Outlook: Energies are lacking conviction today as trade remains light following the US holiday yesterday. Hurricane Beryl is expected to work into the Gulf over the weekend but is expected to weaken and cause little disruption to offshore US oil and gas production. Wildfires have resurfaced in Alberta which already caused one oil sands site to shut down production as a precautionary measure. A busy hurricane season in tandem with wildfires in Canada pose a significant risk to crude production this summer. US employment data this morning was mixed with payrolls showing larger-than-expected growth while unemployment unexpectedly ticked higher. Macroeconomic concerns have been relatively absent over the last week while they have been the key bearish driver this year. Rate cut expectations still fall in September which is viewed as supportive to most participants. Energy prices overall lean bearish this morning with marginal losses seen across the board.
Crude
- Energy prices fell on Thursday’s shortened session following a late rally on Wednesday.
- Saudi Arabia cut the prices of its Arab light crude to Asia by $1.80 for August, yesterday.
- Suncor Energy shut its 215,000 bpd Firebag oil sands site in northern Alberta as a precaution due to a wildfire within 5 miles.
- BP said on Thursday that hurricane Beryl no longer poses a significant threat to its Gulf of Mexico assets. (Reuters)
- The EIA reported crude stocks fell by 12.1 million barrels last week.
- US crude stocks sit 17.5 million barrels below the 5-year seasonal average.
- Nonfarm payrolls for June were reported at 206k vs 190k est.
- US unemployment rose to 4.1% vs 4% est.
- As of 8:41 am CST: Brent crude oil down $0.10 to $87.33, US dollar index down $0.160 to 104.947 while the nearby e-mini S&P 500 futures contract is up 7.25 to 5508.00.
Diesel
- The EIA reported diesel stocks fell by 1.5 million barrels last week.
- US diesel stocks sit 12.7 million barrels below 5-year seasonal average levels.
- 4-week average US diesel demand rose 87,000 bpd last week to 3.7 mbpd, which remains 100,000 bpd below 5-year seasonal average levels.
- Phillips 66 reported a process upset at Wood River, Illinois today.
Gasoline
- The EIA reported gasoline stocks fell 2.2 million barrels last week.
- US gasoline stocks sit 1.7 million barrels above 5-year seasonal average levels.
- 4-week average US gasoline demand rose 120,000 bpd last week, which tracks in-line with 5-year seasonal averages.
Propane
- Conway is trading at .8175 while Belvieu is trading at .8550.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8550.
- Conway propane is trading at 41% to WTI.
- The EIA reported US propane stocks rose 2.3 million barrels last week.
- Gulf propane stocks remain in a tighter environment compared to the Midwest which is keeping pressure on propane prices.
Natural Gas
- Overnight weather runs added 1 CDDs for the two-week forecast.
- The EIA reported natural gas stocks rose 32 Bcf last week.
- Total gas inventories are 496 Bcf above the 5-year average of 2,638 Bcf.
Continuous Daily NG: Despite the recent golden cross, natural gas prices remain in a free fall. Bearish fundamentals have firm control of natural gas prices and further downside may yet to be had.
