Outlook: The energy complex is mixed this morning with crude trading lower while gas and diesel trade higher. The market has lacked conviction lately which has caused a rangebound trend that leans slightly bearish. Macro headwinds appear to be edging out planned supply cuts and SPR refills scheduled for the second half of the year. Reports that Russia’s crude exports were off nearly 1 mbpd appear to be all but discounted this morning. Maintenance is the culprit for the disruption of flows, which is temporary, however, the volume of the drop is at a level that typically would grab traders' attention. The market also discounted last week’s EIA data and we’ll see if that trend continues this week. The API will report its survey this afternoon while Reuters is calling for a crude and gas draw and a build in diesel stocks.
Crude
- Russian crude flows through major ports fell by 980,000 bpd last week due to maintenance.
- OPEC is considering extending an invitation to Guyana, who is an up-and-coming oil producing country.
- Volumes of crude stored at sea rose to its highest level in 2 years last week at 129 million barrels.
- The European Central Bank said it probably won’t be able to declare the end of its interest rate hike cycle anytime soon.
- Reuters estimates crude stocks fell by 1.5 million barrels last week.
- The API will report its inventory survey at 3:30 pm CT
- The EIA will report inventories tomorrow at 9:30 CT.
- As of 8:17 am CST: Brent crude oil down $0.55 to $73.61, US dollar index down $0.259 to 102.433 while the nearby e-mini S&P 500 futures contract is up 8.25 to 4378.00.
Diesel
- Reuters estimates diesel stocks rose by 700,000 barrels last week.
- Russian exports of diesel and gasoil rose to 1.15 mbpd last week.
Gasoline
- Reuters estimates gasoline stocks fell by 300,000 barrels last week.
- Shell’s Norco refinery near New Orleans is expected to resume production Tuesday afternoon after power losses caused a shutdown. The refinery can produce 170kbpd of gas and 95kbpd of diesel.
Propane
- 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 1 CDDs the two-week forecast.
- Yesterday, US natural gas demand rose to 94.9 Bcf/d.
- The EIA reported a larger-than-expected injection of 95 Bcf for last week.
- Mountain Valley Pipeline is asking FERC to authorize a full return to construction on its 304 mile, 2 Bcf/d pipeline.
Continuous Daily WTI: The crude market is softening to start the week with prices falling below $70. A bearish economic outlook and de-escalation of the Russian conflict may be enticing some selling. $67 has been a consistent support level over the last month.
