Outlook: Energies are starting the week off with mixed sentiment with crude and natural gas higher while refined products trade lower. Weekend developments felt relatively bullish but the market doesn’t want to run with it. China’s manufacturing showed expansion for the first time in six months in March which would be a supportive indication for energy demand if it becomes a trend. Additionally, early indications are that Saudi Aramco will again lift prices to Asian customers which may lend support. Refined product sales out in India reflected growth month-over-month while purchases of Russian oil remained steady to slightly higher. India has halted purchases of Venezuelan oil due to the impending expiration of US sanctions. The market may find firmer footing throughout the day as traders return from the holiday weekend
Crude
- India’s crude imports from Russia rose to 1.7 mbpd in March, registering 9% growth on month. India’s imports from Russia peaked at 2.2 mbpd last May. (BBG)
- US crude production fell in January to 12.5 mbpd, which was a 6% decline from record levels in January. (Reuters)
- Global crude in floating storage fell 19% w/w. (BBG)
- Saudi Arabia is expected to raise its price to Asian customers again which may signal demand growth.
- Baker Hughes reported US oil rigs fell by 3 to 506 last week.
- Chinese manufacturing PMI exceeded estimates and reflected growth with a reading of 50.8 over the weekend. Estimates expected minor contraction at 49.9.
- February PCE came in at 2.5% vs 2.5% est. and 2.4% last.
- As of 8:23 am CST: Brent crude oil down $0.06 to $86.94, US dollar index up $0.082 to 104.630 while the nearby e-mini S&P 500 futures contract is up 1.25 to 5309.00.
Diesel
- Russia plans to reduce its diesel exports from western ports in April to the lowest in five months.
- Russia stated over the weekend that they do not plan to ban diesel exports despite reported cutbacks.
- India’s March diesel sales rose 7.2% from February to March, according to state-owned refinery data.
Gasoline
- India’s gasoline sales rose 10% from February to March, according to state-owned refinery data.
Propane
- Conway is trading at .7875 while Belvieu is trading at .8250.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8350.
Natural Gas
- Overnight weather runs added 12 HDDs in the two week forecast.
- Natural gas stocks remain 41% above 10-year average levels.
- Egypt announced on Thursday they will begin looking to buy LNG due to fuel shortages expected this summer. They have not imported LNG since 2018.
- Baker Hughes reported nat gas rigs remained unchanged at 112 last week.
Russian Diesel Exports: Russia’s diesel exports are expected to fall from 724,000 bpd to 569,000 bpd from March to April.
