Outlook: Energies are off to a quiet start to the week with crude and gasoline trading marginally higher while diesel falls. Diesel may be finding pressure this morning following Russia’s amendment of their oil product export ban last week. Russia plans to relax the ban on low-quality diesel fuels which may provide some supply relief. Overall, Russia’s diesel exports declined sharply in September due to seasonal refinery maintenance. There is growing market chatter calling for oil to hit $100 by the end of Q4 this year but recent rallies have been unsuccessful at pressing to fresh highs. The funds have continued to add length but a fresh driver is likely needed to break through recent resistance levels. The US dollar will garner attention this week as it tests yearly highs. A breakout higher in the US dollar could be bearish for dollar-based commodities. Economic reports are light today but Consumer confidence could provide direction tomorrow.
Crude
- The prompt crude spread has expanded to fresh highs this morning surpassing $1.75.
- Cushing stocks have approached 5-year seasonal lows to reflect a tightening physical market.
- Baker Hughes reported US oil rigs fell by 8 to 507 last week.
- Last week’s COT report showed crude oil managed money traders added 15,084 contracts to their net long 294,396 positions.
- The US dollar in approaching yearly highs trending positive to start the week.
- As of 8:19 am CST: Brent crude oil up $0.16 to $93.43, US dollar index up $0.201 to 105.784 while the nearby e-mini S&P 500 futures contract is down 12.25 to 4348.00.
Diesel
- Russia’s amended its fuel-export ban issued last week to exclude gasoils and some middle distillates.
- Russia’s diesel exports fell 28% in the first 20 days of September
- Indian Oil plans to shut down its Guwahati refinery in northeast Assam from October-November for an expansion project.
- Last week’s COT report showed HO managed money traders added 1,490 contracts and are net long 36,160 contracts.
Gasoline
- The prompt Nymex gasoline crack has fallen to its lower levels since December.
- Prompt continuous RBOB closed below its 200-day moving average on Friday.
- Last week’s COT report showed RBOB managed money traders net sold 11,120 contracts and are net long 61,379 contracts.
Propane
- Conway is trading at .6825 while Belvieu is trading at .6950.
- Conway is trading at 32% of WTI.
- The US is exporting 47% of production as of 9/15/23.
Natural Gas
- Weekend weather added 11 CDDs through the two-week forecast.
- TTF is up 9% this morning with the Skarv gas field expending cuts through next month.
- Last week the US Federal Energy Regulatory Commission approved the expansion of the Port Arthur LNG export terminal. The expansion will double the facilities capacity to 12.5 million mt/yr.
Continuous Daily RBOB Crack: Prompt RBOB closed below its 200-day MA on Friday and the nearby crack has fallen to its lowest level since December. The December low was $13.62 and may act as support.
