Outlook: The energy complex looks relatively undecided this morning with crude slightly lower and products holding marginal gains. Macro concerns have resurfaced this week which has taken the wind out of the sails for crude and gasoline. Diesel continues to maintain resilience with stocks the tightest of the bunch. Depleted diesel stocks before refinery turnaround and heating season have likely built in a premium in the marketplace. Hurricane season has been uneventful so far as it relates to refinery row despite a plethora of tropical storms cruising by. The risk of a disrupting event still remains through early fall. At this point, global fundamentals still lean bullish despite some of the bearish economic data suggesting potential demand destruction. The 60 million barrel decline in global onshore crude stocks last week should provide underlying support.
Crude
- The Biden Administration is in talks with Venezuela to temporarily lift sanctions if they hold a fair election next year.
- The continuous daily WTI chart saw a Golden Cross today with the 50-day moving average crossing above the 200-day moving average.
- WTI’s open interest fell to its lowest since January.
- The EIA reported crude stocks fell by 6.1 mbpd last week.
- US crude production rose 100,000 bpd to 12.8 mbpd last week.
- Fed officials and policymakers from the ECB, BoE, and Bank of Japan are meeting in Jackson Hole today and tomorrow.
- As of 7:51 am CST: Brent crude oil down $0.20 to $83.01, US dollar index up $0.453 to 103.871 while the nearby e-mini S&P 500 futures contract is up 18.25 to 4465.00.
Diesel
- The EIA reported diesel stocks rose by 337,000 barrels last week.
- US diesel demand rose by 5.2% w/w to 3.8 mbpd.
- 4-week average diesel demand still remains 2.2% below year-ago levels for this time of year.
Gasoline
- The EIA reported gasoline stocks fell by 277,000 barrels last week.
- Gasoline demand rose 59,000 bpd last week to 8.9 mbpd.
- An unplanned outage at TotalEnergies SE’s Antwerp refinery may disrupt gasoline supplies for several weeks. The refinery processes 338,000 bpd of crude.
- Italy’s gasoline consumption beat pre-pandemic levels for a seventh straight month in July, according to ministry data.
Propane
- Conway is trading at .6500 while Belvieu is trading at .6500.
- Conway is trading at 35% of crude.
- The US is exporting 56% of production as of 8/18/23.
- The EIA reported US propane stocks rose by 1.6 million barrels last week.
Natural Gas
- The EIA is expected to report an injection of around 30 Bcf for last week.
- The Australian LNG strike has been avoided and 1st month TTF gapped lower this morning.
- Russia’s natural gas output in July fell by 6.7% vs year-ago levels.
Global Onshore Crude Stocks: World crude stocks were reported at 3.37 billion barrels as of Wednesday, which is around 60 million barrels lower than the month prior, according to Kpler data. China is assumed to account for the majority of the drawdown with state-owned processors hitting record rates this month.
