Outlook: Energies are coming out of the holiday weekend with some upside momentum except for natural gas which continues to face weather-related headwinds. Shipping concerns in the Red Sea are weighing on prices due to longer alternate routes delaying deliveries. Attacks in the Red Sea have remained steady and these delays may be priced longer. Russia announced at the end of last week that it intends to cut its seaborne exports by another 100-200,000 bpd from its December levels to add to the bullish sentiment. Trade will likely remain thin this week with many traders out on holiday which could leave the market susceptible to volatile swings with the right development. Fundamental reports will be delayed by a day this week and macroeconomic data will be light until a fresh jobs report on Thursday.
- Russia plans to cut seaborne oil exports in January by 100,000-200,000 bpd.
- Russia’s crude processing rate is running at its highest level in 8 months through December at 5.57 mbpd.
- Iraq, Nigeria, and the Republic of Congo issued a public statement affirming their commitment to OPEC following Angola’s recent exit.
- Ships continue to take extensive detours to avoid the Red Sea which is delaying delivery of crude.
- Baker Hughes reported US crude oil rigs fell by 3 last week to 498.
- The EIA and API reports will be delayed by a day due to the Monday holiday.
- 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.
- Prompt Diesel futures rose ~3 cents last week.
- Nymex heating oil length decreased by 1.2k lots last week.
- Prompt gasoline futures fell half a cent last week.
- Nymex gasoline length increased by 10k lots last week.
- Conway is trading at .6450 while Belvieu is trading at .6750.
- Conway Swap Oct24-Mar25 strip trading ~.7300.
- Overnight weather runs removed 9 HDDs through the two-week forecast.
- The prompt contract rose 12 cents last week after the EIA reported a larger-than-expected draw.
- Baker Hughes reported nat gas rigs rose by 1 to 120.
Continuous Daily HO: