Outlook: Energies are looking for direction this morning as crude manages small gains while products decline. The market hasn’t seen a fresh driver capable of producing a breakout this week leaving crude in the middle of its monthly range for August. Energies may be anticipating a larger-than-expected crude draw today and build in products following the API survey yesterday. Demand data will likely draw more focus than supply due to the fragile economic environment. Economic reports this morning continued to reinforce the idea that the Fed may take its foot off the gas in regards to interest rate hikes next month. We’ll wait to see the EIA’s inventory stats at 9:30 CT this morning and move forward from there.
Crude
- Reuters expects Saudi Arabia to raise its crude prices to Asia to its highest level this year in October.
- The military in Gabon seized power yesterday and could impact crude exports with an average 160,000 bpd to Asia in May, per Kpler data.
- US Annualized GDP for Q2 came in below expectations at 2.1% vs 2.4% est.
- ADP Employment for August which measures the change in number of employed people, was reported below expectations at 177k vs 195k est.
- The US SPR rose by 600,000 barrels last week.
- Reuters estimates crude stocks fell by 3.3 million barrels last week.
- The API survey showed crude stocks fell by 11.5 million barrels last week.
- Hurricane Idalia will make landfall today.
- As of 8:00 am CST: Brent crude oil up $0.27 to $85.76, US dollar index down $0.409 to 103.122 while the nearby e-mini S&P 500 futures contract is up 1.25 to 4507.00.
Diesel
- The API survey showed diesel stocks rose by 2.5 million barrels last week.
- Reuters estimates diesel stocks rose by 200,000 barrels last week.
Gasoline
- The API survey showed gasoline stocks rose by 1.4 million barrels last week.
- Reuters estimates gasoline stocks fell by 900,000 barrels last week.
- Gasoline imports from Europe rose to their highest level in 14 weeks at 495,000 bpd last week, according to Bloomberg.
Propane
- Conway is trading at .6750 while Belvieu is trading at .6850.
- Conway is trading at 35% of crude.
- The US is exporting 56% of production as of 8/18/23.
- OPIS expects propane stocks to have fallen by 2.2 million barrels last week.
Natural Gas
- Overnight weather runs were unchanged through the two-week forecast.
- Yesterday, natural gas demand fell to 100.6 Bcf/d.
- Chevron LNG workers in Australia may begin incremental strikes next week.
- Power burn demand could falter as hundreds of thousands are expected to be without power following Idalia’s move through Florida.
Continuous Daily HO: Diesel is the weak leg today down nearly 3 cents. The weekly trend could be tested this week with a close below the 9-day MA. Reports of increased diesel export quotas in China for September may be providing pressure today.
