Outlook: Energies are leaning positive this morning but will likely find a more definitive direction following the inventory stats this morning. The API survey showed a larger-than-expected draw of 6.2 million barrels while Reuters is suggesting something around 2 million barrels. Tightening fundamentals have caught the trade's attention lately with the economic scene looking a little less bleak. The Fed will give us another look at their perspective with the meeting minutes from last month's meeting set to be released mid-day today. The market feels like it's priced in a more dovish path lately so any contradictory rhetoric could flip the markets mood. Look for $80 in crude and $3.00 in diesel to act as key support today if markets take a turn lower.
Crude
- China is purchasing the most Iranian crude in a decade with imports expected to hit 1.5 mbpd this month.
- China extended its anti-espionage push to the energy sector, calling for companies and agencies to halt leaks and information.
- UBS raised its WTI forecast for year-end by $6 to $91.
- Reuters estimates crude stocks fell by 2.3 million barrels last week.
- The US SPR rose by 600,000 barrels last week.
- The API survey showed crude stocks fell by 6.2 million barrels last week.
- The FOMC minutes from the July meeting will be released today at 1:00 CT.
- As of 8:20 am CST: Brent crude oil down $0.59 to $85.62, US dollar index down $0.327 to 102.863 while the nearby e-mini S&P 500 futures contract is down 18.25 to 4487.00.
Diesel
- The API survey showed diesel stocks fell by 800,000 barrels last week.
- Reuters estimates diesel stocks fell by 500,000 barrels last week.
Gasoline
- The API survey showed gasoline stocks rose by 700,000 barrels last week.
- Reuters estimates gasoline stocks fell by 1.6 million barrels last week.
Propane
- Conway is trading at .6425 while Belvieu is trading at .6450.
- Conway is trading at 33% of crude.
- The US is exporting 67% of production as of 8/4/23.
- A Nov24-Mar25 propane swap is pricing around 75 cents following the weakness this week. Please reach out for updated numbers.
Natural Gas
- Overnight weather runs removed 5 CDDs for the two-week forecast.
- Yesterday, US natural gas demand fell to 102.1 Bcf/d.
- Yesterday, natural gas production fell by 102.0 Bcf/d.
Continuous Daily NG: The nearby natural gas contract has pulled back this week and is trading near its 50-day moving average. While hot weather moves across the country this week, the back end of the forecast has shifted cooler and pressured prices. This dip may present a buying opportunity if you are looking for any crop drying coverage ahead of harvest. A similar situation has developed in propane.
