Outlook: Crude, gas, and diesel are all slipping lower today, and from a technical standpoint, all trade below their 9-day moving averages. The bearish trend is feeling strong, not necessarily in the way of big moves lower, but more so in the way of squashing any bullish sentiment that develops. Energies found a pop on a friendly CPI print today but that rally quickly faded. The friendly CPI is being partially offset by the more hawkish PPI print yesterday, which at some point, is expected to be passed along to the consumer which could put pressure on inflation. The market looks to be feeling like there’s a long road ahead and this economic pressure is acting like a weighted blanket on the energy complex. Geopolitical risk concerns have become stale and despite military advancements in Rafah, the continued lack of spillover has tamed supply disruption fears. Red Sea attacks have also grown quiet although shipping traffic still remains suppressed. Markets will look for fresh direction from today’s EIA report with industry estimates lacking conviction.
Crude
- The IEA released it monthly report this morning which left 2024 global oil demand unchanged at 103.2 mbpd. 2024 oil demand growth was revised lower by 140,000 bpd but mostly due to a higher revision of 2023 global oil demand.
- OPEC+ is expected to hire an external consultant to review production capacity of its members. These figures have felt outdated as they reflect pre-pandemic levels.
- Reuters estimates crude stocks fell 0.5 million barrels last week.
- The API survey showed crude stocks fell 3.1 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- US April PPI ran hot showing 0.5% m/m growth vs 0.3% est.
- As of 8:44 am CST: Brent crude oil down $0.84 to $81.54, US dollar index down $0.403 to 104.610 while the nearby e-mini S&P 500 futures contract is up 26.25 to 5295.00.
Diesel
- The API survey showed diesel stocks rose 300,000 barrels last week.
- Reuters estimates diesel stocks rose 800,000 barrels last week.
- Group 3 and Chicago diesel basis have slipped to 5-year lows.
Gasoline
- The API survey showed gasoline stocks fell 1.3 million barrels last week.
- Reuters estimates gasoline stocks rose 500,000 barrels last week.
Propane
- Conway is trading at .6725 while Belvieu is trading at .6850.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7325.
- Conway propane is trading at 36% to WTI.
- OPIS estimates propane stocks rose 2.3 million barrels last week.
Natural Gas
- Overnight weather runs added 4 TDDs to the two-week forecast.
- Freeport LNG has announced all three trains are back in service.
- Reuters estimates natural gas stocks rose between 72 and 78 Bcf last week.
- The EIA will report inventories on Thursday at 9:30 am CT.
Continuous Daily RBOB: RBOB futures are running into a wall of support near the convergence of the 100 & 200 day moving averages. RBOB is showing respect to these levels resisting a downside move similar to crude and diesel today.
