Outlook: Energies are on pace for a weekly gain this week but broader trendlines would suggest the downtrend remains intact. Expect very light trade today as participants head out early ahead of the holiday weekend. There’s a lack of fresh energy-related headlines this morning but we did see US Personal Consumption Expenditures for November reported on the macroeconomic side this morning. The PCE data showed an increase of 2.6% YoY for the headline number and Core showed an increase of 3.2% YoY. Both came in below estimates and both showed declines from the previous month. This report is another key measure of inflation and the lower prints should be seen as progress from the Fed’s lens. We’ll get Michigan Consumer Sentiment at 9:00 am CT for the last report to send us off into the weekend.
Crude
- For the week energies found strength on Red Sea concerns and positive economic sentiment.
- Angola left OPEC this week over disputes regarding production quotas. The country is producing 1.1 mbpd but has an on-paper capacity of around 1.8 mbpd.
- The US dollar broke out lower yesterday trading down over 500 points and is down another 200 points this morning.
- Baker Hughes reported US oil rigs counts fell by 3 this week.
- US Core PCE rose 3.2% in November vs 3.3% est and 3.4% previous.
- As of 8:00 am CST: Brent crude oil up $0.71 to $80.10, US dollar index down $0.242 to 101.597 while the nearby e-mini S&P 500 futures contract is up 10.25 to 4807.00.
Diesel
- Gasoil stocks at Europe’s ARA hub fell to 714 tonnes from 728 tonnes the week prior.
- Singapore middle distillate stocks fell 560,000 barrels to a 4 month low of 8.081 million barrels over the last week.
Gasoline
- Gasoline stocks at Europe’s ARA hub fell to 983 tonnes from 1.053 million tonnes the week prior.
- Singapore light distillate stocks rose 1.8 million barrels to a 5-week high of 13.3 million barrels over the last week.
Propane
- Conway is trading at .6450 while Belvieu is trading at .6750.
- Conway Swap Oct24-Mar25 strip trading ~.7300.
- The EIA reported a larger than expected draw of 2.2 million barrels for propane stocks last week.
Natural Gas
- Overnight weather runs added 2 HDDs through the two-week forecast.
- Record breaking high temperatures are possible throughout the Midwest over the next 7 days.
- The prompt contract is down over 20% MTD.
- The EIA reported a larger than expected draw of 87 Bcf yesterday.
Angola Crude Production Vs Quota: The blue line represents current production and the white line represents its now former OPEC quotas.
