Outlook: The energy complex is chopping around this morning with values hovering near unchanged. Equities markets in Asia saw a sharp recovery overnight, which provided a marginal easing of recessionary fears. US equities are positive this morning but appear to lack conviction as they slip from their highs. Energy fundamentals this week have leaned bullish which may have helped the recovery yesterday. Saudi Aramco feels the market has overdone the move while Agencies like Goldman Sachs expect Brent to respect support at $75. Goldman also said oil will likely favor the lower end of its $75-$90 2025 forecast if economic pressures continue to mount. Geopolitical escalations remain at bay with an Iranian retaliation yet to be seen. A missile strike on a base housing US troops in Iraq yesterday has yet to be tied as retaliation. Traders will look for further fundamental influence from the API this afternoon and EIA tomorrow morning.
Crude
- Saudi Aramco CEO Amin Nassar said they see significant growth in China and said the fundamentals do not support a drop in oil prices. (Reuters)
- Mexico’s state oil company Pemex expects the 170,000 bpd Olmeca refinery to reach its full capacity of 340,000 bpd by August 21st. (BBG)
- At least 5 US personnel were injured in an attack against a military base in Iraq yesterday. (Reuters)
- Libya’s Sharara oil field continues to produce at reduced rates due to protests.
- Asian equity markets rallied overnight after a sharp selloff to start the week.
- Reuters estimates crude stocks rose 900,000 barrels last week.
- The API will report its survey after 3:30 pm CT.
- China will report import/export data for July tonight.
- As of 8:50 am CST: Brent crude oil down $0.01 to $76.31, US dollar index up $0.313 to 103.002 while the nearby e-mini S&P 500 futures contract is down 35.25 to 5252.00.
Diesel
- Reuters estimates diesel stocks rose 200,000 barrels last week.
- Gasoline continues to find premium relative to diesel heading into the final month of driving season.
- Covering short positions is advised with prices finding support at yearly lows.
Gasoline
- Reuters estimates gasoline stocks fell 1.9 million barrels last week.
- Gasoline cracks have remained supportive while diesel cracks have fallen over the last week.
Propane
- Conway is trading at .7100 while Belvieu is trading at .7275.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7525.
- Conway Swap Oct24 indicative midpoint ~.7375
- Conway propane is trading at 40% to WTI.
Natural Gas
- Overnight weather runs removed 3 CDDs for the two-week forecast.
- Baker Hughes reported nat gas rigs fell by 3 to 98 last week.
- Reuters estimates nat gas stocks rose between 16 and 35 Bcf
Continuous Quarterly WTI: WTI is testing support around its 20-year average with selling pressure mounting.
