Outlook: The energy complex is seeing a marginal pullback after a strong session yesterday. Natural gas is the exception as it continues to whipsaw as it finds resistance at $3.00. Outside markets are also slipping after the S&P and NASDAQ hit record levels yesterday. OPEC released its monthly report this morning but didn’t reveal much for any new developments. They did move 50,000 bpd of production growth from Q2 to Q3 which could be viewed as lightly bearish in acknowledgement of delayed results. OPEC still holds the highest expectation for global demand growth over the next two years, largely on the back of Chinese demand. China will release its CPI data tonight to provide further insight into the health of its economy. Market moves may remain subdued today with the CPI and Fed meeting due tomorrow.
Crude
- OPEC released its monthly report this morning which left their demand growth forecast unchanged for 2024 and 2025 at 2.25 mbpd and 1.85 mbpd, respectively. OPEC remains the most bullish on demand growth among the big 3 agencies.
- OPEC reported may crude output rose 29,000 bpd to 26.63 mbpd.
- Russia fell short of its pledged production cuts by over 300,000 barrels in May. (BBG).
- Adam Rich of Vaughan Nelson expects US oil production to decline 1 mbpd by the second half of 2025 due to suppressed rig counts.
- The EIA will release its STEO report today around noon.
- Reuters estimates crude stocks fell 1.8 million barrels last week.
- The API will report its inventory survey today at 3:30pm CT.
- US CPI and PPI along with the Fed meeting are on the docket for tomorrow.
- As of 7:35 am CST: Brent crude oil down $0.32 to $81.31, US dollar index up $0.194 to 105.342 while the nearby e-mini S&P 500 futures contract is down 15.25 to 5355.00.
Diesel
- Prompt continuous HO closed above its 9-day moving average today.
- Reuters estimates diesel stocks rose 800,000 barrels last week.
- Over 10.5 million global flights are scheduled for 3Q, with International Air Transport Association anticipating a record passenger number for this year. (BBG)
Gasoline
- Prompt continuous RBOB futures closed above its 200-day moving average yesterday.
- Reuters estimates gasoline stocks rose 300,000 barrels last week.
Propane
- Conway is trading at .7150 while Belvieu is trading at .7375.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7800.
- Conway propane is trading at 39% to WTI.
Natural Gas
- Overnight weather runs were unchanged for the two-week forecast.
- Cash prices at Waha in West Texas rose above $1 yesterday for the first time in four months. (BBG)
- Reuters estimates nat gas stocks rose between 76 and 88 Bcf last week.
Continuous Daily RB: RBOB futures filled the roll gap in its selloff last week and are rebounding back above its 200-day moving average this week.
