Outlook: The energy complex has shifted into idle this morning following a 3-day rally. Crude and products are observing marginal losses but the US dollar continues on its trek lower. A shift in the macro scene has allowed the dollar the soften this week with the economy showing signs of slowing amidst economic tightening. The Fed is still expected to increase interest rates this month, but what’s to come after that remains more up in the air. OPEC and the IEA released their monthly reports today which shared conflicting revisions to global oil demand growth. Both expect demand to increase by over 2 million bpd this year despite recessionary threats. The recessionary fears have gone quiet over the last two weeks but it remains something that should not be overlooked. Volatility is expected to continue as the marketplace attempts to navigate a fragile trade environment.
Crude
- OPEC raised its 2023 oil demand forecast by 90,000 bpd to 2.44 mbpd.
- OPEC’s oil production rose by 91,000 bpd to 28.19 mbpd in June, led by Iran and Iraq.
- The IEA decreased its 2023 oil demand growth by 220,000 bpd to 2.2 mbpd.
- The IEA forecast global oil demand to reach 102.1 mbpd this year.
- Chinese exports last month fell by the fastest pace since 2020, falling by 12.4% year-on-year.
- Chinese imports also fell more than expected at 6.8% vs 4% est.
- The EIA reported US crude stocks rose by 5.9 million barrels last week.
- The US SPR fell by 400,000 barrels last week which completes the 26-million-barrel mandated release.
- US crude production fell by 100,000 bpd last week to 12.3 mbpd.
- As of 8:38 am CST: Brent crude oil up $0.05 to $80.16, US dollar index down $0.387 to 100.134 while the nearby e-mini S&P 500 futures contract is up 25.25 to 4530.00.
Diesel
- The EIA reported diesel stocks rose by 4.8 million barrels last week.
- 4-week average diesel demand sits at 3.52 mbpd and 7.3% below year ago levels for this time period.
Gasoline
- The EIA reported gasoline stocks fell by 4,000 barrels last week.
- 4-week gasoline demand sits at 9.26 mbpd, up 6.1% from year ago levels for this time period.
Propane
- Conway is trading at .6125 while Belvieu is trading at .6400.
- Conway is trading at 34% of crude.
- The US is exporting 63% of production as of 7/7/23.
- The EIA reported propane stocks rose by 2.6 million barrels last week.
- Winter propane strips for 2024-2025 were priced around 73 cents last week. Please reach out for updated values.
Natural Gas
- Overnight weather runs were unchanged for the two-week forecast.
- Yesterday, US natural gas demand rose to 100.7 Bcf/d.
- The EIA is expected to report a 54 Bcf injection today.
Chinese Oil Imports: China’s oil imports rose 4.6% in June to 12.72 mbpd, according to government data. This marked the highest import level since June of 2020, according to Bloomberg data. Sluggish domestic demand has continued to offset the bullish view of rising oil imports.
