Outlook: The energy market seesaw looks to continue today with crude and products recouping yesterday’s losses. Natural gas is up over 50 cents MTD finding strength from significant HDD additions overnight. A large storm system is also making its way from central to eastern US this week which could increase heating demand but also stunt gasoline demand. The global fundamentals were also supportive overnight with reports that Russia is showing its commitment to its OPEC cuts with exports falling. Additionally, India’s demand continues to perform with a 6.2% m/m growth in fuel consumption for December. The overall market downtrend is being challenged again today but has yet to break out. With a technical wedge beginning to tighten, a breakout move could show up sooner rather than later but the magnitude should be expected to scale with fundamental impact.
Crude
- Russia has exported 3.34 mbpd of crude from its ports over the last 4 weeks, down 120,000 bpd from the previous period. Weekly declines reflect their 500,000 bpd OPEC commitment.
- India’s December fuel consumption rose to a seven-month high of 20.05 million metric tons, up 6.2% from November.
- Canada’s Trans Mountain Pipeline expansion is reportedly 95% complete and will expand the current pipeline capacity by 300,000 bpd when finished.
- Reuters estimates crude stocks fell 1.2 million barrels last week.
- The EIA will release its STEO today around noon.
- The API will report its inventory survey at 3:30 pm CT.
- As of 8:31 am CST: Brent crude oil up $1.48 to $77.60, US dollar index up $0.174 to 102.383 while the nearby e-mini S&P 500 futures contract is down 29.50 to 4772.00.
Diesel
- Reuters estimates diesel stocks rose 4 million barrels last week.
- Group 3 and Chicago diesel basis remains discounted and may present opportunities to fill storage and hedge by selling futures in your territory.
Gasoline
- Reuters estimates gasoline stocks rose by 4 million barrels last week.
- A massive storm system moving across the Eastern half of the US may put pressure on gasoline demand.
Propane
- Conway is trading at .6850 while Belvieu is trading at .6950.
- Conway Swap Oct24-Mar25 strip trading ~.7300.
- Propane should find strength today following crude and cold overnight weather revisions.
Natural Gas
- Overnight weather runs added 18 HDDs through the two-week forecast.
- Mid-January temps are expected to be colder than the 10-year average.
- Reuters estimates nat gas stocks fell between 104-111 bcf last week.
Continuous Weekly WTI: The 200-week moving average on the weekly WTI chart has provided consistent support since mid-March.
