Morning Highlights
Morning Highlights

10-26-23 Energies slide while Q3 GDP beats estimates...

Riley Schwieger

Oct 26, 2023

Outlook: The reversal higher yesterday has all but been erased this morning with crude and products all lower. Risk premium was again pumped in yesterday with reports that the US asked Israel to delay its ground invasion so they could move key military operations to better positions. Regardless, another day has passed with no escalation and concerns appear to be fading as it relates to a potential energy disruption. Weakness today may be attributed to weaker spot markets for crude. Sweet crude varieties have fallen under pressure this week providing headwinds for the futures complex. The EIA also reinforced bearish sentiment showing crude builds in the US, including Cushing.  On the economic front, the ECB left interest rates unchanged as expected following the contracting data released earlier in the week. The US GDP for Q3 came in hot as the domestic economy continued to hold its ground against interest rate pressure. PCE data tomorrow could provide further influence on the energy space.             


  • Israel agreed to delay its ground invasion yesterday but made limited ground raids overnight.
  • Sweet crude varieties, which yield higher volumes for light fuels such as gasoline, have tumbled in price this week due to lower refining margins and higher freight rates.
  • The prompt crude spread has declined over 60 cents this week.
  • The ECB left interest rates unchanged at 4.5% today.
  • US Q3 GDP was reported at 4.9% vs 4.2% est.
  • The EIA reported crude stocks rose by 1.3 million barrels last week.
  • Cushing stocks rose 213,000 barrels to 21.2 million barrels last week.
  • As of 8:13 am CST: Brent crude oil down $1.66 to $88.47, US dollar index up $0.128 to 106.660 while the nearby e-mini S&P 500 futures contract is down 10.25 to 4200.00.


  • The EIA reported diesel stocks fell by 1.6 million barrels last week.
  • Diesel stocks remain 16.6 million barrels below 5-year average levels.
  • Diesel demand fell 7.9% w/w.


  • The EIA reported gasoline stocks rose by 156,000 barrels last week.
  • Gasoline stocks sit 2.4 million barrels above 5-year average levels.
  • Gasoline demand fell by 0.9% last w/w.


  • Conway is trading at .6400 while Belvieu is trading at .6550.
  • Conway Swap Oct24-Mar25 trading ~.7425.
  • Spot Conway is trading at 33% of WTI.
  • The US is exporting 71% of production as of 10/20/23.
  • The EIA reported propane stocks rose by 111,000 barrels last week.
  • Propane stocks sit 15.7 million barrels above 5-year average levels.

Natural Gas

  • Overnight weather runs added 4 HDDs through the two-week forecast.
  • Reuters estimates US natural gas stocks rose around 80 Bcf last week.
  • The EIA will report nat gas stocks at 9:30 CT.

Physical Crude: Physical crude prices have tumbled this week which may be weighing on the futures market. Light varieties preferred for gasoline production are facing the most pressure due to declining refining margins and elevated freight rates.