Outlook: Energies are finding strength this morning on what’s been a choppy week so far. Crude is leading the complex higher with crude trailing not far behind. Diesel posted 15-month lows overnight but has since reversed course trading up nearly 5 cents. Despite the bearish EIA stats yesterday, global fundamentals are looking tighter with Libya’s production swiftly dropping and Iraq canceling cargoes for August as they shift back to OPEC+ compliance. Asia’s crude imports also bumped up to 26.74 mbpd in August from 24.56 mbpd in July. China was responsible for around half of the recovery which is welcoming for the bulls. Macroeconomic sentiment is also reinforcing the move today with a higher-than-expected GDP print for Q2 and lower-than-expected initial jobless claims. Confidence in an Iranian retaliation occurring over the weekend could stoke risk-on fears to help cement a positive finish ahead of the holiday weekend.
Crude
- Libya has cut oil output by 700,000 bpd since their announcement to completely halt production earlier this week. (Reuters)
- Iraq’s crude exports in July averaged 3.48 million barrels but has cancelled 1 million barrels of spot cargoes for August ahead of planned production cuts. (Reuters)
- The EIA reported crude stocks fell 846,000 barrels last week.
- US crude projection fell 100,000 bpd to 13.3 mbpd last week.
- US G2 GDP was reported at 3% vs 2.8% est.
- US jobless claims came in less than expected to cement an overall positive morning for economic reports.
- As of 8:50 am CST: Brent crude oil up $1.72 to $80.37, US dollar index up $0.366 to 101.460 while the nearby e-mini S&P 500 futures contract is down 14.25 to 5624.00.
Diesel
- Diesel futures fell to their lowest level in 15 months overnight before finding strength this morning.
- The EIA reported diesel stocks unexpectedly rose by 275,000 barrels last week.
- LTD for September HO is Friday 8/30. Please be out of positions by EOD 8/29.
Gasoline
- Retail gas prices are 13% lower heading into Labor Day weekend compared to last year.
- The EIA reported gasoline stocks fell by 2.2 million barrels last week.
- 4-week average gasoline demand rose by 14,000 bpd last week to 9.128 mbpd, which is ~80,000 bpd below 5-year average levels.
- LTD for September RBOB is Friday 8/30. Please be out of positions by EOD 8/29.
Propane
- Conway is trading at .7375 while Belvieu is trading at .7600.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7875.
- Conway Swap Oct24 indicative midpoint ~.7650
- Conway propane is trading at 42% to WTI.
- The EIA reported propane stocks rose less than expected at 991,000 barrels last week.
Natural Gas
- Overnight weather runs removed 1 CDDs for the two-week forecast.
- Freeport LNG is set to return to service today after been shut in due to a system error yesterday.
- Reuters estimates nat gas stocks rose between 33-55 Bcf last week.
- The EIA will report inventories at 9:30 am CT.
Continuous Daily HO:
