Outlook: The energy complex is trading higher across the board today but remained glued to a tight range overall. Crude has closed with either a $78 or $79 handle in 11 consecutive sessions! Refined products have seen a little bit more wiggle room and held more of a downward bias but movements remained constrained by the steadiness of crude. Various technical indications have been ignored as it relates to breakouts and a lack of fresh market drivers has been the catalyst preventing a solidified trend. US demand remains soft which should be expected given the Fed's goal of taming inflation and a high interest rate environment. Demand in China and India, however, have perked up again which is helping offset the downturn in the US and Eurozone. OPEC+ is scheduled to meet in two weeks which could present the next shake-up. As it sits today, the expectation is that OPEC+ will maintain its current production cuts but their view on demand will ultimately solidify their decision.
Crude
- Nigeria’s new mega refinery is seeking to buy 2 million barrels per month of West Texas Intermediate Midland crude for 12 months starting in July.
- Israel’s prime minister said in an interview yesterday that their attack will not stop until the job is done. Ceasefire talks have reached a stalemate.
- Favorable winds are expected to keep the Canadian wildfire away from oil production over the next few days.
- WTI June options expire today.
- The EIA reported US crude stocks fell 2.5 million barrels last week.
- Refinery utilization rates rose above 90% for the first time since early January and crude input to refiners rose 307,000 bpd.
- US April CPI fell as expected in y/y prints for both core and headline.
- As of 8:24 am CST: Brent crude oil up $0.53 to $83.28, US dollar index up $0.198 to 104.943 while the nearby e-mini S&P 500 futures contract is down 1.25 to 5332.00.
Diesel
- The EIA reported diesel stocks fell 45,000 barrels vs +800,000 est.
- Be aware of your spot diesel basis with regional values falling to 5-year lows in group 3 and Chicago.
- Going long basis by filling storage and selling futures may be advantageous if you plan to carry product after planting.
Gasoline
- The EIA reported gasoline stocks fell 235,000 barrels vs +500,000 est.
- RBOB futures are finding support at the 100 and 200 day moving averages.
- India’s gasoline consumption in the first 15 days of May rose 11%. (BBG)
Propane
- Conway is trading at .6650 while Belvieu is trading at .6775.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7250.
- Conway propane is trading at 36% to WTI.
- The EIA reported propane stocks rose 2.875 million barrels vs +2.3 mb est.
Natural Gas
- Overnight weather runs removed 4 TDDs to the two-week forecast.
- Freeport LNG received about 85% of its maximum demand capacity yesterday.
- 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 WTI: Crude has closed between $78 and $80 for 11 consecutive sessions.
