Outlook: Crude and refined products are nudging higher this morning while natural gas is down nearly 5%. The oil market found optimism yesterday with Saudi Arabia and Russia confirming an extension of their production cuts through the end of the year. They had previously announced their commitment to cuts through the end of the year but there were rumors swirling that each may be growing tired of the voluntary losses. A more sensitive decision will come when they determine if cuts will extend into 2024. There were no major escalations in the Middle East however there are reports that Iranian crude exports fell in October. The US is taking measures for stricter enforcement of the current sanctions against Iranian oil but it's unclear if the recent decline is directly related to that. Macroeconomic reports are light to start the week but China will release its trade data for October later this evening.
Crude
- Saudi Arabia confirmed on Sunday that they will continue their voluntary 1 mbpd production cut through December.
- Iranian oil exports fell 194,000 bpd in October, according to Tanker Trackers.
- Russia also announced it will continue its 300,000 bpd cut through December.
- Chinese import/export data will be reported tonight.
- China is expected to process 15.1 mbpd of crude in November, down from 15.4 mbpd in October.
- India’s oil demand rose 3.7% in October.
- Global crude in floating storage fell by 6.7% last week per Vortexa.
- Baker Hughes reported US oil rigs fell by 8 to 496 last week.
- As of 7:25 am CST: Brent crude oil up $1.04 to $85.93, US dollar index down $0.030 to 105.051 while the nearby e-mini S&P 500 futures contract is up 3.25 to 4379.00.
Diesel
- India’s diesel sales rose by 9.7% in October.
- Last week’s COT report showed HO managed money traders reduced their net length by 495 contracts to 32,124 contracts.
Gasoline
- India’s gasoline sales rose 4.8% in October.
- Last week’s COT report showed RBOB managed money traders added 10,156 contracts and are net long 39,528.
Propane
- Conway is trading at .6250 while Belvieu is trading at .6350.
- Conway Swap Oct24-Mar25 trading ~.7325.
- Spot Conway is trading at 33% of WTI.
- The US is exporting 74% of production as of 10/27/23.
Natural Gas
- Weekend weather runs removed 10 HDDs through the two-week forecast.
- The beginning of November is forecast to be warmer than the 10-year average.
- Total gas storage is 5.7% above 5-year average levels.
- Baker Hughes reported nat gas rigs rose by 1 to 118 last week.
Continuous Daily NG: Prompt natural gas gapped lower last night as weekend weather revisions came in significantly lower. HDDs can swing in a wide range in the shoulder seasons and bearish demand is more sensitive given the current domestic supply glut.
