Outlook: The energy complex is lower across the board today with a gloomy economic sentiment preventing any type of rebound. WTI continues to test support on its 50-day moving average at $76.29 and a breach of this level would likely allow crude to completely fill the gap in the continuous chart at $75.72. The market is still showing that it needs a little bit more incentive to initiate the breakout lower and the EIA report this morning may provide that pivot point. Industry sources cited the API as more bullish than the Reuters poll with a 6 million barrel build for crude stocks. Offsetting the more bullish crude print was a contradiction build expected for diesel stocks. A bearish report for diesel could be the driver for the market given its more direct economic implications. The EIA will release inventory data at 9:30 CT this morning.
Crude
- India’s crude imports hit an 11-month high this month, according to Bloomberg.
- Bloomberg data shows that The G7 $60 price cap on Russian Urals was breached throughout the first quarter of 2023 in Asia with the average price in the first four weeks of the year averaging $73.70.
- Four crude tankers holding 3.8 million barrels of oil have been waiting to offload crude in Nigeria for 12 days after Exxon Mobil declared force majeure due to strikes.
- US consumer confidence dropped to a 9-month low in April amidst recessionary fears.
- 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 1.5 million barrels last week.
- An industry survey yesterday afternoon showed crude stocks fell by 6 million barrels, according to sources citing the API.
- The EIA will report inventories at 9:30 CT.
- As of 7:56 am CST: Brent crude oil down $0.88 to $79.89, US dollar index down $0.515 to 101.348 while the nearby e-mini S&P 500 futures contract is up 11.25 to 4104.00.
Diesel
- Reuters estimates diesel stocks fell by 0.8 million barrels last week.
- An industry survey yesterday afternoon showed diesel stocks rose by 1.7 million barrels according to sources citing the API.
- The diesel crack spread has fallen to its weakest level since February of last year.
Gasoline
- Reuters estimates gasoline stocks fell by 0.9 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 1.9 million barrels according to sources citing the API.
Propane
- Conway is trading at .7900 while Belvieu is trading at .7950.
- Conway is trading at 43% of crude.
- The US is exporting 73% of production as of 4/14/23.
- OPIS expects propane stocks to increase by 1.2 million barrels last week.
Natural Gas
- Overnight weather runs removed 2 TDDs through the two-week forecast.
- Yesterday, US natural gas demand rose to 102.5 Bcf/d.
- Dutch TTF prices are down 3% this morning and 20% MTD as above-average supplies put pressure on prices.
Continuous Daily Diesel: The diesel market has continued to resist any upside momentum over the last several months and is looking to hit its lowest level since 2021. In the first part of 2023, we were talking about the possibility to fill the gap in this chart above $4 and now it’s looking more likely that we’ll test $2! Economic sentiment has been a major bear for diesel prices due to how it can impact diesel demand amidst a slowdown. A rebound in crude and gas may look to hold diesel prices steady, but a complete trend change looks unlikely short term.
