Outlook: The trend is certainly lower for energies as the market tumbles lower again this morning. Research from Goldman Sachs is showing elevated exports from OPEC countries participating in production cuts which may be supporting global inventories. Additionally, demand concerns are continuing to grow as hawkish comments from Fed officials have resurfaced this week. On the US front, the EIA’s STEO report released yesterday leaned mostly bearish for the 2023 data. We won’t see the official government data for weekly inventories this week however the API did release their survey yesterday afternoon which showed a healthy build for crude and diesel stocks last week. Look for comments from Fed Chair Jerome Powell later this morning to provide fresh influence.
Crude
- Seaborne net exports estimated by 6 OPEC countries, which are participating in production cuts of 2 mbpd since April, remain only 600,000 bpd below pre-cut export levels, according to Goldman Sachs.
- The EIA now expects US petroleum consumption to fall by 300,000 bpd in 2023 vs rise by 100,000 bpd in their previous forecast.
- Prompt WTI closed below its 200-day moving average yesterday.
- The EIA inventory stats for this week will be reported with next week’s data due to maintenance.
- Reuters estimates crude stocks fell by 300,000 barrels last week.
- The API survey showed crude stocks rose by 11.9 million barrels last week.
- As of 7:51 am CST: Brent crude oil down $0.59 to $80.72, US dollar index up $0.289 to 105.830 while the nearby e-mini S&P 500 futures contract is down 8.25 to 4375.00.
Diesel
- Reuters estimates diesel stock fell by 1.5 million barrels last week.
- The API survey showed diesel stocks rose by 980,000 barrels last week.
Gasoline
- The EIA is expecting a 1% decline in gasoline demand for 2024, which would be the lowest per capita demand in 20 years.
- Reuters estimates gasoline stocks fell by 800,000 barrels last week.
- The API survey showed gasoline stocks fell by 360,000 barrels last week.
Propane
- Conway is trading at .6125 while Belvieu is trading at .6275.
- Conway Swap Oct24-Mar25 trading ~.7150.
- Spot Conway is trading at 33% of WTI.
- The US is exporting 74% of production as of 10/27/23.
Natural Gas
- Overnight weather runs removed 1 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.
- The EIA increased their 023 US natural gas consumption forecast to 98.4 Bcf/d vs 89.2 Bcf/d previous and decreased their gas production forecast to 103.68 Bcf/d from 103.70 Bcf/d previous.
Continuous Daily HO: The nearby diesel contract is showing potential for a bearish indicator as it trades below its 200-day moving average for the first time since July.
