Outlook: The energy complex is still finding bearish pressures today despite bullish considerations such at escalation in the Middle East and wildfires threatening a significant portion of Canadian crude production. Managed money participants were heavy sellers last week, decreasing net length in crude, gas, and diesel. Exhaustion of geopolitical conflicts may have participants hesitant to jump right back to risk-on. A new tropical disturbance that developed late last week is growing in probability with a path directed at Florida. If a hurricane develops, a slight shift to the west would have the storm working into the Gulf where key energy infrastructure would be at risk. It’s a slow start for macroeconomic reports this week but things will heat up with JOLTS jobs and Chinese Manufacturing data due out tomorrow.
Crude
- Israel is considering retaliation to an attack on Golan Heights on Saturday, however, energies appear reluctant to add back risk-premium for any escalation right now. (Reuters)
- Iraq increased its export capacity at its southern Gulf terminals by 300,000 bpd. Production and exports will still be throttled back to remain compliant with OPEC quotas. (BBG)
- US crude exports to Northwest Europe are expected to hit a record seasonal high of 1.6 mbpd in July. (Reuters)
- Nigeria’s Dangote mega-refinery was forced to resell US and Nigerian crude after technical problems caused an outage at the plant last week.
- Venezuela’s electoral authority is reporting President Nicolas Maduro won a third term with 51% of the vote despite multiple exit polls pointing toward an opposition win. (Reuters)
- Managed money decreased WTI net length by 23.4k lots last week.
- Baker Hughes reported oil rigs rose by 5 last week to 482. Oil rigs remain down 47 y/y.
- As of 8:22 am CST: Brent crude oil down $0.33 to $80.80, US dollar index up $0.297 to 104.613 while the nearby e-mini S&P 500 futures contract is up 14.25 to 5513.00.
Diesel
- Nymex heating oil net length fell by 5k lots last week.
- Motiva’s Port Arthur, Texas refinery was expected to resume operations on Saturday.
- Wednesday is LTD for August HO.
Gasoline
- Nymex gasoline net length fell by 9k lots last week.
- Continuous RBOB futures are finding resistance at the 50-day moving average of $2.4779.
- Wednesday is LTD for August RBOB.
Propane
- Conway is trading at .7425 while Belvieu is trading at .7775.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7850.
- Conway Swap Oct24 indicative midpoint ~.7725
- Conway propane is trading at 40% to WTI.
Natural Gas
- Overnight weather runs added 1 CDDs for the two-week forecast.
- Natural gas futures fell 12 cents last week.
- Dutch TTF is up another 3% today with warmer than normal temps developing across Asia and Europe.
- Baker Hughes reported nat gas rigs fell by 2 to 101 last week.
- Today is LTD for August NG.
Continuous Daily RBOB:
