Outlook: Energies are higher to start the week with refined products outpacing crude. The trend last week was a stronger move to start the day followed by a pullback into the afternoon and we’ll see if that pattern looks to continue this week. The foundation of this recent strip of higher pricing is built on anticipation of stronger demand which does leave the market susceptible to disappointment. The EIA’s monthly data for April did not show disappointment however, posting oil demand at 500,000 bpd higher than its STEO estimate. While the monthly data occasionally gets less attention due to its delayed nature, this pattern is worth noting as justification for the tighter supply environment expected in Q3 and the uncertainty moving forward after that. Trade activity make turn light as the week progresses due to the US market holiday on Thursday. Nymex markets will halt at 1:30 pm CT on Thursday and reopen at 5:00 pm CT to resume standard hours on Friday.
Crude
- US oil production and demand rose to a 4-month high in April, according to the EIA’s monthly report released on Friday. Demand was reported at 500,000 bpd above the STEO estimate.
- Hurricane Beryl has strengthened to a category 4 hurricane according to aircraft data reported by Bloomberg. The storm remains on a WNW path toward southern Mexico.
- Saudi Aramco may reduce its oil prices to Asia by 90c/bbl in August, according to a Bloomberg survey.
- Saudi Arabia’s crude exports in June fell to their lowest levels since August at 5.61 mbpd. This is down from 6.14 mbpd in May.
- Baker Hughes reported US oil rig counts fell by 6 to 479.
- US core PCE fell to 2.6% in June, down from 2.8% in May.
- US ISM manufacturing data will be reported at 9:00 am CT.
- As of 8:48 am CST: Brent crude oil up $0.84 to $85.84, US dollar index down $0.248 to 105.618 while the nearby e-mini S&P 500 futures contract is up 5.25 to 5526.00.
Diesel
- Net-long positions for ICE gasoil, which represents the European diesel benchmark, rose for a third consecutive week to its highest level since March 2022.
- India’s retail diesel sales fell 1.3% m/m in June. (Reuters)
Gasoline
- Russia announced they will continue to export gasoline through the month of July despite ongoing refinery attacks from Ukraine.
- India’s retail gasoline sales rose 3.6% in June. (Reuters)
Propane
- Conway is trading at .7975 while Belvieu is trading at .8475.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8425.
- Conway propane is trading at 40% to WTI.
Natural Gas
- Weekend weather runs removed 10 CDDs for the two-week forecast.
- Baker Hughes reported nat gas rigs rose by 1 to 97 last week.
- The first half of July is expected to be hotter than the 10-year average.
- China’s June LNG imports fell 6.2% y/y in June. (BBG)
Continuous Daily HO:
