Outlook: The energy complex is battling for direction this morning with markets chopping around near unchanged. A lack of fresh news this morning may be contributing to the sideways trade. Former President Trump said he intends to fill the SPR up immediately if he gets elected this fall. Physical limitations for injecting barrels will prevent the SPR form being refilled at a similar rate to its historic drawdown. Because of this, the immediate market impact would be expected to remain limited as it has for the ongoing refills in progress. Libya’s 270,000 bpd Sharara oil production still remains offline due to protests which gradually contribute to market tightness with everyday production is limited. Goldman Sachs provided bearish considerations with a 10% increase in its recession probability over the next 12 months. We’re seeing analysts' calls for $80 oil as well as $60 oil following the recent volatility which illustrates a fair amount of uncertainty moving forward.
Crude
- Yesterday, former President Donald Trump said he will fill up the strategic petroleum reserve immediately if he’s elected in November.
- Libya’s National Oil Corporation declared force majeure at its Sharara oilfield due to protests.
- Goldman Sachs raised its 12-month US recession probability from 15% to 25%.
- The EIA reported US crude stocks fell 3.7 million barrels last week. Crude stocks have fallen 31 million barrels over the past 6 weeks, well above the 5-year average of 13 million barrels.
- The EIA estimates US crude production rose to a record level 13.4 mbpd last week.
- China will report CPI data tonight.
- As of 8:50 am CST: Brent crude oil up $0.01 to $78.34, US dollar index up $0.253 to 103.450 while the nearby e-mini S&P 500 futures contract is up 36.25 to 5263.00.
Diesel
- Exxon’s Joliet refinery restarted units and ramped up production yesterday.
- The EIA reported diesel stocks rose 950,000 barrels last week.
- 4-week average diesel demand remained steady despite a decline of 256,000 bpd last week.
Gasoline
- The EIA reported gasoline stocks rose 1.3 million barrels last week.
- 4-week average gasoline demand fell 1% with a 3.1% decline reported last week.
Propane
- Conway is trading at .7425 while Belvieu is trading at .7575.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7800.
- Conway Swap Oct24 indicative midpoint ~.7650
- Conway propane is trading at 40% to WTI.
- The EIA reported propane stocks rose less than expected at 515,000 barrels last week. Midwest stocks saw a surprise draw.
Natural Gas
- Overnight weather runs removed 5 CDDs for the two-week forecast.
- US LNG exports fell 5% y/y in July to 7.08 mt, lowest July volume since 2022.
- Reuters estimates nat gas stocks rose between 16 and 35 Bcf
Continuous Daily WTI: Continuous crude futures closed above the 9-day moving average yesterday as it looks to grab short-term bullish momentum.
