Outlook: The energy complex is lower this morning and on pace to erase yesterday’s gains. Fresh Chinese stimulus measures backed yesterday’s strength but as the dust settles, traders are left questioning whether it will be enough to boost real economic activity. China is still expected to lead global oil demand growth which should continue to provide volatility to the energy space. The losses today may be limited by Gulf production outages due to the impending hurricane and the expectation that crude and refined inventories fell across the board last week. Tropical storm Helene could strengthen to as severe as a category 4 hurricane before landfall in Florida's panhandle on Thursday. The EIA will report inventories this morning with industry estimates suggesting tighter fundamentals. Look for demand indications to take priority over supply with growth needed to sustainably support prices.
Crude
- Tropical storm Helene has shut in 284,000 bpd of crude production as of yesterday. The storm is expected to strengthen to a major hurricane by Thursday before making landfall. (BSEE)
- OPEC released their World Oil Outlook report yesterday which forecasts oil demand will increase by 24% through 2050 and will require $17.4 trillion in new investment. (Reuters)
- Libya crisis talks are set to resume as the partial oil blockade nears a second month. (BBG)
- Continuous WTI is testing support at its 9-day moving average today.
- The API survey showed crude stocks fell by 4.3 million barrels last week.
- Reuters estimates crude stocks fell 1.4 million barrels last week.
- The EIA will report inventories at 9:30 AM CT.
- August PCE will be reported Friday morning at 7:30 am CT.
- As of 8:03 am CST: Brent crude oil down $1.35 to $73.82, US dollar index down $0.045 to 100.421 while the nearby e-mini S&P 500 futures contract is down 2.25 to 5790.00.
Diesel
- The API survey showed diesel stocks fell by 1.1 million barrels last week.
- Reuters estimates diesel stocks fell 1.6 million barrels last week.
- LTD for Oct HO is 9/30. Please be out of positions by EOD Friday 9/27.
Gasoline
- The API survey showed gasoline stocks fell by 3.4 million barrels last week.
- Reuters estimates gasoline stocks fell 20,000 barrels last week.
- RBOB may be more susceptible to demand destruction as another major hurricane looks to make landfall this weekend.
- LTD for Oct RBOB is 9/30. Please be out of positions by EOD Friday 9/27.
Propane
- Conway is trading at .6775 while Belvieu is trading at .6750.
- Conway Swap Q4-Q1 2025 strip indicative midpoint ~.7425.
- Conway propane is trading at 40% to WTI.
- OPIS estimates crude stocks rose 1.6 million barrels last week.
Natural Gas
- Overnight weather runs added 3 TDDs for the two-week forecast.
- Dutch TTF prices are up 6% on week with temperatures in the UK and France forecast to drop below seasonal norms.
- Reuters estimates nat gas stocks rose between 53 and 56 Bcf last week.
- LTD for Oct NG is Thursday 9/26. Please be out of positions by EOD today.
Continuous Daily WTI: WTI is testing support at its 9-day moving average today. A close below would be a bearish short-term indicator.
