Morning Highlights
Morning Highlights

2-21-24 Energies mixed ahead of Fed minutes release...

Riley Schwieger

Feb 21, 2024

Outlook: The energy complex is mixed to start the day ahead of the Fed minutes and API stats. Diesel remains the weak leg this week down over 2 cents and may be facing pressure from poor heating oil demand due to the warmer weather. Natural gas felt the weather-related pressure for nearly a month but has recently found support with prices falling below the cost of production. Chesapeake Energy announced a 20% cut in capex through rig count reductions yesterday, which is estimated to result in a gas production cut of 2.7 Bcf/d in 2024. Suppressed prices will continue to pressure producers to make cuts near-term. We’ll look for outside markets to provide influence through today’s session following the release of the Fed minutes. The CME FedWatch tool suggests a 68% chance rates will be left unchanged and a 30% chance of a 25 bps cut in May.  


  • Physical crude markets have strengthened with spreads widening over the past week.
  • Global crude in floating storage fell 19% last week to 73.18 mb according to Vortexa.
  • The Government Accountability Office found that oil and gas operators missed the one-year deadline to plug more than 40% of wells and remove 50% of platforms for Gulf leases that ended in 2010 through 2022. (BBG)
  • Canadian oil producers are expected to add 500,000 bpd of oil production this year as the Trans Mountain pipeline comes online.
  • FOMC minutes will be reported today at 1:00 pm CT.
  • The API will report its inventory survey at 3:30 pm CT.
  • Reuters estimates crude stocks rose by 4.3 million barrels last week.
  • As of 8:41 am CST: Brent crude oil down $0.14 to $82.20, US dollar index down $0.026 to 104.056 while the nearby e-mini S&P 500 futures contract is down 14.25 to 4978.00.


  • Reuters estimates diesel stocks fell by 1.8 million barrels last week.
  • Nearby HO closed below its 200-day moving average yesterday.
  • Diesel shipments from India into Europe are at their lowest since 2022 so far this month. (BBG)


  • Reuters estimates gasoline stocks fell by 3 million barrels last week.
  • Nearby RBOB closed below its 9-day moving average yesterday.
  • USDA Secretary Tom Vilsack said yesterday he is confident E15 gasoline will be available across the country in 2025.


  • Conway is trading at .8175 while Belvieu is trading at .9000.
  • Conway Swap Oct24-Mar25 strip trading ~.8000.
  • Conway propane is trading at 48% value to WTI.

Natural Gas

  • Overnight weather runs added 1 HDDs in the two week forecast.
  • Reuters estimates nat gas stocks fell between 65 and 82 Bcf.
  • A Chesapeake earnings report yesterday showed plans to cut capex by 20% and helped NG rally into yesterday’s close.

Continuous Daily NG: Natural gas is sharply higher today after finding strength late in yesterday’s session on Chesapeake production cuts.