Outlook: Energies have fallen under selling pressure today in what looks to be profit-taking ahead of the Fed meeting. Selling in April crude could also be attributed to rolling of long positions into cheaper deferred values with the contract set to expire today. While profit-taking could’ve been induced by fear of a hawkish Fed view due to strong economic data as of late, markets have also tipped overbought this week to provide technical motivations. The EIA inventory data will precede the Fed meeting and could provide further direction to prices. Industry expectations are pretty split for this report which could provide volatility if the fundamentals swing heavily in one direction. Seasonality would suggest products declined last week, however, estimates suggest diesel stocks rose last week. Demand both domestically and through exports will again be in focus.
Crude
- Russia’s seaborne crude exports fell by 730,000 bpd last week to 2.97 mbpd due to maintenance. The less volatile 4-week average fell 70,000 bpd to 3.28 mbpd.
- India’s February crude imports fell 6.6% y/y according to government data.
- Angola, who recently departed from OPEC, announced crude exports for May will fall to 1.04 mbpd, down from 1.09 mbpd in April.
- Reuters estimates crude stocks were unchanged last week.
- April WTI futures are set to expire today.
- The API reported crude stocks fell 1.5 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- The Fed will meet today to announce its rate decision and is expected to leave rates unchanged.
- The CME FedWatch tool suggests a 55% chance of a June rate cut.
- As of 8:11 am CST: Brent crude oil down $1.18 to $86.20, US dollar index up $0.412 to 104.106 while the nearby e-mini S&P 500 futures contract is down 4.25 to 5237.00.
Diesel
- Reuters estimates diesel stocks fell by 100,000 barrels last week.
- The API survey showed diesel stocks rose by 500,000 barrels last week.
- A larger diesel build today could reinforce weakness as it goes against seasonal trends.
- The prompt diesel spread has fallen below 2 cents today.
Gasoline
- Reuters estimates gasoline stocks fell by 1.4 million barrels last week.
- The API survey showed gasoline stocks fell by 1.6 million barrels last week.
Propane
- Conway is trading at .7775 while Belvieu is trading at .8250.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8350.
- Conway is trading at 39% value to WTI.
- OPIS estimates propane stocks fell by 340,000 barrels last week.
Natural Gas
- Overnight weather runs removed HDDs in the two week forecast.
- Temperatures through March 31st are expected to be cooler than average.
- Freeport LNG CEO Michael Smith announced at CERAWeek that maintenance is scheduled to conclude in May and will increase production capacity by 10%
- Reuters estimates natural gas stocks rose between 2 and 9 Bcf last week.
Continuous Daily HO:
