Outlook: Energies are looking to hold the bullish momentum established last week due to escalations in the Middle East. Missiles were exchanged and ground offensives were expanded over the weekend, but no oil facilities have been targeted despite growing expectations. Risk premium could begin to slip throughout the week if the conflict remains contained. Outside of geopolitics, headlines remain relatively mixed to kick the week off. Reports that Saudi Arabia increased its oil price to Asia is positive for demand, especially as prices overall work higher. India, however, reported its second consecutive month of y/y contractions in oil demand in September. Libya has ramped up oil production again after finding resolution in its central bank conflict with flows being reported back above 1 mbpd. Global oil flows should find support after falling in response to lost Libyan barrels. Hurricane Milton is expected to strengthen to a Cat-4 before making landfall near Tampa later this week. This system isn’t expected to significantly impact offshore oil & gas as it stays south but localized demand destruction should be expected in the storm path.
Crude
- Hurricane Milton has quickly developed into a Cat-3 hurricane in the Southern Gulf and is expected to track east toward Tampa.
- Iran fired missiles at Israel’s third-largest city, Haifa, earlier today. (Reuters)
- No oil facilities were targeted by Israel over the weekend, however, aerial and ground offensives were expanded in Gaza. (BBG)
- Libya’s oil production has risen back above 1 mbpd for the first time in 2-months. (BBG)
- India’s oil consumption fell by 1.6% y/y to 17.9 million tons in September.
- Saudi Arabia raised its November selling price to Asia by 90c to $2.20 over the Oman/Dubai benchmark.
- China’s top economic planner will hold a news briefing on Tuesday to discuss a package of policies aimed at boosting economic growth. (BBG)
- BP has abandoned its target to cut oil and gas output by 25% by 2030. (Reuters)
- Goldman Sachs lowered its 12-month recession probability by 5% to 15%.
- Baker Hughes reported US oil rigs fell by 5 to 479 last week.
- As of 8:26 am CST: Brent crude oil up $1.03 to $79.08, US dollar index down $0.120 to 102.402 while the nearby e-mini S&P 500 futures contract is down 18.25 to 5781.00.
Diesel
- India’s diesel sales were up 1.8% y/y in September.
- Managed money increase HO net length by 2k lots through Tuesday last week.
Gasoline
- India’s gasoline sales were up 3% y/y in September.
- Managed money increased RBOB net length by 1.8k lots through Tuesday last week.
Propane
- Conway is trading at .7775 while Belvieu is trading at .8250.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7725.
- Conway propane is trading at 40% to WTI.
Natural Gas
- Overnight weather runs added 1 TDDs for the two-week forecast.
- Roughly 700k customers remain without power 8 days after Hurricane Helene made landfall.
- Baker Hughes reported nat gas rigs rose by 3 to 102 last week.
Continuous Daily WTI: Crude is off its highs today after a brief test of its 100-day moving average at $76.19 today.
