Outlook: Energies are mixed this morning with crude and gas trading lower while diesel edges higher. The diesel market continues to surprise traders with tightening stocks despite an economic environment that would traditionally decrease demand. The prospect of a soft landing continues to grow, which the diesel strength representing a solid indicator. Congestion levels largely declined last week across the globe which could be pressuring gasoline. Overall, the gas market is on the clock with summer winding down and likely feeling overextended. Two new tropical disturbances developing over the weekend will be worth keeping an eye on. If either develops into a hurricane and threatens the Gulf, we could see refined products react by moving higher.
Crude
- Turbulence with a large Chinese real estate company is offsetting the removal of foreign covid era travel restrictions.
- China’s onshore crude stockpiles have fallen over 13 million barrels over the last two weeks, according to Vortexa.
- Iran is exporting over 1.4 million bpd of oil, according to the Mehr News Agency.
- Russia’s oil processing averaged 5.6 mbpd August 1-9th, down 0.2% from July.
- Global crude in floating storage fell by 4.2% last week.
- Baker Hughes reported US oil rigs were unchanged at 525 last week.
- Last week’s COT report showed crude oil managed money traders added 4,199 contracts to their net long 210,158 contracts.
- As of 8:32 am CST: Brent crude oil down $0.47 to $86.33, US dollar index up $0.447 to 103.289 while the nearby e-mini S&P 500 futures contract is down 7.25 to 4473.00.
Diesel
- Two new tropical disturbances have developed in the Atlantic over the weekend.
- Last week’s COT report showed Heating Oil managed money traders added 5,091 contracts and are net long 33,523 contracts
Gasoline
- Global road congestion levels softened in the Asia Pacific, North America, and Europe.
- Last week’s COT report showed RBOB-managed money traders added 8,993 contracts and are net long 68,670 contracts
Propane
- Conway is trading at .7000 while Belvieu is trading at .7150.
- Conway is trading at 35% of crude.
- The US is exporting 67% of production as of 8/4/23.
Natural Gas
- Overnight weather runs were unchanged for the two-week forecast.
- Yesterday, US natural gas demand rose to 102.6 Bcf/d.
- Baker Hughes reported US nat gas rigs fell by 5 to 123.
Natural Gas: Volatility in the natural gas market has seen a sharp resurgence over the last few weeks. Looming strikes at Australian LNG facilities have stoked supply shortage fears, with over 10% of global exports at risk. Global stocks are in good condition for the time being, but a harsher winter could present a truer test for countries avoiding Russian supply.
