Outlook: The energy complex is finding strength for the first time in three days, finding support from a bullish API report and several technical indicators showing oversold levels. From a technical view, crude, gas, and diesel have all triggered oversold levels with tests of their lower Bollinger bands. Funds have added length over the last several weeks and a widespread risk-off event may have induced profit-taking. Further fundamental support has also developed with Russia’s crude exports declining for the third consecutive week and the API survey showed inventory draws across the board. The relationship between product demand and refinery utilization rates will be another key area of focus in the EIA stats today. Crack spreads have remained supported this week which may hint toward either stronger demand or a reduction in run rates for last week. The US dollar is off over 200 points this morning to sprinkle in a tailwind and macroeconomic data releases will pick up through the second half of the week with monthly PCE, the Fed’s preferred inflationary measure, due for release on Friday.
Crude
- Russia’s four-week average crude exports fell for a third consecutive week and to the lowest level since December.
- Canadian Wildfires remain a bullish risk with out-of-control fires within 6 miles of ~380,000 bpd of production.
- Continuous WTI closed below its lower Bollinger band yesterday which is an indicator for oversold levels.
- Reuters estimates crude stocks fell 2.5 million barrels last week.
- The API survey showed crude stocks fell 3.9 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- As of 8:06 am CST: Brent crude oil up $0.67 to $81.68, US dollar index down $0.239 to 104.211 while the nearby e-mini S&P 500 futures contract is down 52.25 to 5546.00.
Diesel
- Reuters estimates diesel stocks rose 3,000 barrels last week.
- The API survey showed diesel stocks fell 1.5 million barrels last week.
- Power was restored at Exxon’s Joliet refinery yesterday afternoon.
- Russia will consider adding diesel to its gasoline export ban if prices demonstrate sharp growth.
Gasoline
- Reuters estimates gasoline stocks fell 500,000 barrels last week.
- The API survey showed gasoline stocks fell 2.8 million barrels last week.
Propane
- Conway is trading at .7425 while Belvieu is trading at .7750.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7825.
- Conway Swap Oct24 indicative midpoint ~.7625
- Conway propane is trading at 39% to WTI.
- OPIS estimates propane stocks rose 2.3 million barrels last week.
Natural Gas
- Overnight weather runs removed 1 CDDs for the two-week forecast.
- New Fortress delayed its planned start date for its floating LNG facility which will take US feedgas. The facility is now expected to start operation in August.
- Reuters estimates nat gas stocks rose between 11 and 24 Bcf last week.
Continuous Weekly Propane:
