Outlook: Energies are mixed today but remain on track for weekly declines. The week start with optimism as China launched stimulus measures as they aim to hit their 5% growth target. Traders remain uncertain that it will translate to increased energy demand. Momentum quickly shifted mid-week as Saudi Arabia said they’d abandon their $100 price target and move forward with increasing production in December. OPEC is expected to increase production by 180,000 bpd in December and make gradual increases through 2025. Market conditions will likely dictate the pace of the production increases but it’s evident that OPEC’s concern of losing market share is growing. Natural gas has moved independently this week and is looking for a strong finish to the week as it trades up over 8. Natural gas inventories have sat in a surplus throughout the year but are working toward normalization and are now only 7% above 10-year average levels.
Crude
- Chinese stimulus measure provided support this week and additional fiscal measures may be announced ahead of their week-long holiday beginning October 1st. (Reuters)
- Two OPEC+ sources said yesterday the group will move forward with its 180,000 bpd increase each month starting in December. (Reuters)
- Hurricane Helene has shut in 440,000 bpd of crude production. (BSEE)
- US August PCE was reported at 2.2% vs 2.3% est. and 2.5% prev. Core PCE rose .1% to 2.7% but fell in line with expectations.
- Michigan consumer sentiment will be reported at 9:00am CT.
- Baker Hughes will report rig counts at 12:00 pm CT.
- Chinese manufacturing data will be reported Sunday night.
- As of 8:25 am CST: Brent crude oil down $0.15 to $71.48, US dollar index down $0.317 to 100.205 while the nearby e-mini S&P 500 futures contract is up 6.25 to 5811.00.
Diesel
- Continuous HO closed below its 9-day moving average yesterday.
- Singapore middle distillate stocks fell 432,000 barrels to an 11-week low of 9.8 million barrels this week. Fuel oil stocks fell to a 6-year low of 15.5 million barrels.
- Chicago diesel basis trades near 5-year seasonal highs after increasing by 3.5 cents to +8 cents yesterday.
- LTD for Oct HO is 9/30. Please be out of positions by EOD Friday 9/27.
Gasoline
- Chicago CBOB basis rose 17 cents to +27 cents yesterday.
- AAA reports the national average retail gas price at $3.22, unchanged from a week ago.
- LTD for Oct RBOB is 9/30. Please be out of positions by EOD Friday 9/27.
Propane
- Conway is trading at .6325 while Belvieu is trading at .5750.
- Conway Swap Q4-Q1 2025 strip indicative midpoint ~.7225.
- Conway propane is trading at 40% to WTI.
- Belvieu prices tumbled yesterday following reports that ET’s 700,000 bpd Nederland facility will undergo 2-week maintenance
Natural Gas
- Overnight weather runs added 13 TDDs for the two-week forecast.
- 17% of Gulf gas production is offline due to Hurricane Helene.
- The EIA reported a smaller than expected injection of 47 Bcf for last week.
- Inventories remain 7% above 10 year-average levels, down from 20% as of July 5th.
Continuous Daily NG:
