Outlook: The energy complex is looking relatively idle this morning while diesel tries to pull away up around 5 cents. All eyes are on the Israel-Hamas war which continues to escalate. The US has said there is no evidence of Iran's involvement which would be the greatest risk to the energy complex. Iran’s crude production and exports have continued to grow despite ongoing US sanctions. The US has resumed talks with Venezuela but given the track record of any plan coming to fruition, the market does not appear to be considering a deal being reached. China continues to enact stimulus measures and if they begin to turn the corner, energy demand could pressure global stocks even further. The IMF recently reduced its growth forecast for China by 0.2% for 2023 and 0.3% for 2024. Look for the market to find more direction later this week as the war progresses and economic reports flow in.
Crude
- China is considering raising its 2023 budget deficit to support economic growth.
- The US has resumed talks with Venezuela to consider sanction relief of some oil exports.
- Russia is maintaining plans to increase refinery throughput this year.
- A White House spokesperson said the US has no intelligence or evidence that points to Iran’s direct participation in the Hamas-Israeli conflict.
- Israel’s port of Ashkelon and its oil terminals have been shut down for safety.
- A slight chance for a tropical disturbance has developed in the Gulf of Mexico.
- Reuters estimates crude stocks rose by 1.3 million barrels last week.
- Fundamental reports are delayed by a day this week due to the Monday holiday.
- As of 8:12 am CST: Brent crude oil down $0.44 to $87.71, US dollar index down $0.093 to 105.995 while the nearby e-mini S&P 500 futures contract is up 7.25 to 4375.00.
Diesel
- Reuters estimates diesel stocks fell by 1.4 million barrels last week.
- Russia’s lifting of its diesel export ban frees up around 630,000 bpd of exports.
- Prompt diesel is back above $3.00 today.
Gasoline
- Reuters estimates gasoline stocks fell by 1.9 million barrels last week.
- RBOB cracks remain under pressure amidst weak demand and recovering supply.
Propane
- Conway is trading at .6700 while Belvieu is trading at .6875.
- Conway is trading at 33% of WTI.
- The US is exporting 75% of production as of 9/29/23.
Natural Gas
- Overnight weather runs removed 1 HDDs through the two-week forecast.
- Chevron’s Australian LNG Union will resume strikes next week.
- Dutch TTF is up over 9% again this morning after Israel ordered Chevron to stop production at their Tamar platform for safety. The platform represents 1.5% of global supply.
Hurricane Watch: The hurricane season is winding down, but we aren’t out of the woods yet. There is a 30% chance of a cyclone formation in the next 7 days in the Gulf. The current path looks like it could impact refining and crude rigs if it develops.
