. Sanctions and price caps have pressured the price of Russian energy relative to global benchmarks and revenue has declined as a result. Prices have naturally declined during this time period which has also contributed to the decline.
