Outlook: The energy complex is taking a softer tone today and could be the result of profit-taking ahead of the weekend. Despite markets slipping today, energies are on pace for weekly gains finding momentum from geopolitical threats and a tightening marketplace. Ukraine continues to target Russian oil infrastructure and it is estimated that roughly 7% of crude processing is offline. While diesel exports are on the decline due to lower output, crude exports may move in the opposite direction as they look to move excess product. Further escalation will be worth keeping an eye on over the weekend with Russian retaliation expected.
Crude
- Ukraine attacked another Russian oil refinery in the Kaluga region overnight.
- Russia's oil refinery capacity idled by drone attacks in Q1 were seen at 370,500 bpd.
- Continuous WTI closed above $80 for the first time since November 6th.
- The US dollar has seen a strong rebound this week but shed little pressure on momentum in energies.
- Michigan Consumer Sentiment came in below estimates this morning.
- Baker Hughes will report rig counts at 12:00 pm CT.
- As of 9:00 am CST: Brent crude oil down $0.55 to $84.82, US dollar index up $0.046 to 103.403 while the nearby e-mini S&P 500 futures contract is down 37.25 to 5101.00.
Diesel
- Gasoil stocks at Europe’s ARA hub rose 3.6% on week.
- Singapore middle distillate stocks rose 797,000 barrels to a 2.5 year high of 10.7 million barrels on week.
Gasoline
- Gasoline stocks at Europe’s ARA hub were relatively unchanged on week.
- Singapore light distillate stocks rose 1.03 million barrels to 15.873 million barrels on week.
Propane
- Conway is trading at .7275 while Belvieu is trading at .7875.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7875.
- US propane stocks saw a larger than expected build of 678,000 barrels last week.
- Stocks found relief from a 26% drop in exports last week.
Natural Gas
- Overnight weather runs removed 1 HDDs in the two week forecast.
- The EIA reported a 9 Bcf draw for last week.
- Natural gas stocks are 629 Bcf above 5-year average levels.
Russian Diesel Exports: Russian diesel exports are showing declines since Ukrainian drone strikes began targeting refineries. Fear of an export embargo is a bullish event the market is keeping in the back of its mind.
