The energy markets will halt and unofficially settle at 1:30 pm CT on Monday, June 19th in Observance of the Juneteenth holiday. Trade will resume at 5:00 pm CT on Monday evening.
Outlook: The energy complex is turning positive again today, trading back near the levels that opened the week. Headlines and the macros have been supportive after Monday which has allowed buyers to regain control of the market. The IEA released its monthly report today and revised its global demand forecast for 2023 higher to a record 102.3 mbpd. China issued another round of crude import quotas however slower than expected economic growth raises the question of where the crude or refined products will go. The US quietly announced plans to purchase 12 million barrels to refill the SPR this year which is only 6 million additional barrels to what has already been announced. Goldman Sachs expects the US will refill around 40 million barrels in 2024. Attention will shift toward fundamentals this morning with the EIA releasing inventory data at 9:30 am CT. The Fed will announce its interest rate decision at 1:00 pm CT with the market projection a 93% chance of a pause on interest rate hikes.
Crude
- The IEA sees India overtaking China as the largest driver of global oil demand soon.
- The IEA raised its 2023 oil demand forecast by 200,000 bpd to 2.4 mbpd.
- The IEA raised its global production growth forecast for 2023 by 700,000 bpd to 1.9 mbpd.
- China issued its third round of crude import quotas this year, with 62 mm tons allocated to refiners, bringing the YTD total to 194mm tons.
- Shell announced a 15% dividend boost and an increase in the rate of its share buyback program and plans to hold oil output steady.
- The US plans to purchase 12 million barrels for the SPR by the end of the year. This includes the 6 million barrels already announced.
- The Fed is expected to leave interest rates unchanged when they meet today at 1:00 CT.
- Reuters estimates crude stocks fell by 1.3 million barrels last week.
- An industry group survey yesterday afternoon showed crude stocks rose by 1.02 million barrels last week.
- The EIA will report inventories at 9:30 CT.
- As of 7:58 am CST: Brent crude oil up $1.64 to $73.48, US dollar index down $0.523 to 103.131 while the nearby e-mini S&P 500 futures contract is up 21.25 to 4364.00.
Diesel
- Reuters estimates diesel stocks fell by 1.6 million barrels last week.
- An industry group survey yesterday afternoon showed diesel stocks rose by 1.39 million barrels last week.
Gasoline
- Reuters estimates gasoline stocks fell by 600,000 barrels last week.
- An industry survey yesterday afternoon showed gasoline stocks rose by 2.08 million barrels last week.
Propane
- Conway is trading at .5625 while Belvieu is trading at .5775.
- Conway is trading at 34% of crude.
- The US is exporting 58% of production as of 6/2/23.
- OPIS estimates propane stocks fell by 2 million barrels last week.
Natural Gas
- Overnight weather runs removed 4 CDDs the two-week forecast.
- Yesterday, US natural gas demand fell to 93.7 Bcf/d.
- The Texas power grid is expected to see record power demand over the next few days.
Continuous Daily NG: Natural gas has found itself fairly rangebound since coming off its highs at the end of last year. The continuous chart has rejected its 100-day moving average on a few occasions over the last month and looks to challenge the mark again. A close above $2.38 could give way to the previous May 18th high of $2.63. A record-breaking heat wave is moving through Texas pressuring cooling demand this week.
