Outlook: The energy complex is rebounding this morning with crude and products up on the day. The market has been flooded this week with fresh market drivers and is likely trying to find firm footing. Monthly reports were released by the EIA, IEA, and OPEC+ over the last 24 hours. OPEC+ left its demand forecasts unchanged while the EIA and IEA shifted growth out of 2024 and back into 2023. There remains a consensus that inventories will fall under pressure through the end of the year with demand outpacing supply. OPEC+ cuts are the primary driver of the deficit and the IEA sees their production at 540,000 bpd below current quotas. On the US fundamental front, the API posted a larger-than-expected crude build of 12.9 million barrels yesterday afternoon. Their survey also included a significant build in gasoline inventories which could indicate another week of softer demand. Bearish pressure could develop if the EIA confirms similar figures at 10:00 a.m. CT.
Crude
- US Treasury Secretary Janet Yellen said the US has not ruled out further oil sanctions against Iran.
- OPEC oil production rose by 273,000 bpd to 27.75 mbpd in September.
- OPEC+ left their oil demand growth forecasts unchanged at 2.44 mbpd for 2023 and 2.25 mbpd for 2024.
- The IEA cut its 2024 oil demand forecast by 120,000 bpd to 880,000 bpd while raising its 2023 demand forecast by 100,000 bpd to 2.3 mbpd.
- The IEA sees OPEC+ production 540,000 bpd short of their 36.92 mbpd quota.
- The API reported crude stocks rose by 12.9 million barrels last week.
- Reuters estimates crude stocks rose by 500,000 barrels last week.
- The EIA will report inventories at 10:00 am CT.
- The Fed minutes yesterday showed support for interest remaining higher for longer.
- US CPI was reported at 3.7% vs 3.6% est.
- As of 7:48 am CST: Brent crude oil up $1.54 to $87.36, US dollar index up $0.176 to 105.996 while the nearby e-mini S&P 500 futures contract is up 10.25 to 4402.00.
Diesel
- Reuters estimates diesel stocks fell by 800,000 barrels last week.
- The API survey showed diesel stocks fell by 3.5 million barrels last week.
Gasoline
- Reuters estimates gasoline stocks fell by 800,000 barrels last week.
- The API survey showed gasoline stocks for by 3.6 million barrels last week.
Propane
- Conway is trading at .6600 while Belvieu is trading at .6850.
- Conway Swap Oct24-Mar25 trading ~74.375c.
- Spot Conway is trading at 33% of WTI.
- The US is exporting 75% of production as of 9/29/23.
- OPIS estimates crude stocks rose by 543,000 barrels last week.
Natural Gas
- Overnight weather runs removed 5 HDDs through the two-week forecast.
- Dutch TTF is up 12% today and 32% on the week.
- The EIA released its Winter Fuels Outlook yesterday with expectations for a warmer winter and lower household spending.
- Reuters estimates nat gas inventories rose between 77-93 Bcf last week.
Continuous Weekly WTI: WTI is finding resistance at its 100-week moving average. A close above to end the week would be good news for the bulls.
