Outlook: The energy complex is finding strength today with refined products leading the way. Refined buying may be a result of stockpiling ahead of the upcoming holiday weekend which is also supporting crack spreads. Crude prices remain in a very tight range after closing between $78 and $80 for 12 consecutive sessions. Chinese economic data looked positive overnight with industrial production showing growth. This comes after positive manufacturing data reported for the previous month which should all be supportive of demand growth. China’s refinery throughput fell in April but overall crude purchasing remains elevated as they look to refill reserves taking advantage of what they believe is favorable pricing. Natural gas prices continue to see momentum with Freeport feed gas demand hitting 5-month highs. Continuous daily natural gas futures closed above the 200-day moving average yesterday and have surged through $2.50 today trading up over 3%. Storage remains plentiful but expectations for a strong cooling demand season may help conditions normalize.
Crude
- Prompt Crude has closed within a two-dollar range for 12 consecutive sessions.
- Chinese industrial output rose 6.7% y/y in April.
- April Chinese refinery throughput fell 3.3% in April.
- China purchased over 30 million barrels for inventories over the past month, which is the fastest rate in a year.
- Rain and favorable winds have deterred fires from key oil-producing areas in Canada.
- Authorities have managed to contain a fire that started at Russia’s Tuapse oil refinery after a Ukrainian drone attack. (Reuters)
- Baker Hughes will report rig counts at 12:00 pm CT.
- OPEC+ will meet on June 1st and is expected to leave output unchanged.
- As of 8:53 am CST: Brent crude oil up $0.06 to $83.33, US dollar index up $0.213 to 104.677 while the nearby e-mini S&P 500 futures contract is down 1.25 to 5318.00.
Diesel
- Prompt diesel futures are trading above the 9-day moving average today.
- Gasoil stocks at Europe’s ARA hub rose 1% over the last week.
- Singapore middle distillate stocks fell 994,000 barrels to 10.115 million barrels and a two-month low.
Gasoline
- Prompt RBOB futures closed above the 9-day moving average yesterday.
- Gasoline stocks at Europe’s ARA hub fell 7.5% over the last week to their lowest level since January.
- Singapore light distillate stocks rose 150,000 barrels to a 2 week high of 15.256 million barrels.
Propane
- Conway is trading at .6600 while Belvieu is trading at .6725.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7200.
- 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 added 2 TDDs to the two-week forecast.
- Freeport LNG natgas flows have hit a 5-month high today.
- The EIA reported nat gas stocks rose 70 Bcf last week.
- At 2,663 Bcf, total storage remains 32% above 5-year average levels.
Continuous Daily HO:
