Morning Highlights
Morning Highlights

1-24-23 Energies mixed ahead of EIA stats...

Riley Schwieger

Jan 24, 2024

Outlook: Energies are mixed to start the day with crude and gasoline inching higher while diesel lags behind near even. Another round of Chinese stimulus has been announced which will free up $140 billion to the market, however, a lack of economic improvement from previous actions will keep the market hesitant to react. Outside markets are showing strong again today with the S&P continuing to set fresh records and the US dollar is down over 700 points. The S&P Global Manufacturing PMI will be reported at 8:45 am CT to provide further direction here this morning. The EIA will report inventories at 9:30. The API survey showed conflicting sentiment with a sharp drop in crude but a large build in gasoline stocks.   

Crude

  • China’s central bank has taken more stimulus measures and will cut the amount of cash that banks must hold on reserves starting February 5th.
  • The Baltic Sea Ust-Luga terminal resumed fuel loadings yesterday. (Reuters)
  • The backwardation in WTI has been on the decline since the expiration of the Feb contract.
  • Outside markets and a low US dollar may be providing marginal support to energies today.
  • CME FedWatch is projecting nearly a coin flip for whether the Fed cuts rates during March.
  • The API surveys showed crude stocks fell by 6.6 million barrels last week.
  • Reuters estimates crude stocks fell by 3.0 million barrels last week.
  • The EIA will report inventories at 9:30 am CT.
  • As of 8:30 am CST: Brent crude oil down $0.44 to $79.99, US dollar index down $0.811 to 102.805 while the nearby e-mini S&P 500 futures contract is up 25.50 to 4920.00.

Diesel

  • Reuters estimates diesel stocks rose by 300,000 barrels last week.
  • The API survey showed diesel stocks fell by 245,000 barrels last week.

Gasoline

  • Reuters estimates gasoline stocks rose by 2.2 million barrels last week.
  • The API surveys showed gasoline stocks fell by 7.1 million barrels last week.
  • GasBuddy data suggests gasoline demand may have fallen to historic lows last week due to winter storm Gerri.

Propane

  • Conway is trading at .7750 while Belvieu is trading at .8275.
  • Conway Swap Oct24-Mar25 strip trading ~.7800.
  • Conway’s value to crude fell to 45% yesterday.

Natural Gas

  • Overnight weather runs added 5 HDDs in the two-week forecast.
  • LNG exports through the Suez fell to zero last week with 22 vessels heading around the Cape of Good Hope.. (BBG)
  • Reuters estimates nat gas stocks fell between 324-311 Bcf

March Daily WTI: