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: Energies are looking to post weekly gains with crude and products all trading higher this morning. Headline influences have gone relatively quiet today leaving the market to digest what has unfolded this week. Commodities markets appear to have adopted risk-on sentiment following the Fed decision this week. The US dollar worked substantially lower this week which also supported buying. With the holiday weekend, we could see some risk off selling throughout the session for those who do not wish to hold risk for an extra day. Although energy markets will trade a half session Monday, grain and livestock markets will be closed. The Baker Hughes rig count could provide some influence today with oil rigs on the decline over the last couple of months.
Crude
- China is reportedly looking to invest $140 billion into its economy to stimulate growth.
- India’s crude imports from Russia have surpassed those from OPEC in May for the first time ever.
- Iran’s crude exports exceeded 1.5 mbpd in May, highest since 2018 according to Kpler data.
- The prompt crude spread contango has fallen to its lowest level since March.
- The 321 crack spread has pushed to its highest level since March as it approaches $40.
- The US dollar has fallen nearly 1600 points this week but has found support at $102.000
- Baker Hughes will report rig counts at 12:00 CT.
- As of 8:20 am CST: Brent crude oil up $0.46 to $76.13, US dollar index up $0.086 to 102.197 while the nearby e-mini S&P 500 futures contract is up 12.25 to 4439.00.
Diesel
- Russian seaborne diesel and gasoil exports were up 5% in the first half of June, according to Reuters calculations.
- The prompt diesel contract closed above its 50-day moving average yesterday for the first time since January.
- India’s retail diesel sales in the 1H of June were up 3.4% from May, according to their preliminary sales data.
Gasoline
- Russia’s energy minister said today that there is enough gasoline domestic gasoline supply to meet domestic demand, downplaying the possibility of restricting exports.
- According to Kommersant Daily, Russian gasoline exports grew by 37% y/y from January to May.
Propane
- Conway is trading at .5550 while Belvieu is trading at .5725.
- Conway is trading at 33% of crude.
- The US is exporting 63% of production as of 6/2/23.
- Due to bearish fundamentals, propane values have continued to remain suppressed relative to crude.
Natural Gas
- Overnight weather runs added 5 CDDs the two-week forecast.
- Yesterday, US natural gas demand fell to 93.1 Bcf/d.
- The EIA reported a smaller-than-expected injection of 84 Bcf yesterday.
- Total working gas inventories are 552 Bcf higher than last year and 353 Bcf higher than the 5-year average.
US Dollar Index: The US dollar has fallen nearly 1600 points this week which has provided support for commodities. A weaker US dollar makes dollar-based commodities cheaper for non-dollar currency holders. This can also stimulate exports as prices become more competitive on a global scale. 102 will act as psychological support.
