Outlook: Energy markets are positive today after the widely anticipated OPEC+ meeting this morning. OPEC+ announced cuts for 2024 will total around 2 million bpd, which includes the voluntary cuts from Saudi Arabia and Russia. The market is reacting surprisingly soft, which may be in part to headlines hinting toward this move throughout the week. There may also be confusion regarding what the total production cuts are relative to the cuts throughout 2023. If the total cut is actually 2 mbpd, this would translate to higher production than what we saw at the end of this year. OPEC usually publishes a press release following the meeting which should provide some clarity when it comes out. We’ll continue to monitor the situation and provide any new information as it comes out.
Crude
- OPEC+ has agreed to cut an additional 1 mbpd.
- Saudi Arabia and Russia will continue their voluntary cuts of 1.3 mbpd into 2024.
- Black sea loadings are on the recovery following the storm that disrupted 2 million bpd of exports this week.
- The EIA reported US crude stocks rose 1.6 million barrels last week.
- The US was a net exporter of 4.5 mbpd of crude oil and petroleum products last week, which was the most on record.
- US core PCE fell from 3.7% to 3.5% as expected in October.
- Chinese manufacturing will be reported tonight.
- As of 9:05 am CST: Brent crude oil up $0.99 to $84.09, US dollar index up $0.699 to 103.464 while the nearby e-mini S&P 500 futures contract is down 3.25 to 4556.00.
Diesel
- Russia’s oil product exports totaled 2.25 mbpd in the first 25 days of this month, up 160,000 bpd from October per Bloomberg.
- The EIA reported diesel stocks rose 5.2 million barrels last week.
- US diesel demand fell 26% last week to 3 mbpd.
- Today is LTD for December ULSD.
Gasoline
- The EIA reported gasoline stocks rose 1.7 million barrels last week.
- US gasoline demand fell 3.2% last week to 8.2 mbpd.
- The Nymex gasoline crack hit its highest level since September today.
- Today is LTD for December RBOB.
Propane
- Conway is trading at .6225 while Belvieu is trading at .6600.
- Conway Swap Oct24-Mar25 strip trading ~.7250.
- Spot Conway is trading at 34% of WTI.
- The EIA reported propane stocks fell by 534,000 barrels last week.
Natural Gas
- Overnight weather runs removed 3.5 HDDs through the two-week forecast.
- Since last Wednesday, weather forecasts have removed 38 HDDs from two-week forecasts.
- Reuters estimates natural gas stocks fell between 9 and 31 Bcf last week.
Continuous Daily WTI: WTI is challenging its 200-day moving average today following the announcement of additional OPEC+ cuts.
