Outlook: After two consecutive strong risk on moves in the previous Fridays, traders seem less concerned about weekend risk regarding the conflict in the Middle East. Hezbollah’s leader is expected to give a speech later this morning which could give the market one last chance to assess a pre-weekend move. US economic data has shown weakness, specifically in the labor market with non-farm payrolls and unemployment falling outside of estimates. The market may be digesting “bearish” news as positive in the light that current interest rate levels are proving effective without a major breakdown. US services PMI will give us another data point at 9:00 a.m. CT. Weakening demand for energy appears to be the broader economic sentiment despite current production cuts providing headwinds for recent rallies.
Crude
- Russia’s scheduled oil exports from western ports were revised up to 2.23 mbpd in November, just below October levels.
- China’s independent refineries are expected to cut crude throughput in November in the absence of quotas.
- Chinese national oil company Petro China said they intend to buy 8 million barrels of Venezuelan oil per month after a 4-year halt of purchases.
- A private sector survey showed China’s service activity expanded slightly in October, but sales grew at the softest rate in 10 months.
- US nonfarm payrolls were reported at 150k vs 180k est. while unemployment rose to 3.9% vs 3.8% est. and 3.8% last.
- US October Services PMI will be reported at 9:00 am CT.
- Baker Hughes will report rig counts at 12:00 CT.
- As of 8:27 am CST: Brent crude oil up $0.19 to $87.04, US dollar index down $0.810 to 105.311 while the nearby e-mini S&P 500 futures contract is up 25.25 to 4361.00.
Diesel
- Russia’s seaborne diesel exports fell 11% in October.
- Russia sees oil and fuel exports down by more than 300,000 bpd in November.
- AAA reports the national average retail diesel price at $4.43, down 6 cents from last week.
- Singapore middle distillates rose 9% over the last week to a 3-week high.
Gasoline
- AAA reports the national average retail gas price at $3.44, down 8 cents from last week.
- Europe’s gasoline stocks rose 2.5% last week on slower exports.
- Singapore light distillates rose 8% over the last week to a 2-week high.
Propane
- Conway is trading at .6350 while Belvieu is trading at .6475.
- Conway Swap Oct24-Mar25 trading ~.7375.
- Spot Conway is trading at 33% of WTI.
- The US is exporting 71% of production as of 10/20/23.
Natural Gas
- Overnight weather runs removed 1 HDDs through the two-week forecast.
- The EIA reported nat gas stocks rose 79 Bcf yesterday.
- Total gas storage is 5.7% above 5-year average levels.
- Yesterday, the US imposed sanctions on Novatek PJSC’s Arctic LNG2 project which aimed to triple Russia’s LNG production by the end of the decade.
Continuous Daily DJIA: The Dow has had quite the week as it trades up over 1500 points heading into the weekend. Positive news for 401k’s out there but also a sign of economic confidence which can impact energies on a broader scale.
