Morning Highlights
Morning Highlights

2-20-24 Refined products fall while crude rallies into expiration...

Riley Schwieger

Feb 20, 2024

Outlook: Energies are mixed in continuation from yesterday’s holiday session with crude higher and products lower. March crude is catching a bid on LTD while the April contract remains down on the day. As a result, the prompt crude spread is trading back above $1.50 which is the highest since early October. Refined products are holding a weaker tone, possibly in anticipation of refinery maintenance season turning the corner. Crack spread have also begun to fall from their recent rally at multi-month highs. Headlines over the weekend and through today have felt bullish with ongoing geopolitical risks, Chinese stimulus, and declining exports out of Russia, but demand concerns remain a strong countervailing force. While Chinese stimulus looks supportive at a glance, it also acknowledges that previous stimulus measures have been ineffective thus far. The US dollar is down nearly 500 points today but showing little influence on energies. The Fed will release its meeting minutes tomorrow afternoon to shed fresh light on rate cut expectations.


  • The Houthis have hit four vessels since Friday, with one ship evacuated due to the risk of sinking.
  • Russia’s seaborne crude shipments fell for the second week by 360,000 bpd to 3.13 mbpd. The decline puts exports 150,000 bpd below pledged OPEC+ cuts.
  • Tourism revenue in China rose 47.3% y/y during the Lunar New Year holiday last week.
  • China made a record cut to a benchmark reference rate for mortgages at a monthly fixing today. (Reuters)
  • WTI net spec and fund long remains near 12-year lows.
  • The prompt WTI spread is sharply higher again today ahead of the March expiration.
  • Today is LTD for March WTI futures.
  • FOMC minutes will be reported tomorrow at 1:00 pm CT.
  • Fundamental reports are delayed by a day this week due to the Monday market holiday.
  • As of 8:48 am CST: Brent crude oil down $0.28 to $83.28, US dollar index down $0.444 to 103.848 while the nearby e-mini S&P 500 futures contract is down 27.25 to 4991.00.


  • Nymex heating oil net length rose by 10k lots last week, the most since 2020.
  • Nearby HO is testing support at its 200-day moving average today.


  • Nymex RBOB net length rose by 5,183 positions to 62,140 last week.
  • The prompt Nymex RBOB contract has fallen back below $20 after peaking over $23 last week.


  • Conway is trading at .8575 while Belvieu is trading at .9225.
  • Conway Swap Oct24-Mar25 strip trading ~.8100.
  • Conway propane is trading at 48% value to WTI.

Natural Gas

  • Overnight weather runs removed 8 HDDs in the two week forecast.
  • US natural gas rigs were unchanged last week at 121.
  • Prompt NG set fresh contract lows to start the week at $1.522.

Jet Fuel Demand: This week, flight schedules suggest jet fuel demand will increase by 3% to 6.3 mbpd. Asia, North America, and Western Europe are expected to drive over 80% of growth.