Outlook: Energies were soft early but have found a small boost from the US October CPI report this morning. Inflation declined by more than expected which may be supportive of a more dovish path from the Fed, which is positive for energy demand. Eurozone CPI data will be reported overnight tonight and US PPI data will follow in the morning for additional macro influence. For fundamentals, the IEA released its monthly report today which should increase for both 2023 and 2024 oil demand growth. The agency has viewed demand as overperforming this year which is somewhat contradictory to recent rhetoric from the industry. After a week off, we will get two weeks of EIA inventory data tomorrow. Reuters is estimating that crude and gasoline stocks rose last week while diesel stocks declined. The API will report its survey this afternoon.
Crude
- The IEA raised its 2023 oil demand growth forecast from 2.3 mbpd to 2.4 mbpd and its 2024 forecast from 880,000 bpd to 930,000 bpd, in its monthly report released today.
- Yesterday, the US announced plans to buy another 1.2 million barrels of oil to fill the SPR for January delivery.
- Iraq’s oil minister expects to reach an agreement with the Kurdistan Government to resume oil exports through the 450,000 bpd Turkish pipeline which has been shut down since March.
- The US is requesting information on 100 vessels suspected of transporting Russian oil above the price cap.
- US October CPI was reported at 3.2% vs 3.3% est. and 3.7% previous.
- Reuters estimates crude stocks rose 1.4 million barrels last week.
- The API will report its inventory survey today at 3:30 pm CT.
- As of 7:47 am CST: Brent crude oil up $0.28 to $82.79, US dollar index down $0.685 to 104.946 while the nearby e-mini S&P 500 futures contract is up 55.25 to 4480.00.
Diesel
- Reuters estimates diesel stocks fell by 1.8 million barrels last week.
- AAA forecasts a 6.6% increase in US Thanksgiving-related air travel this year.
- The diesel curve remains backwardated and favorable for contracting diesel needs for next year.
Gasoline
- Reuters estimates gasoline stocks rose by 1.3 million barrels last week.
- AAA forecasts a 1.7% increase in overall US Thanksgiving travel this week.
Propane
- Conway is trading at .6150 while Belvieu is trading at .6325.
- Conway Swap Oct24-Mar25 trading ~.7125.
- 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 added 10 HDDs through the two-week forecast.
- Freeport LNG exports are expected to decline by 6% today after dealing with power outages which started yesterday.
- Reuters estimates nat gas stocks rose between 22-43 Bcf last week.
Continuous Daily US Dollar: The US dollar has moved sharply lower, down over 600 points this morning following the release of the CPI report. A lower US dollar can lend support to dollar-based commodities as they become cheaper for non-dollar currency holders.
