Outlook: The complex is off to a slow start this week with the exception of natural gas which is down nearly 10 cents this morning. Crude and oil productions are mixed with WTI lower and gas and diesel up over a penny. On Friday, reports were that OPEC+ had made progress with the two African countries involved in the quota dispute that caused the meeting to be delayed until Thursday. Additionally, a temporary ceasefire between Israel and Hamas has added bearish pressure. The CME OPEC watch tool suggests a 70% chance OPEC will leave production unchanged on Thursday. The meeting will also be held virtually which has hinted towards no adjustments in the past. Macroeconomic drivers may be light to start the week but the market may look for direction from early consumer spending and travel from last week which was projected at record levels.
Crude
- Global crude in floating storage fell by 2.9% last week according to Vortexa.
- China announced they will raise their 2023 fuel oil import quota for 2023 by 3mm mt for non-state enterprises.
- Iraq is targeting 6.5 mbpd for oil output by 2028 while staying within OPEC output limits.
- OPEC+ has delayed its policy meeting from November 26th to November 30th.
- US crude stocks rose by 8.7 million barrels in the week ending 11/17.
- US crude production remains steady at a record 13.2 mbpd.
- As of 8:15 am CST: Brent crude oil down $0.27 to $80.31, US dollar index down $0.077 to 103.327 while the nearby e-mini S&P 500 futures contract is down 10.25 to 4557.00.
Diesel
- Diesel stocks fell 1 million barrels in the week ending 11/17.
- US diesel demand remained steady ay 4.1 mbpd during the same period.
- Gasoline stocks rose 750,000 barrels in the week ending 11/17.
- Gasoline demand fell by 5.2% to 8.4 mbpd during the same period.
Propane
- Conway is trading at .6250 while Belvieu is trading at .6450.
- Conway Swap Oct24-Mar25 strip trading ~.7200.
- Spot Conway is trading at 34% of WTI.
Natural Gas
- Weekend weather runs removed 3 HDDs through the two-week forecast.
- Natural gas storage is 7% above 5-year average levels to start the heating season.
- Low water levels in the Panama Canal continues to create logistical issues for exporting LNG out of the US.
Monthly WTI: The 2023 high looks to be locked in during September with two consecutive monthly declines in progress. $95.03 will be the high to beat which will be a tough task for the final month of the year.
