Outlook: Energies are working higher for a third consecutive day with crude and products all up nearly 2%. Early signs of a shift in the global supply and demand dynamic have provided fundamental support this week. Comments from OPEC+ warning those who are shorting the market that further pain may be to come is also providing some psychological influence. OPEC+ is scheduled to meet on Sunday, June 4th in person. Economic reports were thin this week, allowing the focus to remain on fundamentals. The debt ceiling conflict with a risk of a default as soon as June 1st still looms while discussions are set to resume today. Additionally, the FOMC minutes will be released today at 1:00 CT, which could provide further insight for the June Fed meeting. The EIA will release inventory data this morning at 9:30 CT. The API released a more bullish survey than expected yesterday afternoon showing significant draws for crude and products.
Crude
- Negotiators for Biden and McCarthy are expected to resume discussions this morning after no debt ceiling resolution was reached yesterday.
- France announced yesterday that 70% of crude and fuels released from their oil reserves have been replenished since the labor strikes earlier this year.
- The FOMC minutes from the Fed’s last meeting will be released today which could provide insight for what we’ll see next month.
- The US SPR fell by 1.7 million barrels last week.
- Reuters estimates US crude stocks rose by 800,000 last week.
- An industry survey yesterday afternoon showed crude stocks fell by 6.8 million barrels last week, according to sources citing the API.
- The EIA will report inventories today at 9:30 CT.
- As of 8:15 am CST: Brent crude oil up $1.17 to $78.01, US dollar index up $0.013 to 103.501 while the nearby e-mini S&P 500 futures contract is down 19.25 to 4139.00.
Diesel
- Reuters estimates US diesel stocks rose by 400,000 barrels last week.
- An industry survey yesterday afternoon showed diesel stocks fell by 1.8 million barrels last week, according to sources citing the API.
Gasoline
- Reuters estimates US gasoline stocks fell 1.1 million barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks fell by 6.8 million barrels last week, according to sources citing the API.
- Group 3 gasoline values rose 9.5 cents yesterday following a fire at CVR’s Wynnewood refinery in Tulsa, Oklahoma.
Propane
- Conway is trading at .6425 while Belvieu is trading at .6500.
- Conway is trading at 37% of crude.
- The US is exporting 65% of production as of 5/12/23.
- OPIS estimates propane stocks rose by 2.4 million barrels last week.
Natural Gas
- Overnight weather runs were unchanged through the two-week forecast.
- Yesterday, US natural gas demand rose to 92.9 Bcf/d.
- Yesterday, Bloomberg reported that Russia’s natural gas production fell 13% in the first four months of the year compared to last year.
Continuous Daily WTI: The energy complex is having a strong week which has pushed the prompt crude contract near resistance at its 50-day moving average. Fundamental pressures have found their footing this week and will look to continue that run if the EIA confirms bullish inventory projections this morning.
