Outlook: Energies are in the green today with crude and products trading higher early in the session. Supporting the move this morning is reports that Russia’s crude exports are beginning to reflect the proposed production cuts being implemented. Russia’s crude exports had continued to trend higher on a 4-week average despite a 500,000 bpd production cut implemented earlier this year, but that trend has come to a halt. Additional supportive news is coming from China with reports that further stimulus measures that target the property sector are in the works. Any action that can boost China’s economy is expected to also boost demand, which is supportive of pricing. Markets may shift attention toward US fundamentals with the API reporting its survey this afternoon followed by the EIA confirming data tomorrow morning.
Crude
- Russia’s seaborne crude exports fell by over 1 million bpd last week to 2.86 mbpd, according to Bloomberg data.
- China’s top state-run financial newspaper signaled additional economic support is planned for the property sector as a stimulus effort.
- The IEA still expects a tightening fundamental market for the rest of the year with countries outside the OECD group of developed nations making up 90% of demand growth.
- Crude in floating storage rose 5.5% last week to 112.07 million barrels.
- The US SPR fell by 400,000 barrels last week which completes the 26-million-barrel mandated release.
- Reuters estimates crude stocks rose by 200,000 barrels last week.
- The API will release its inventory survey at 3:30 CT.
- The EIA will release its Short-Term Energy Outlook today around noon.
- US CPI will be reported tomorrow morning at 7:30 am CT.
- As of 8:37 am CST: Brent crude oil up $0.59 to $78.28, US dollar index down $0.105 to 101.867 while the nearby e-mini S&P 500 futures contract is up 11.25 to 4455.00.
Diesel
- Reuters estimates diesel stocks fell by 400,000 barrels last week.
- The prompt continuous diesel crack has risen over $10 since early May, trading over $34 today.
Gasoline
- Reuters estimates gasoline stocks fell by 1.3 million barrels last week.
Propane
- Conway is trading at .5900 while Belvieu is trading at .6325.
- Conway is trading at 32% of crude.
- The US is exporting 48% of production as of 6/30/23.
- Winter propane strips for 2024-2025 were priced around 73 cents last week. Please reach out for updated values.
Natural Gas
- Overnight weather runs added 1 CDDs to the two-week forecast.
- Yesterday, US natural gas demand fell to 97.1 Bcf/d.
- Another heat wave is expected to impact Texas through July 14th.
- Dutch TTF prices have fallen to their lowest level in a month after falling 12% yesterday as demand remains soft.
Russian Seaborne Exports: Russia’s seaborne crude flows fell by over 1 million bpd last week with 80% of the drop coming from ports in Western Europe. 4-week average shipments have declined since refinery maintenance began over the last month. Exports are expected to decline amidst production and export cuts for July and August.
