Outlook: Bearish momentum looks to continue today with WTI futures trading below $70 for the first time since January. The complex has shrugged off the idea that OPEC+ may now delay the unwinding of production cuts from October to December, but this remains speculation until the group officials meet in a month. Citigroup expressed a stronger bearish opinion today stating oil prices could slip to $60 if OPEC doesn’t add additional cuts while demand remains soft. Additional cuts among OPEC+ members have not been mentioned and seem unlikely but a strong recession could quickly change that. JOLTS jobs will be reported here this morning before the more anticipated Nonfarm payrolls gets reported on Friday. Inventory reports are delayed by a day this week due to the Monday holiday so the API will report this afternoon and the EIA will report tomorrow morning.
Crude
- Several OPEC+ delegates have now said the group may postpone its plan to start unwinding cuts in October following the recent price decline. (Reuters)
- Citigroup said Oil could average $60 in 2025 if OPEC+ does not cut more than current levels.
- Crude spreads look less bearish than outrights with strong backwardation still seen down the crude curve.
- US Manufacturing data showed larger than expected contractions last month.
- JOLTS jobs will be reported at 9:00 am CT.
- Reuters estimates crude stocks fell 600,000 barrels last week.
- The EIA will report inventories on Thursday at 10:00am CT due to the Monday market holiday.
- As of 8:31 am CST: Brent crude oil down $0.57 to $73.18, US dollar index down $0.190 to 101.635 while the nearby e-mini S&P 500 futures contract is down 15.25 to 5526.00.
Diesel
- Reuters estimates diesel stocks rose 400,000 barrels last week.
- Group 3 basis values have crossed above 5-year average levels, trading around +0.015.
Gasoline
- Reuters estimates gasoline stocks rose 800,000 barrels last week.
- RBOB futures closed at their lowest level since December 2021 yesterday.
- October RBOB has fallen to new contract lows today.
- Cenovus energy began a 45-day turnaround at its refinery in Lima, Ohio.
Propane
- Conway is trading at .7025 while Belvieu is trading at .7575.
- Conway Swap Oct24-Mar25 strip indicative midpoint ~.7500.
- Conway Swap Oct24 indicative midpoint ~.7275.
- Conway propane is trading at 42% to WTI.
Natural Gas
- Overnight weather runs added 4 CDDs for the two-week forecast.
- Reuters estimates nat gas stocks rose between 20 and 33 Bcf last week.
- Baker Hughes report nat gas rigs fell by 2 to 95 last week.
Continuous Daily HO: Diesel futures are trading at their lowest level since May 2023. The multi-year low of $2.15 may provide support if prices continue lower.
