Outlook: Energies are finding strength today which may be attributed to increasing risk appetite. An Iranian retaliation is yet to be seen but is still believed to be imminent. Technical support may also be a consideration here providing comfort for those adding length. Fundamental developments have leaned bearish today but have been largely overshadowed. Both China and India, who are considered major global oil demand growth drivers, saw declines in monthly crude imports. The EIA STEO report decreased its 2025 global oil demand growth citing economic slowdowns throughout the OECD. To top it off, the API threw out a larger-than-expected build for crude and a surprise build for gasoline stocks in its survey released yesterday afternoon. If the builds are confirmed by the EIA this morning and are related to sluggish domestic demand, markets may face a stronger headwind to close out the week.
Crude
- Chinese crude imports in July fell to 9.97 mbpd, the lowest since September 2022 and 12% lower than in June. (Reuters)
- India’s crude demand fell 1.74% m/m in July. (BBG)
- The EIA’s STEO report forecasts US crude production will average 13.23 mbpd in 2024 and 13.69 mbpd in 2025. Both would revised slightly lower from the previous forecast.
- The EIA lowered its 2025 global oil demand forecast by 200,000 bpd to 1.6 mbpd.
- Reuters estimates crude stocks fell 700,000 barrels last week.
- The API survey showed crude stocks rose 200,000 barrels last week.
- The EIA will report inventories at 9:30 am CT.
- 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
- Exxon’s Joliet refinery was reportedly flaring gas yesterday as it attempts to resume operation after being knocked out by a Tornado last month.
- Reuters estimates diesel stocks rose 200,000 barrels last week.
- The API survey showed diesel stocks rose 1.2 million barrels last week.
- Covering short positions is advised with prices finding support at yearly lows.
Gasoline
- Reuters estimates gasoline stocks fell 1.9 million barrels last week.
- The API survey showed gasoline stocks fell 3.3 million barrels last week.
Propane
- Conway is trading at .7150 while Belvieu is trading at .7300.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7600.
- Conway Swap Oct24 indicative midpoint ~.7450
- Conway propane is trading at 40% to WTI.
- OPIS estimates propane stocks rose 2.2 million barrels last week.
Natural Gas
- Overnight weather runs added 2 CDDs for the two-week forecast.
- Last week Dutch TTF net longs held by managed money rose 46% to the highest since August 2021.
- Reuters estimates nat gas stocks rose between 16 and 35 Bcf
Continuous Daily HO: Diesel remains shy of its 9-day moving average as it looks to reestablish short-term upside momentum. The complex has work to do overall before seeing a call for a longer-term bullish shift.
