Outlook: Energies are higher to start the week even with Asia showing declines in crude imports and China’s Manufacturing data falling below expectations. European manufacturing data showed widespread contractions as expected during their fight against inflation. US manufacturing is expected to show similar data with the release of the PMI report at 9 a.m. The bearish economic headwinds still have traders expecting demand to outpace supplies with the current cuts in the global market. 4 OPEC sources told Reuters that OPEC+ is unlikely to make any production adjustments at their meeting on Wednesday. On top of OPEC+ oil cuts, Russia’s diesel exports were down sharply in September following their ban of product exports. WTI remains comfy near $90 while products are up around 3 cents on the day.
Crude
- OPEC+ is unlikely to adjust its production cuts this week, according to Reuters.
- Asia’s crude oil imports fell to 24.95 mbpd in September, down from 25.22 mbpd in August, according to LSEG.
- Russia’s average Urals price traded at an average $83.08 in September, well above the G7s $60 price cap.
- Turkey said oil flow through the pipeline from Iraq could resume this week. The pipeline carries half a million bpd of crude.
- US ISM Manufacturing PMI will be reported at 9:00 am CT.
- China’s manufacturing data showed expansion in September but a decline from August levels.
- European manufacturing data showed contractions for the Euro Zone, Germany, and Britain in September.
- Baker Hughes reported US oil rigs fell by 5 to 502. Last week.
- As of 8:00 am CST: Brent crude oil up $0.65 to $92.85, US dollar index up $0.352 to 106.578 while the nearby e-mini S&P 500 futures contract is down 9.25 to 4316.00.
Diesel
- Russia’s seaborne diesel and gasoil exports fell 27% in September, according to LSEG.
- Last week’s COT reported showed HO managed money traders increased their net length by 1,901 contracts to 38,061 contracts.
- Contracting manufacturing sectors in the US and Europe provide headwinds for diesel demand.
Gasoline
- Last week’s COT report showed RBOB managed money traders net sold 13,221 contracts and are net long 52,934 contracts.
- RBOB rejected sub-$2.40 today which may act as support this week.
Propane
- Conway is trading at .7000 while Belvieu is trading at .7250.
- Conway is trading at 32% of WTI.
- The US is exporting 78% of production as of 9/22/23.
Natural Gas
- Weekend weather runs added 4 HDDs and 2 CDDs through the two-week forecast.
- Baker Hughes reported nat gas rigs fell by 2 to 116 last week.
- US gas rigs are down 43 y/y.
US Petroleum Exports: US petroleum exports set a new record in the first half of 2023. Exports totaled 6 million bpd, up 2% from the same period in 2022. Propane was the most exported petroleum production at 1.5 mbpd for the first half of the year.
