Outlook: Energies are looking for direction this morning with the exception of diesel which is down nearly 4 cents. The diesel market has seen volatile trade in the first six days of the month, already trading in a ~19-cent range. Crude markets tipped overbought this week which may be the reason for the pause to start the morning. Overall, many headlines lean bullish this morning despite the market leaning lower. Reports of Chinese demand pushing to 2023 highs and global crude stocks falling are not catching on so far. The US dollar rose to a 6 month high yesterday and will be something to keep an eye on. US fundamental data will be reported a day later due to the Monday holiday. That will leave us with the API survey this afternoon and the EIA data tomorrow morning at 10:00 am CT.
Crude
- Saudi Arabia and Russia extended their production cuts which total 1.3 mbpd through December.
- Goldman Sachs estimates Chinese oil demand rose to a 2023 high up 600,000 bpd this week.
- The G7 said they have no immediate plans to review its oil cap price despite Russian Urals trading above $60.
- The US dollar hit 6-month highs at 104.875 overnight.
- The prompt continuous crude contract closed above its upper Bollinger for the second consecutive session yesterday.
- Reuters estimates US crude stocks fell by 1.4 million barrels last week.
- The API will report its inventory survey today at 3:30 pm CT.
- As of 7:26 am CST: Brent crude oil down $0.28 to $89.76, US dollar index down $0.129 to 104.679 while the nearby e-mini S&P 500 futures contract is down 10.25 to 4491.00.
Diesel
- India’s fuel demand rose 6.5% y/y in August.
- Reuters estimates diesel stocks rose by 800,000 barrels last week.
Gasoline
- US gasoline cracks have fallen 6 of the last 7 sessions.
- US gasoline prices are at their highest seasonal level since 2012 with the national average at $3.81.
- Reuters estimates gasoline stocks fell by 800,000 barrels last week.
Propane
- Conway is trading at .7225 while Belvieu is trading at .7350.
- Conway is trading at 35% of WTI.
- The US is exporting 61% of production as of 8/25/23.
Natural Gas
- Overnight weather runs removed 4 CDDs through the two-week forecast.
- Yesterday, natural gas demand rose to 98.0 Bcf/d.
- The back half of September is projected to be cooler than the 10-year average.
Continuous Daily NG: Natural gas has fallen under pressure this week as an intense heat wave moves out. Cooler weather revisions continue to populate in the back half of the forecast which is already projected to be cooler than the 10-year average. Look for the prompt contract to find support on its 100-day moving average near $2.49.
