Outlook: Energies are under heavy pressure again today likely driven by another round of fund selling. The CPI data came and went without any surprises but even a small decline in y/y inflation wasn’t supportive enough to shift broader sentiment. Even a missile striking a tanker in the Red Sea overnight has left traders unphased. China remains the key demand driver and recent reports have been mixed which leans bearish given the lofty expectations. Without an unplanned supply disruption or another round of cuts from OPEC, the market is going to have a tough time bucking this downtrend. WTI found support near $67 when it sold off through June this year and that will be the key area to see if a bottom develops.
- A lopsided supply and demand view continues to control the downtrend in energies.
- Bloomberg reported a tanker in the Red Sea was struck by a Houthi-launched missile.
- The Chinese government is allowing independent refineries to apply 2024 crude import quotas this year to bring in oil and ease tightened stocks by year-end.
- Reuters estimates crude stocks fell by 1.5 million barrels last week.
- The API will report its inventory survey today at 3:30 pm CT.
- US November CPI was reported at 3.1% vs 3.2% previous.
- The Fed will announce its interest rate decision tomorrow.
- As of 8:27 am CST: Brent crude oil down $1.83 to $74.20, US dollar index down $0.283 to 103.813 while the nearby e-mini S&P 500 futures contract is down 5.25 to 4620.00.
- Regional diesel basis remains soft throughout the country and the backwardation in the prompt spread continues to fall. Both are favorable for filling storage and selling futures to hedge.
- US diesel exports to Europe have hit a record levels as delays through the Panama Canal prevent product from moving to the west coast of South America.
- Reuters estimates diesel stocks rose by 1.2 million barrels last week.
- Reuters estimates gasoline stocks rose by 2.4 million barrels last week.
- Nearby RBOB is testing support at $2.00 today.
- Conway is trading at .6450 while Belvieu is trading at .6825.
- Conway Swap Oct24-Mar25 strip trading ~.7200.
- Propane values for next year remain favorable for establishing early length if you haven’t already.
- Overnight weather runs added 1 HDDs through the two-week forecast.
- December is on track for its warmest level since 1990.
- Reuters estimates natural gas stocks fell between 77 and 44 Bcf last week.
Continuous Daily WTI: