Outlook: Energies are off to a slower start this morning after two consecutive sessions of selling. The market may find direction mid-morning with the release of the EIA inventory data. The API survey yesterday came across as bearish with builds anticipated across the board, while the Reuters poll suggests crude and gas stocks fell last week. Weekly inventory data has been volatile and has yet to really grab control of the trend. More focus will be put on the OPEC decision over the weekend to see how they assess the current supply and demand dynamic. Early indications are that they will not make any adjustments to their current cut, but they also surprised the market last go around, which caused crude to gap higher. The price of WTI is roughly $7 lower than where it was prior to the last OPEC+ meeting. ISM Manufacturing data will be released today and Nonfarm payrolls will be released tomorrow which could provide market influence.
Crude
- India’s crude imports from Russia set a fresh record in May, importing 1.96 mbpd according to Vortexa data. This was 15% higher than in April.
- The EIA revised its March US oil production higher to 12.696 mbpd which is a 3-year high.
- The average price for Russian Urals fell by 9% m/m to $53.34 in May, according to their Finance Ministry.
- Iraq says they exported 3.305 mbpd of crude in May at an average price of $71.30. They exported 3.288 mbpd in April.
- OPEC+ will meet June 3-4th.
- Four OPEC+ sources have said the group is unlikely to deepen output cuts.
- The House passed the debt-limit legislation yesterday.
- The EIA will report inventories at 10:00 CT.
- Reuters estimates US crude stocks fell by 1.4 million barrels last week.
- An industry survey yesterday afternoon showed US crude stocks rose by 5.2 million barrels last week, according to sources citing the API.
- As of 8:13 am CST: Brent crude oil down $0.05 to $72.55, US dollar index down $0.304 to 104.022 while the nearby e-mini S&P 500 futures contract is up 2.25 to 4192.00.
Diesel
- Reuters estimates diesel stocks rose by 900,000 barrels last week.
- An industry survey yesterday afternoon showed diesel stocks rose by 1.8 million barrels last week, according to sources citing the API.
Gasoline
- RBOB gapped lower at the open last night with the June contract expiring and July sliding in.
- Reuters estimates US gasoline stocks fell by 500,000 barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks rose by 1.9 million barrels last week, according to sources citing the API.
Propane
- Conway is trading at .5650 while Belvieu is trading at .5750.
- Conway is trading at 35% of crude.
- The US is exporting 52% of production as of 5/19/23.
- OPIS estimates US propane stocks rose by 2.2 million barrels last week.
Natural Gas
- Overnight weather runs removed 8 CDDs through the two-week forecast.
- Yesterday, US natural gas demand rose to 92.0 Bcf/d.
- The EIA is expected to report a 107 Bcf injection for last week.
- The 5-year average injection is 101 Bcf.
India Oil Imports: India’s oil imports from Russia rose 15% m/m to 1.96 mbpd. Russia is still offering oil at a discounted rate which is enabling them to grab market share. Imports from Saudi Arabia fell to the lowest level since February of 2021, according to Vortexa data.
