Outlook: Energies continue lower today with crude and products down across the board. Eurozone PMI data came in showing contraction across the board for August. Tightening economic conditions appear evident with those battling inflation which includes the US. S&P Global Manufacturing PMI for the US also showed a contraction today. Not only did it contract but it contracts 2.3 points more than expected for August. The overall trend of contracting economies poses a significant threat to energy demand which is why we are seeing prices slide today. Comments from officials attending the Jackson Hole Symposium may provide additional macro influences tomorrow. US fundamental data will also grab focus this morning at 9:30. Reuters and the API expect crude stocks fell by over 2 million barrels last week while product projections are mixed.
Crude
- Iran intends to increase oil production by 100,000 bpd by the end of the month.
- Eurozone PMI data for August showed widespread contraction, which included the manufacturing sectors.
- The US dollar is stronger today providing headwinds for dollar-based commodities.
- A roll gap has developed with the expiration of the September crude contract between $79.91 and $80.10.
- Reuters estimates crude stocks fell by 2.9 million barrels last week.
- The API survey yesterday afternoon showed crude stocks fell by 2.4 million barrels last week.
- The EIA will report inventories at 9:30 CT.
- As of 9:09 am CST: Brent crude oil up $1.74 to $82.29, US dollar index up $0.124 to 103.558 while the nearby e-mini S&P 500 futures contract is up 27.25 to 4427.00.
Diesel
- Reuters estimates diesel stocks rose by 200,000 barrels last week.
- The API survey showed diesel stocks fell by 150,000 barrels last week.
Gasoline
- Reuters estimates gasoline stocks fell by 900,000 barrels last week.
- The API survey showed gasoline stocks rose by 1.9 million barrels last week.
Propane
- Conway is trading at .6375 while Belvieu is trading at .6425.
- Conway is trading at 33% of crude.
- The US is exporting 52% of production as of 8/11/23.
Natural Gas
- Overnight weather runs were unchanged for the two-week forecast.
- Yesterday, US natural gas demand fell to 100.2 Bcf/d.
- According to Argus, OA has been negotiating with Woodside Energy on behalf of the workers and will likely decide today whether the strike begins on September 2nd.
Continuous Daily RBOB: The gasoline market has been on a slide since the middle of August. The prompt contract found support on its 50-day moving average today, but a bearish EIA report could further challenge this level. A breach of the 50-day could give way to the 100-day down at $2.6643.
