Outlook: The energy complex is mixed this morning with crude slightly lower and products up over a penny. Market drivers have leaned bullish this week which has kept the overall trend intact. Reports of a significant jump in Chinese crude imports support the demand recovery narrative which has been lacking as of late. The US dollar has also developed a bullish trend and is trading above 105 this morning. 105.883 may as resistance, representing the 2023 high set back in. US fundamental data will look to provide influence today, with estimates expecting significant draws in both crude and gasoline. A streak of declining stocks is beginning to show greater deficits to 5-year average levels and may attract growing concern.
Crude
- Saudi Arabia raised its selling price of crude to Asian customers for the fourth month in a row. The 10 cent increase however was lower than the expected 30 cent bump.
- Russia’s offline primary oil refining capacity was revised up by 4.5% in September, according to Reuters.
- China’s overall exports fell by 8.8% in August, while Crude imports rose 30.9%.
- Contractors at UK oil refineries will be balloted on strike action over wage disputes. Strikes could impact over 500,000 bpd of crude processing, per Bloomberg.
- Reuters estimates US crude stocks fell by 2.1 million barrels last week.
- The API survey estimates crude stocks fell by 5.5 million barrels last week.
- The EIA will report inventories at 10:00 am CT.
- As of 7:57 am CST: Brent crude oil down $0.36 to $90.24, US dollar index up $0.247 to 105.247 while the nearby e-mini S&P 500 futures contract is down 34.25 to 4436.00.
Diesel
- The API survey showed diesel stocks rose by 306,000 barrels last week.
- Reuters estimates diesel stocks rose by 200,000 barrels last week.
- Singapore middle distillate stocks have risen to a 21 week high.
Gasoline
- The API survey showed gasoline stocks fell by 5.1 million barrels last week.
- Reuters estimates gasoline stocks fell by 1 million barrels last week.
Propane
- Conway is trading at .7300 while Belvieu is trading at .7375.
- Conway is trading at 35% of WTI.
- The US is exporting 61% of production as of 8/25/23.
- OPIS estimates propane stocks rose 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 99.5 Bcf/d.
- The EIA is expected to report a 41 Bcf injection into storage today. The 5-year average injection is 60 Bcf.
- Chevron LNG workers have paused the strike originally planned for today. The strike may resume tomorrow morning.
Continuous Daily RBOB: Despite the end of the driving season, the gasoline market has started September off strong. If a significant stock draw is confirmed by the EIA today, the market may have more rally left in it. Group 3 gas basis also saw a strong move yesterday, closing above +24c for September.
