Outlook: Energies are starting the day higher across the board with diesel leading the pack up 3 cents. Diesel has had quite the month as it trades nearly 30 cents off its low from earlier this month to its highest level since April. Gasoline prices have been on a similar path as they garner seasonal strength despite disappointing demand data. Crude is beginning to develop a fresh trade range in the low $80s which is around $2 dollars higher than the zone traded throughout nearly the entirety of May. With peace talks falling apart in the Middle East, a heightened geopolitical risk environment may be the catalyst for additional premium relative to the May trade. Economic woes have been kept at bay, holding up under the stress of elevated interest rates. Q1 GDP received a slight revision higher this morning while quarterly PCE data reflected higher-than-expected inflation. The monthly PCE data, which garners more attention, may set the tone with how markets finish heading into the weekend.
Crude
- Iraq exported 3.36 mbpd of oil in May, down from 3.413 mbpd in April. Iraq pledged to cut exports starting in March to make up for overproduction in their OPEC quota.
- Chinese President Xi Jinping will convene senior officials from July 15th to 18th for a delayed conclave that’s expected to set long-term policy on a wide range of economic and political issues. (BBG)
- The EIA reported crude stocks rose by 3.5 million barrels last week.
- Refinery utilization rates fell 1.3% while input to refiners fell 233,000 bpd.
- US 1Q GDP was revised higher by 0.1% to 1.4%.
- Q1 Core PCE was reported at 3.7% vs 3.6% est.
- US monthly Personal Consumption Expenditures Index, which is the Fed’s preferred measure of inflation, will be reported tomorrow.
- As of 8:11 am CST: Brent crude oil up $0.86 to $86.11, US dollar index down $0.305 to 105.747 while the nearby e-mini S&P 500 futures contract is down 3.25 to 5540.00.
Diesel
- The EIA reported diesel stocks fell 377,000 bpd last week.
- US diesel demand fell 11% last week to 3.5 mbpd.
- LTD for July HO is 6/28, please be out of positions by EOD 6/27.
Gasoline
- The EIA reported gasoline stocks rose 2.6 million barrels last week.
- US gasoline demand fell 4% last week to 8.9 mpbd.
- Prompt RBOB is testing its 100-day moving average today.
- LTD for July RBOB is 6/28, please be out of positions by EOD 6/27.
Propane
- Conway is trading at .7775 while Belvieu is trading at .8175.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8325.
- Conway propane is trading at 40% to WTI.
- The EIA reported propane stocks rose 2.1 million barrels last week.
Natural Gas
- Overnight weather runs removed 3 CDDs for the two-week forecast.
- Reuters estimates nat gas stocks rose between 32 and 55 Bcf.
- The EIA will report inventories at 9:30 am CT.
Continuous Daily HO: Diesel is on pace for quite the monthly gain as it trades nearly 30 cents higher than its low at the beginning of June. The prompt futures contract is tracking down its 100-day moving average which it hasn’t trade above since April.
