Morning Highlights
Morning Highlights

10-1-24 US indicates Iran's plan to strike Israel...


Riley Schwieger

Oct 1, 2024

Outlook: Energies began the morning lowing as the overarching trend pulled on prices, however, reports that Iran may launch a ballistic missile at Israel have caused a sharp reversal to flip the market positive. Iran’s direct involvement would be a significant development in the Middle East conflict between Israel and Hezbollah and has reignited geopolitical risk premium. The US has stated they are actively supporting defensive preparations to defend Israel against this attack, according to Axios. If the missile is launched, further upside risk appears evident but at the same a false alarm could quickly erase this premium and shift back into reverse. Expect the market to remain choppy as the situation develops.  

Crude

  • A Senior White House Official told AXIOS that Iran is preparing to imminently launch a ballistic missile attack against Israel.
  • Russia’s crude exports rebounded to three-month highs last week after an 850,000-bpd increase. 4-week average flows were reported at 3.26 mbpd.
  • Israel sent soldiers into southern Lebanon yesterday signaling a start to its ground offensive.
  • OPEC+ panel will meet virtually on October 2nd. No policy adjustments are expected to be made.
  • US imports of Canadian crude hit an all-time high of 4.373 mbpd in July. (EIA)
  • WTI prompt spread closed at its weakest level since June at 40c.
  • Reuters estimates crude stocks fell 2.1 million barrels last week.
  • The API survey will be reported after 3:30 pm CT today.
  • US manufacturing data will be reported tomorrow morning at 9:00 am CT.
  • As of 8:46 am CST: Brent crude oil up $0.95 to $72.65, US dollar index up $0.377 to 101.156 while the nearby e-mini S&P 500 futures contract is down 43.25 to 5771.00.

Diesel

  • Reuters estimates diesel stocks fell 1.9 million barrels last week.
  • Corn harvest was reported at 21% complete vs 18% 5yr average.
  • $2.10 represents daily support and could give way to a retest of the September low later this week.

Gasoline

  • Reuters estimates gasoline stocks fell 500,000 barrels last week.

Propane

  • Conway is trading at .6850 while Belvieu is trading at .7250.
  • Conway Swap Q4-Q1 2025 strip indicative midpoint ~.7450.
  • Conway propane is trading at 40% to WTI.
  • The good/excellent rating on the corn crop was reported at 64% last week vs 53% last year.

Natural Gas

  • Overnight weather runs removed 1 TDDs for the two-week forecast.
  • Nearly 2 million electricity customers remain without power across the Southeast due to flooding from Hurricane Helene.
  • Reuters estimates nat gas stocks rose between 60 and 65 Bcf last week.

Continuous 5 min WTI: Crude continues to push to fresh highs following reports of an Iranian missile strike.