Outlook: Energies remain in a downtrend as we work into the back half of the week with crude and products lower across the board. Diesel and natural gas have been the loss leaders over the last two weeks facing headwinds from bearish weather forecasts and low demand. Fundamental projections from Reuters and the API are leaning bearish ahead of the EIA report later this morning. Crude stocks are expected to see another build along with diesel while gasoline estimates sit on both sides. Refinery utilization is expected to make a small recovery but still remains well below 5-year average levels for this time period. Demand will continue to be a key indication of economic health and consumer travel. Outside markets are strong but shedding little influence on energies at the moment. The S&P is up over 60 points, possibly drafting support from the blockbuster Nvidia earnings exceeded expectations yesterday afternoon.
Crude
- India’s crude imports in January hit a 21-month high increasing 9.5% m/m to 21.39 metric tons. (Reuters)
- The US conducted four strikes against seven mobile Houthi anti-ship cruise missiles and one mobile anti-ship ballistic missile launcher this morning. (BBG)
- Yesterday, Guyana said it will not approve oil exploration in water near Venezuela until the UN rules on the country's borders. (BBG)
- FOMC minutes yesterday showed officials remain cautious about lifting interest rates too early and rate cut bets slid further back with the first cut expected in June.
- Reuters estimates crude stocks rose by 4.3 million barrels last week.
- The API survey yesterday showed crude stocks rose by 7.1 million barrels last week.
- The EIA will report inventories at 10:00 am CT.
- As of 8:30 am CST: Brent crude oil down $0.58 to $82.46, US dollar index up $0.055 to 104.059 while the nearby e-mini S&P 500 futures contract is up 61.25 to 4978.00.
Diesel
- Reuters estimates diesel stocks fell by 1.8 million barrels last week.
- The API survey yesterday showed diesel stocks fell by 2.9 million barrels last week.
- The Nymex heating oil crack has slid to its lowest level since July.
- In 2023 Coals percentage of power generation fell to 15.8% while natural gas rose to 43%.
Gasoline
- Reuters estimates gasoline stocks fell by 3 million barrels last week.
- The API survey yesterday showed gasoline stocks fell by 415,000 barrels last week.
- The Nymex gasoline crack has risen to its strongest level since August.
Propane
- Conway is trading at .7975 while Belvieu is trading at .8750.
- Conway Swap Oct24-Mar25 strip trading ~.8000.
- Conway propane is trading at 48% value to WTI.
Natural Gas
- Overnight weather runs removed 1 HDDs in the two week forecast.
- Reuters estimates nat gas stocks fell between 65 and 82 Bcf.
- The EIA will report inventories at 9:30 am CT.
Continuous Daily HO: Negative momentum has diesel futures breaking through multiple technical support this week.
