Outlook: Amidst all the volatility this week, the energy complex is on pace to finish near where it started the week. Supply concerns still remain the key bullish driver in the marketplace and reports of Chinese onshore oil storage declining are reigniting hopes for Chinese demand growth. More than likely the depletion is the result of increased export quotas for refined products and economic reports will need to reinforce demand growth before the market runs with it. Both China and India have shown positive demand signals this week. On the bearish front, hawkish signals from the Fed resurfaced this week which put risk-off pressure on commodities yesterday. Fed Fund futures suggest another pause for the November meeting but higher-for-longer is the rhetoric that the trade fears. Expect delicate trade through the end of the year and keeping DPRs tight is best practice during times of uncertainty.
Crude
- Chinese onshore crude oil stocks fell to their lowest level since June after 3 months of increases per Bloomberg.
- US offline refinery capacity is expected to reach 1.4 mbpd this week, up from 800 kbpd last week, per IIR Energy.
- The Fed shared a more hawkish view this week after keeping interest rates flat, while futures suggest a 75% chance of another pause in November.
- Baker Hughes will report its rig count at 12:00 CT.
- As of 8:25 am CST: Brent crude oil up $0.88 to $94.18, US dollar index up $0.150 to 105.515 while the nearby e-mini S&P 500 futures contract is up 13.25 to 4385.00.
Diesel
- AAA reports the national average retail diesel price at $4.582
- Europe’s ARA gasoil stocks rose to 1.912 million tonnes from 1.9000 last week.
- Singapore’s middle distillates stocks fell by 100,000 barrels this week to 9.001 million barrels and net gasoil exports fell 58% w/w.
- Russian wholesale diesel prices are down 7.5% today following the export ban announcement.
Gasoline
- AAA reports the national average retail gasoline price at $3.859
- Europe’s ARA gasoline stocks fell to 1.326 million tonnes from 1.415 last week.
- Singapore’s light distillate stocks rose 805,000 barrels to 13.138 million barrels this week.
- Russian wholesale gasoline prices are down nearly 10% today.
Propane
- Conway is trading at .6800 while Belvieu is trading at .6925.
- Conway is trading at 34% of WTI.
- The US is exporting 47% of production as of 9/15/23.
Natural Gas
- Overnight weather added 3 TDDs through the two-week forecast.
- The EIA reported a 64 bcf injection for last week.
- Total storage stands 5.9% above the 5-year average levels.
Continuous Daily Nat Gas: Prompt natural gas has continued to find support near its 100-day moving average. A slightly smaller-than-expected inventory injection caught little attention as total inventories sit with a seasonal surplus. Look for the 200-day to act as resistance as we swing higher.
