Morning Highlights
Morning Highlights

6-26-23 Energies mixed to start the week...

Riley Schwieger

Jun 26, 2023

Outlook: The energy complex is looking for direction this morning but holds small gains. Over the weekend reports of a coup in Russia started to grab people’s attention. The Wagner military group pulled off the battlefront and marched through various cities due to uncertainty and assurances for its military leaders. A resolution was found quickly to prevent bloodshed, but it was an important reminder of the delicacy of the situation in a country that is key to global oil supply. Saudi Arabia spoke over the weekend stating that their July production cut will reduce flows to the US and Europe. US SPR releases should be wrapped up by month's end, setting the stage for a tightening fundamental environment.   


  • A brief “coup” from the Wagner military group in Russia over the weekend did not disrupt energy flows.
  • Saudi Arabia said its crude production cuts in July would decrease exports to Europe and America, while Asia will receive its original requests.
  • Saudi Arabia sees a sound oil forecast for the second half of the year on the backs of China and India.
  • Saudi Arabia’s crude held at sea has risen to its highest level since 2020.
  • Vitol’s CEO expects oil demand to peak around 2030 and gradually decline to 2040.
  • Global crude in floating storage increased by 15% last week, with Asian-Pacific supply up 34%.
  • Baker Hughes reported US oil rigs fell by 6 to 546 last week. Oil rigs are down 13% from their peak in December 2022.
  • As of 8:08 am CST: Brent crude oil down $0.16 to $74.01, US dollar index down $0.275 to 102.628 while the nearby e-mini S&P 500 futures contract is down 5.25 to 4383.00.


  • BP’s Whiting Indiana refinery which has 435,000 bpd of capacity saw operations disrupted due to severe weather overnight.
  • Last week’s COT report showed heating oil managed money traders net sold 3,877 contracts and are net long 10,365.


  • AAA estimates 43 million motorists will drive 50 miles or more this 4th of July, which would set a record with a 4% increase over 2019 levels.
  • Last week’s COT reported RBOB managed money traders net sold 1,613 contracts and are net long 55,285.


  • Conway is trading at .5500 while Belvieu is trading at .5800.
  • Conway is trading at 33% of crude.
  • The US is exporting 54% of production as of 6/16/23.

Natural Gas

  • Overnight weather runs added 10 CDDs the two-week forecast.
  • Yesterday, US natural gas demand fell to 93.1 Bcf/d.
  • The EIA reported a larger-than-expected injection of 95 Bcf for last week.
  • US natural gas rig counts remained unchanged last week.

Oil S&D: Bloomberg Intelligence estimates OPEC+ supply cuts will push the market into a deficit of 2 million bpd in the 4th quarter. Both WTI and Brent prices are down around 14% this year, driven by slower-than-expected demand growth.