Morning Highlights
Morning Highlights

8-25-23 Energies gain while crude heads for second weekly loss...

Riley Schwieger

Aug 25, 2023

Outlook: The energies complex is stronger this morning yet crude still trends for its second consecutive weekly loss. Diesel continues to be the strongest leg of the complex and is up nearly 5 cents this morning. Market fundamentals continue to lean bullish with Vortexa reporting drawdowns in both on and offshore global crude stocks over the last week. Economic tightening has yet to show convincing signs of demand destruction in the high interest rate environment which was again supported by draws in both gas and diesel stocks at Europe’s Ara hub last week. Further direction on where interest rates go or how long they stay high may be provided when Jerome Powell addresses the symposium in Jackson Hole today. Hawkish rhetoric may act to limit upside moves short term until fresh drivers develop.      


  • OPEC members who’ve performed below quota: Iran, Iraq, Libya, Nigeria, and Venezuela are expected to add 900,000 bpd of production this year and next. OPEC could introduce further cuts to offset these gains.
  • Iran said they expect oil output to hit 3.4 mbpd by the end of September.
  • Turkey and Iraq have resumed discussions regarding oil export flows the Ceyhan.
  • The WCS-WTI spread has weakened this week due to possible delays of the TMX crude pipeline expansion project.
  • US talks with Iran and Venezuela are resurfacing but will likely need more momentum for the trade to take seriously.
  • Baker Hughes will report its rig count at 12:00 CT.
  • Fed officials and policymakers from the ECB, BoE, and Bank of Japan are meeting in Jackson Hole today.
  • The US dollar rose to a 10-week high this morning.
  • As of 8:01 am CST: Brent crude oil up $1.10 to $84.46, US dollar index down $0.023 to 103.959 while the nearby e-mini S&P 500 futures contract is up 17.25 to 4402.00.


  • Gasoil stocks at Europe’s Ara hub fell 3% last week.
  • Russia has shipped 2.24 mbpd of oil products in the first 20 days of August, down 14% from July according to Bloomberg.


  • Gasoline stocks at Europe’s ARA hub fell 8% last week.
  • Turkish refiner Tupras shut a gasoline-making unit this week due to unplanned maintenance. The unit has a capacity of 13,800 bpd.


  • Conway is trading at .6575 while Belvieu is trading at .6725.
  • 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

  • Overnight weather runs added 1 CDD to the two-week forecast.
  • Yesterday, natural gas demand rose to 105.4 Bcf/d.
  • The EIA reported a smaller-than-expected injection of 18 Bcf yesterday.
  • Total storage sits 9.5% above the 5-year average.

Continuous Daily NG: Prompt natural gas has found support on its 100-day moving average this week. Short-term oversold indications may also be working to halt the downward momentum. The smaller-than-expected injection into inventories last week provided a bump yesterday but overall fundamentals remain bearish with plentiful storage.