Outlook: The energy complex is in positive territory this morning which could be the result of early profit-taking ahead of the weekend. Given the sharp move lower yesterday, those with bearish bets may be seeking coverage before looking to reposition. Today's uptick would hardly phase the downtrend unless supported by a significant bullish development. The opposite was reported this morning with Chinese Customs data showing crude imports down 13.3% m/m. Chinese demand remains sluggish, which is not ideal considering they were expected to account for nearly half of demand growth this year. On the macro front, both employment reports this week came in below expectations, reflecting a tighter labor market and lower costs. Nonfarm Payroll data can be a volatile report to end the cycle and will be closely watched when it's released at 7:30 am CT tomorrow.
Crude
- Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman released a statement this morning, urging all OPEC+ countries to join the group’s output cuts.
- Chinese November crude imports fell 13.3% from October according to customs data.
- The prompt weekly WTI contract is trading below its 200-week moving average this week.
- The EIA reported US crude stocks fell by 4.6 million barrels last week while stocks at Cushing rose 1.8 million barrels.
- Refinery utilization rose 0.7% to 90.5% and sits 0.5% above 5 year average levels.
- US net crude imports rose by 2 million bpd.
- US crude production fell by 100,000 bpd to 13.1 mbpd.
- US ADP Employment was reported at 103k for November vs 127k est.
- Nonfarm payrolls will be reported on Friday
- As of 8:05 am CST: Brent crude oil up $1.06 to $75.36, US dollar index down $0.444 to 103.709 while the nearby e-mini S&P 500 futures contract is up 12.25 to 4568.00.
Diesel
- The EIA reported diesel stocks rose by 1.2 million barrels last week.
- US diesel stocks are 14.6 million barrels below 5-year average levels.
- 4-week average diesel demand is 0.5% above year-ago levels.
Gasoline
- The EIA reported gasoline stocks rose 5.4 million barrels last week.
- US gasoline stocks are 1.1 million barrels below 5-year average levels.
- 4-week average gasoline demand is 1.1% above year-ago levels.
Propane
- Conway is trading at .6500 while Belvieu is trading at .6900.
- Conway Swap Oct24-Mar25 strip trading ~.7150.
- The EIA reported propane stocks fell by 1.7 million barrels last week.
- US propane stocks sit 13.8 million barrels above 5-year average levels.
Natural Gas
- Overnight weather runs removed 11 HDDs through the two-week forecast.
- Reuters estimates nat gas stocks fell between 70 and 107 Bcf last week.
- The EIA will report inventories at 9:30 am CT.
Continuous Daily NG: The prompt natural gas contract closed below its 200-day moving average this week. The removal of 11 HDDs overnight erased most of the anticipated demand added earlier this week.
