Outlook: The energy complex is in the red again today with crude and products all trading lower. Diesel closed below trendline support yesterday giving way to further weakness. This chart is included below. Gasoline remains under seasonal pressure with crack spreads on the decline. Overall, a lack of bullish developments may have allowed the overbought markets to observe profit-taking. If the negative week continues, the longer-term trend could be in jeopardy. A government shutdown is looming which is generally seen as negative for energies. The economic environment has been relatively resilient under high-interest rates so far, but a continuation of this smooth path is not guaranteed.
Crude
- Roughly two-thirds of Russian crude and products are being transported by vessels insured or owned in nations implementing G7 price caps.
- Russia’s 4-week average seaborne crude shipments fell 100 kbpd last week to 3.2 mbpd.
- According to an interview on Bloomberg, Continental Resources CEO says oil could reach $150 without government action.
- Vortexa data shows global crude in floating storage rose 11% last week.
- The US SPR rose by 300,000 barrels last week.
- Reuters estimates crude stocks fell by 1.7 million barrels last week.
- The API will report its inventory survey today at 3:30 CT.
- The US dollar in approaching yearly highs trending positive to start the week.
- As of 8:05 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
- Reuters estimates diesel stocks fell by 2.1 million barrels last week.
- Diesel is moving sharply lower this week after a close below trendline support yesterday.
Gasoline
- Reuters estimates gasoline stocks fell by 100,000 barrels last week.
- Gasoline imports from Europe rose to 339,000 bpd last week, up from 88,000 bpd the previous week.
- Spot RBOB traded at its steepest discount since 2009 at 1.25 cents below Nymex yesterday.
Propane
- Conway is trading at .6725 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.
- Global LNG in floating storage rose by 30% last week to a 16-month high.
- Reuters poll estimates a natural gas injection between 80-92 Bcf for last week.
Continuous Daily ULSD: Diesel led the complex lower yesterday closing below trendline support. The technical signal of further downside is coming to fruition this morning as diesel continues its decline. Look for the 50-day moving average around $3.11 to defend against a larger move lower towards $3.00 this week.
