Outlook: Crude and gasoline are lower this morning while diesel hovers near even. The bullish sentiment driven by the chance of OPEC deepening production cuts has faded slightly today with bets not favoring no adjustment. This projection may be volatile this week and looks to be the key market driver ahead of the Sunday meeting. Weekly crude options are available for those who may want to take a position ahead of or just after the meeting this weekend. On the macro front, the Fed meeting minutes will be released this afternoon. Economic data recently could suggest a shift to a more dovish tone, however, previous meetings have leaned hawkish. The EIA will report inventories on schedule this week. Reuters poll is suggesting crude and gas stocks saw builds last week while diesel saw a small decline. The API will report its survey this afternoon at 3:30 pm CT.
- Russia’s seaborne crude exports on a 4-week average basis fell by 200,000 bpd last week to 3.23 mbpd.
- China imported 8.54m tons of oil from Russia in October, down 2.3% from September.
- The CME’s OPEC Watch Tool has shifted to a 66% chance OPEC leaves production cuts unchanged on Sunday. Yesterday, it was a 53% chance of further cuts.
- Iran said they expect their oil production to reach 4 mbpd in 2024-2025 after rising to 3.6 mbpd this year.
- Reuters estimates crude stocks rose by 1.5 million barrels last week.
- The API will report its inventory survey at 3:30 pm CT today.
- The FOMC minutes will be released at 1:00 pm CT today.
- As of 8:10 am CST: Brent crude oil down $0.72 to $81.60, US dollar index down $0.102 to 103.336 while the nearby e-mini S&P 500 futures contract is down 12.25 to 4550.00.
- Reuters estimates diesel stocks fell by 600,000 barrels last week.
- Nymex prompt diesel closed back above its 200-day moving average yesterday.
- Group 3 diesel basis fell 10 cents yesterday to -23c.
- Reuters estimates gasoline stocks rose by 400,000 barrels last week.
- The Nymex gasoline crack settled at its highest level since September yesterday.
- Conway is trading at .6300 while Belvieu is trading at .6600.
- Conway Swap Oct24-Mar25 strip trading ~.7200.
- Spot Conway is trading at 34% of WTI.
- Overnight weather runs added 5 HDDs through the two-week forecast.
- Reuters estimates natural gas stocks rose between 4 and 31 Bcf last week.
- Nymex daily natural gas is finding support near its 100-day moving average at $2.841.
WTI Prompt Spread: Before the expiration of the December WTI contract, the contango in the prompt spread widened out to 35 cents. These market conditions indicate ample spot supply which contradicts the current inventory situation at the delivery point for WTI in Cushing.