Outlook: Energy products are rebounding higher this morning while crude has yet to find direction. The prompt continuous WTI contract is treading between its 100 & 200 day moving average which sets a range between $77.25 and $73.64. The fundamental tightening across the globe has garnered more attention recently as we’ve worked into the second half of the year. Economic headwinds have slowed but remain prominent with the Fed expected to hike interest rates further this month. We have not seen a fear-stoking event like some of the banking struggles that occurred earlier this year in some time but the risk remains. The US dollar has remained near its low after breaching 100.000 and will continue to have an influence on energy prices. Economic reports are light this week, however, the weekly jobless claims data on Thursday will be closely monitored due to its ongoing resiliency to higher interest rates.
Crude
- Russia’s seaborne crude exports over the last four weeks fell to a six-month low of 3.1 mbpd, according to Bloomberg data.
- Russia said yesterday they will cut exports via sea and pipeline to meet their 500,000 bpd cut.
- Libya plans to export 1.06 mbpd of crude in July, up from 1.01 mbpd in June.
- The EIA’s drilling productivity reports estimate US crude production to rise 14,000 bpd between July and August.
- From May to June, the total number of drilled but uncompleted wells decreased by 24 to 4,804 wells.
- The CME Fedwatch tool shows a 97% chance of a 25 bp hike for the July 26th meeting.
- Reuters estimates crude stocks fell by 2.3 million barrels last week.
- The API will release its inventory survey this afternoon at 3:30 CT.
- As of 8:14 am CST: Brent crude oil up $0.03 to $78.55, US dollar index up $0.016 to 99.858 while the nearby e-mini S&P 500 futures contract is down 5.25 to 4548.00.
Diesel
- Reuters estimates diesel stocks fell by 100,000 barrels last week.
- Economic headwinds in major diesel-consuming countries still provide significant downside risk to this market.
Gasoline
- Reuters estimates gasoline stocks fell by 2.1 million barrels last week.
- US gasoline imports from Europe fell to a 7-week low last week at 200,000 bpd.
- China’s gasoline exports rose 31% y/y in June, according to the General Administration of Customs.
Propane
- Conway is trading at .5975 while Belvieu is trading at .6300.
- Conway is trading at 34% of crude.
- The US is exporting 63% of production as of 7/7/23.
Natural Gas
- Overnight weather runs added 5 CDDs for the two-week forecast.
- Yesterday, US natural gas demand rose to 103.9 Bcf/d.
- Heat waves across Europe and Asia are supporting TTF prices.
August Gasoline Crack: Gasoline profitability continues to rise with the August contract setting fresh highs today. Healthy gasoline demand and tightening inventories have presented a favorable scenario for margins to remain high.
