Outlook: Positive momentum for commodities as a whole may be assisting the move in energies today. Gold has hit all-time highs and with interest rates expected to begin their decline next week, conditions appear more favorable for owning commodities. Energies are also backed by fundamentals this week with a significant chunk of Gulf crude production offline. Libyan factions have reportedly failed to reach a deal, and the country's crude exports continue to plunge with production curtailed. Crude spreads have reacted and reflect a tighter environment with the prompt WTI spread pushing near $1.00 today. The outrights are searching to maintain short-term momentum with WTI testing $70 and refined product futures testing 9-day moving averages early this morning. Michigan Consumer Sentiment will be reported at 9:00 am CT for one last macro influence before the weekend and the COT report will be released this afternoon with managed money in focus.
Crude
- 730,000 of crude production in the Gulf remains shut in following hurricane Francine. (Reuters)
- Libya’s crude exports have fallen further to 314,000 bpd over the last week after the UN Libyan mission said yesterday that the two factions were unable to reach a deal. (BBG)
- Russia’s primary offline crude refining capacity is expected to increase by 34% m/m in September due to technical outages following a series of drones attacks. (Reuters)
- Gold futures have again hit all-time highs and a broader buy commodities move may be impacting energies.
- CME FedWatch is showing 57% in favor of a 25 basis point cut next week from the Fed.
- Michigan consumer sentiment will be reported at 9:00 am CT.
- Baker Hughes will report rig counts at 12:00 pm CT.
- As of 8:12 am CST: Brent crude oil up $0.26 to $71.36, US dollar index down $0.064 to 101.620 while the nearby e-mini S&P 500 futures contract is up 9.25 to 5570.00.
Diesel
- BP’s Whiting Indiana refinery announced it will be its 60-day turnaround as early as September 20th.
- Six oil refineries in Louisiana were reported to be recovering yesterday with no reports of longer lasting outages.
- The diesel forward curve remains in contango through the February contract.
- For retailers, short positions are advised to be covered at these price points, however holding excess length is not advised until we see a more compelling short-term trend change.
Gasoline
- AAA reports the national average retail gas price at $3.23, down 6 cents from a week-ago.
- RBOB is gaining premium to HO today which may be due to soft diesel fundamental as opposed to bullish gasoline.
Propane
- Conway is trading at .6650 while Belvieu is trading at .6450.
- Conway Swap Q4 2025 strip indicative midpoint ~.6900.
- Conway propane is trading at 43% to WTI.
Natural Gas
- Overnight weather runs added 2 CDDs for the two-week forecast.
- The EIA reported nat gas stocks rose 40 Bcf last week.
- At 3,387 Bcf, stocks sit 296 above 5-year average levels.
Diesel Forward Curve: The contango market structure in diesel shows favor toward carrying product, however, cost of carry should also be considered with elevated interest rates. If basis discounts develop in Q4, the incentive to store product and sell futures to hedge may become more advantageous.
