Outlook: Energies look to be relatively undecided on market direction for the week with crude and products pulling back from yesterday’s gains. A lack of fresh market news has allowed speculative traders to reenter the market on technical buy signals. The global fundamentals remain unchanged with Chinese demand optimism being offset by steady Russian oil flows. Refinery margins have continued to dwindle on a global scale with higher crude and feed costs pressuring crack spreads. Capacity expansions are also on the horizon with Exxon Mobil’s Texas refinery ramping up to full production in the next few weeks. US inventories for crude and products are expected to have fallen last week while the US SPR fell by 1.1 million barrels. The API will report its survey this afternoon and the EIA will confirm data tomorrow morning.
Crude
- China is purchasing 265,000 bpd of Russian Urals so far in April, a 36% increase from March.
- The United States Oil Fund, which is one of the biggest oil exchange-trade funds, pulled in the most cash so far this year. This can be seen as an optimistic move for crude prices.
- No progress has been made for Iraq’s northern oil exports through the Turkish Ceyhan terminal.
- ESAI Energy expects US crude export capacity to reach 10.7 mbpd in 2026, up from 7.5 mbpd currently. Export growth is expected at just 650,000 bpd for 2026 despite higher capacity.
- Crude in floating storage fell by 4% last week, according to Vortexa.
- The Fed, BOE and ECB are all expected to raise interest rates at their upcoming meetings.
- The US SPR fell by 1.1 million barrels last week.
- Reuters estimates crude stocks fell by 1.7 million barrels last week.
- The API will report its inventory survey today at 3:30 CT.
- As of 7:44 am CST: Brent crude oil down $0.80 to $81.97, US dollar index up $0.187 to 101.535 while the nearby e-mini S&P 500 futures contract is down 18.25 to 4141.00.
Diesel
- Reuters estimates diesel stocks fell by 1 million barrels last week.
- Overseas tour bookings for China’s upcoming holiday from April 29th – May 3rd are up 157% from the beginning of April, according to Ctrip.
- According to Energy Aspects, European gasoil/diesel stocks are expected to rise seasonally from April-August by 23 million barrels.
Gasoline
- Reuters estimates gasoline stocks fell by 1.5 million barrels last week.
- Gasoline imports from Europe fell to 138,000 bpd, down from 444,000 bpd in the previous week.
Propane
- Conway is trading at .8000 while Belvieu is trading at .8100.
- Conway is trading at 43% of crude.
- The US is exporting 73% of production as of 4/14/23.
Natural Gas
- Overnight weather runs added 3.5 TDDs through the two-week forecast.
- Yesterday, US natural gas demand rose to 102.0 Bcf/d.
- Yesterday, the DOE denied Lake Charles LNG’s request for a second extension of its deadline to start exports from its planned Louisiana export terminal.
June Daily WTI: The June WTI contract found a double low yesterday at $76.72 which spurred buying and a rebound to nearby resistance at its 200-day moving average. Expect rangebound trade until we see a new market driver incite a breakout. A slew of corporate earnings and fundamental data from the EIA may establish direction for the end of the week.
