Outlook: Energies are lower out of the gate for the third consecutive day with bearish pressures maintaining control. Economic data out of China leaned bearish overnight with CPI prints declining to reflect deflationary pressure and providing headwinds for demand. Despite the ongoing mixed data out of China, OPEC remains optimistic on China’s demand growth which is a key reason their 2024 oil demand growth forecast is substantially higher than the EIA and IEA. The IEA will release its monthly report tomorrow and is expected to have global oil demand growth forecasted between the EIA’s 1.1 mbpd and OPEC’s 2.25 mbpd. The EIA will release its weekly inventory stats later this morning to provide a first look at the impacts of holiday travel last week. According to several industry estimates, crude and gasoline stocks are expected to have fallen while diesel stocks rose.
Crude
- Chinese CPI data showed deflationary pressure overnight with June CPI falling to 0.2% from 0.3% in May.
- OPEC released its monthly report this morning, leaving 2024 and 2025 global oil demand unchanged at 2.25 mbpd and 1.85 mbpd, respectively.
- According to their monthly report, OPEC oil production in June fell by 80,000 bpd to 26.57 mbpd.
- Fed Chair Jerome Powell will testify to Congress today on the outlook for US monetary policy.
- Reuters estimates crude stocks fell 1.3 million barrels last week.
- The API survey showed crude stocks fell by 2.9 million barrels last week.
- The EIA will release its inventory report today at 9:30 am CT.
- The IEA will release its monthly report tomorrow morning.
- As of 8:38 am CST: Brent crude oil down $0.24 to $84.42, US dollar index down $0.070 to 105.059 while the nearby e-mini S&P 500 futures contract is up 10.25 to 5642.00.
Diesel
- Reuters estimates diesel stocks rose 800,000 barrels last week.
- The API survey showed diesel stocks rose 2.3 million barrels last week.
Gasoline
- Reuters estimates gasoline futures fell 0.6 million barrels last week.
- The API survey showed gasoline stocks fell by 2.9 million barrels last week.
- Continuous RBOB futures are testing support at its 50-day moving average of $2.5014
Propane
- Conway is trading at .8025 while Belvieu is trading at .8375.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8450.
- Conway propane is trading at 41% to WTI.
- OPIS estimates propane stocks rose 2.2 million barrels last week.
Natural Gas
- Overnight weather runs removed 7 CDDs for the two-week forecast.
- The EIA decreased its 2024 and 2025 US dry natural gas production forecast to 103.47 Bcf/d and 105.2 Bcf/d, respectively. Consumption was left unchanged for 2024 and revised slightly higher for 2025.
- Reuters estimates natural gas stocks rose between 49 and 55 Bcf last week.
Continuous 321 Crack: Crack spreads have cooled off again with Hurricane Beryl causing minimal disruptions to energy infrastructure in the Gulf. Additional storms are expected this year and should act to keep prices supported with risk premium.
