Outlook: The energy complex is lower again this morning as weather-related risk premium fades from the market. While hurricane Beryl made an unlikely turn to make a direct hit in Texas where key energy infrastructure is, the weakened storm caused limited damage to concern energy prices. Over 2 million people remain without power in Texas which may impact local prices in the southern regions. Natural gas prices are bouncing this week despite export curtailment. A widespread heatwave is working its way through the US later this week providing support with prospective increases in cooling demand. Jerome Powell is set to testify in front of Congress this morning at 9:00 am CT. Further insight into the Fed’s intentions may provide influence to energy prices which continue to chop around this morning. First rate cut bets still fall in September with a 71% chance but any hint toward delays would be a bearish driver.
Crude
- The Port of Corpus Christi Ship Channel is expected to resume normal operations today. (Reuters)
- Russia produced around 9.078 mbpd of crude in June, which is 100,000 bpd above its OPEC+ agreement. (BBG)
- Saudi crude exports to China are expected to increase from 36 million barrels in July to 44 million barrels in August. (Reuters)
- Fed Chair Jerome Powell will testify to Congress today on the outlook for US monetary policy.
- Reuters estimates crude stocks fell 250,000 barrels last week.
- The API survey will be reported at 3:30 pm CT.
- The EIA will release its monthly report today around noon.
- OPEC will release its monthly report tomorrow, followed by the IEA on Thursday.
- As of 8:46 am CST: Brent crude oil down $0.41 to $85.34, US dollar index up $0.013 to 105.013 while the nearby e-mini S&P 500 futures contract is up 13.25 to 5638.00.
Diesel
- Reuters estimates diesel stocks fell 300,000 barrels last week.
- Continuous diesel futures did not manage a close below the 100-day moving average yesterday but is making a more convincing run to do so today.
- Group 3 diesel basis fell under pressure yesterday trading to -15 cents with traders citing healthy inventories as a driver. (OPIS)
Gasoline
- Reuters estimates gasoline futures fell 1.9 million barrels last week.
- Europe’s gasoline stocks were flat from May to June but remain up 8.9% y/y.
- Citgo reported a unit upset at the Lemont, Illinois refinery yesterday.
Propane
- Conway is trading at .8025 while Belvieu is trading at .8350.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8550.
- Conway propane is trading at 41% to WTI.
Natural Gas
- Overnight weather runs added 3 CDDs for the two-week forecast.
- Estimated gas flows to US LNG export facilities were 6% lower to 11.1 Bcf due to Hurricane Beryl. (BBG)
- Reuters estimates natural gas stocks rose between 49 and 55 Bcf last week.
Continuous Daily CL: A potential shift in short-term momentum as crude futures look to close below the 9-day moving average for the first time since early June.
