Outlook: The energy complex is mixed this morning ahead of the EIA stats due out shortly. The API survey yesterday afternoon revealed another large build for crude stocks but that appears to be having little influence today. With refinery maintenance in full swing, larger crude builds accompanied by product draws is to be expected. On the geopolitical front, the US continues to retaliate against the Houthis in the Red Sea with another round of UAVs being shot down. Reports that progress is being made toward a ceasefire in Gaza is acting to keep markets at bay. For outside markets, equities are lower today coupled with a higher US dollar. US Q4 GDP was revised lower reflecting smaller growth than previously expected. The January PCE report due out tomorrow morning will be one to watch for as it represents a key inflationary measure for the Fed and its interest rate decisions.
Crude
- Yesterday, the US shot down 5 Houthi one-way attack UAVs in the Red Sea.
- Progress in ceasefire discussions are providing headwinds to energies.
- Crude is finding marginal support this week from reports stating expectations for OPEC to extend production cuts into Q2.
- Reuters estimates crude stocks rose 2.7 million barrels last week.
- The API survey showed crude stocks rose by 8.4 million barrels last week.
- The EIA will report its inventory survey this morning at 9:30 am CT.
- US Q4 GDP was revised lower from 3.3% to 3.2% this morning.
- US January Personal Consumption Expenditure will be reported tomorrow and is a key inflationary metric for the Fed.
- As of 8:39 am CST: Brent crude oil up $0.42 to $84.07, US dollar index up $0.167 to 103.996 while the nearby e-mini S&P 500 futures contract is down 16.25 to 5074.00.
Diesel
- US diesel shipments to Europe have fallen nearly 50% this month to 6.65 million barrels, down from 11.44 million barrels in January.
- Reuters estimates diesel stocks fell by 2.1 million barrels last week.
- The API survey showed diesel stocks fell by 500,000 barrels last week.
Gasoline
- Russia has announced a six-month ban on all gasoline exports starting March 1st to keep domestic prices stable during refinery maintenance.
- Reuters estimates gasoline stocks fell 1.5 million barrels last week.
- The API survey showed gasoline stocks fell by 3.3 million barrels last week.
Propane
- Conway is trading at .7850 while Belvieu is trading at .8500.
- Conway Swap Oct24-Mar25 strip trading ~.7900.
- OPIS estimates propane stocks fell by 2.1 million barrels last week.
Natural Gas
- Overnight weather runs removed 9 HDDs in the two week forecast.
- Gradual declines in output have helped support natural gas futures.
- Reuters estimates natural gas stocks fell by 77 and 95 Bcf last week.
Continuous Daily HO:
