Outlook: The energy complex is weaker today on what may be a corrective move following the recent rally. Libya’s crude production has already begun to fall after the decision was announced to completely cut oil production this week. War-related risk-premium may also be slipping with Hezbollah signaling a pause after the recent round of attacks. A price rally ahead of October may factor into the decision for OPEC to begin unwinding production cuts which could swiftly halt any upside momentum. Goldman Sachs recently lowered their Brent forecasts citing OPEC production increases but believes declining interest rates and rising demand in India should also limit downside moves. The API will report its inventory survey this afternoon while the Reuters poll is suggesting stock declines across the board. Price action in RBOB may hint toward disappointing demand or a surprise build but the EIA will look to confirm tomorrow morning.
Crude
- Several oil fields in Libya have halted production following the country's announcement of a complete shutdown yesterday.
- Hezbollah’s leader signaled the end of the “first phase” of attacks and will assess the results to determine further action.
- Goldman Sachs cut its average 2025 Brent forecast by $5 to $77.
- Hedge funds have been sellers in petroleum products 6 of the last 7 weeks, reducing total positions by 346 million barrels.
- Reuters estimates crude stocks fell 3 million barrels last week.
- The API will report its inventory survey after 3:30 pm today.
- As of 8:46 am CST: Brent crude oil down $0.58 to $80.85, US dollar index down $0.020 to 100.831 while the nearby e-mini S&P 500 futures contract is down 17.25 to 5620.00.
Diesel
- Reuters estimates diesel stocks fell 1.1 million barrels last week.
- Diesel futures now sit in Contango through the January contract before flipping back to backwardation.
- LTD for September HO is Friday 8/30. Please be out of positions by EOD 8/29.
Gasoline
- Reuters estimates gasoline stocks fell 1.6 million barrels last week.
- RBOB futures are backwardated through the January contract.
- LTD for September RBOB is Friday 8/30. Please be out of positions by EOD 8/29.
Propane
- Conway is trading at .7600 while Belvieu is trading at .7800.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.8100.
- Conway Swap Oct24 indicative midpoint ~.7875
- Conway propane is trading at 42% to WTI.
Natural Gas
- Overnight weather runs removed 9 CDDs for the two-week forecast.
- Reuters estimates nat gas stocks rose between 33-55 Bcf last week.
- LTD for September NG is 8/28. Please be out of positions by EOD 8/27.
Hurricane Outlook: It’s been a slow start to hurricane season, but peak season is still ahead. Mid-September has seen the most storms over the last 70 years.
