Outlook: Energies are off to a slow start today after a strong rally in the prior session. A lack of fresh bullish drivers has the market idle for the time being. Russia is in the headlines this morning with reports of Urals being sold to India at prices closer to $100 than the G7 price cap. India had previously said they plan to abide by the price cap. Several speeches from Fed officials today, including Jerome Powell, could provide additional macro influence. Hawkish rhetoric has not been able to take the driver's seat and halt the uptrend lately, and it seems unlikely that will change today. Inflation data from the PCE will be reported tomorrow morning and Chinese manufacturing data will be reported tomorrow night for fresh drivers.
Crude
- Russian oil is reportedly being sold to India at 30% above the G7 oil price cap, according to Reuters.
- The Chinese government has told the country’s major oil refiners not to expect any more fuel export quotas this year, according to Bloomberg.
- WTI’s prompt time spread pushed above $2.50 today for the first time since July of last year.
- The EIA reported US crude stocks fell by 2.1 million barrels last week.
- Crude stocks at Cushing fell by 943,000 to 21.9 million barrels last week.
- Operational minimums for Cushing are estimated at around 19.6 million barrels.
- Refinery utilization fell 2.4% last week but remains 2.9% above 5-year seasonal average levels.
- The US dollar in approaching yearly highs trending positive to start the week.
- As of 7:30 am CST: Brent crude oil down $0.40 to $96.15, US dollar index down $0.333 to 106.333 while the nearby e-mini S&P 500 futures contract is up 5.25 to 4318.00.
Diesel
- The EIA reported diesel stocks rose by 398,000 barrels last week.
- Diesel demand fell 4% w/w but remains 8% above year-ago levels on a 4wk average seasonal basis.
Gasoline
- The EIA reported gasoline stocks rose 1 million barrels last week.
- Gasoline demand rose 2% w/w and remains 1% above year-ago levels on a 4wk average seasonal basis.
Propane
- Conway is trading at .6750 while Belvieu is trading at .7125.
- Conway is trading at 32% of WTI.
- The US is exporting 78% of production as of 9/15/23.
- The EIA reported propane stocks rose by 730,000 barrels last week.
- Propane exports jumped 812,000 bpd (66%) to 2.041 mbpd last week.
Natural Gas
- The CME will be launching micro Henry Hub futures and options on November 6th. Contracts will be 1/10th of the size of the standard contract and will be cash settled.
- Weekend weather added 12 HDDs through the two-week forecast.
- Reuters poll estimates a natural gas injection between 80-92 Bcf for last week.
Continuous Daily CL: With a fresh high today, prompt WTI traded to its highest level since August 2022. Crude did not manage to close above the Nov22 high of $93.74 and has since reversed lower after setting the high earlier this morning.
