Outlook: Energies are sliding lower again this morning, partially pressured by a much larger-than-expected crude build reported from the API yesterday afternoon. The build of over 9 million barrels was over 10 million barrels off from the Reuters median estimate. Gasoline stocks are looking at anonymous expectations for another stock draw while diesel is expected to rise marginally. With refinery utilization expected to remain in recovery, a backlog of crude supplies would likely come from a decline in exports. While BP’s Whiting Refinery has returned to full operation, reports that Exxon Mobil’s Joliet, IL refinery will undergo a 50-day maintenance cycle soon. The refinery produces a combined 9 million barrels of gasoline and diesel daily and could pressure the Chicago region but also trickle into neighboring regions if supplies tighten.
Crude
- JPMorgan expects Brent crude to reach $100 this year.
- Reuters estimates crude stocks fell by 1.3 million barrels last week.
- The API survey showed crude stocks rose by 9.3 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- February PCE, which is a key inflationary indicator, will be reported on Friday while markets are closed.
- As of 8:30 am CST: Brent crude oil down $0.47 to $85.76, US dollar index up $0.133 to 104.424 while the nearby e-mini S&P 500 futures contract is up 27.25 to 5292.00.
Diesel
- Reuters estimates diesel stocks rose 500,000 barrels last week.
- The API survey showed diesel stocks rose by 500,000 barrels last week.
- The forward curve in diesel have moved relatively flat from the July-Nov contract.
- Thursday is LTD for April HO.
Gasoline
- Reuters estimates gasoline stocks fell by 1.7 million barrels last week.
- The API survey showed gasoline stocks fell by 4.4 million barrels last week.
- Thursday is LTD for April RBOB.
Propane
- Conway is trading at .7900 while Belvieu is trading at .8325.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8450.
- OPIS estimates propane stocks rose by 461,000 barrels last week.
Natural Gas
- Overnight weather runs removed 6.5 HDDs in the two week forecast.
- 2 of 3 trains at Freeport LNG are being shut down for maintenance through May.
- Reuters estimates natural gas stocks fell between 24 and 32 Bcf last week.
- The continuous daily natural gas chart gapped higher with the expiration of the April contract yesterday.
Continuous Daily HO: Diesel is testing trendline support today.
