Morning Highlights
Morning Highlights

10-9-24 Energies remain under pressure...


Riley Schwieger

Oct 9, 2024

Outlook: The bears appear to be in control with energy markets sliding lower again today. The catalyst this week has been a lack of response from Israel against Iran and disappointing stimulus rhetoric out of China. China’s Finance Minister will address reporters on Saturday to clarify the current stimulus and provide additional insight on how they plan to strengthen the economy. The US and Israel are discussing Middle East developments today. Expectations still remain that Israel will look to cause financial harm to Iran and the energy sector would be the most likely target. After reports that tankers were evacuating the Island of Kharg which is a key oil facility in the Gulf, oil loading have appeared to resume this week per satellite imaging. Domestic fundamentals may shift in focus with the API survey showing a large crude build of 11 million barrels last week. Reuters is estimating a much smaller build of 2 million barrels and the EIA will report stats at 9:30 am CT.

Crude

  • President Biden is expected to speak with Israeli Prime Minister Benjamin Netanyahu today to discuss any plans to strike Iran.
  • China’s Finance Minister announced today an additional press conference for Saturday to introduce moves to strengthen fiscal policy and answer questions from reporters.
  • The EIA released its October STEO report yesterday which forecasts global oil demand growth at 1.2 mbpd for 2025. This was 300,000 bpd lower than its previous forecast.
  • The EIA revised its 2025 US crude production growth forecasts lower by 130,000 bpd to 13.54 mbpd.
  • The prompt WTI contract saw a key reversal lower yesterday.
  • Reuters estimates crude stocks rose 2.0 million barrels last week.
  • The API survey showed crude stocks rose 11 million barrels last week.
  • The EIA will report inventories at 9:30 am CT.
  • The FOMC meeting minutes will be released today at 1:00 pm CT.
  • As of 8:31 am CST: Brent crude oil down $1.17 to $76.01, US dollar index up $0.233 to 102.782 while the nearby e-mini S&P 500 futures contract is down 4.25 to 5796.00.

Diesel

  • Reuters estimates diesel stocks fell 1.9 million barrels last week.
  • The API survey showed diesel stocks fell 2.6 million barrels last week.
  • The prompt HO contract saw a key reversal lower yesterday.

Gasoline

  • Reuters estimates gasoline stocks fell 1.1 million barrels last week.
  • The API survey showed gasoline stocks fell 600,000 barrels last week.
  • Prompt RBOB saw a key reversal lower yesterday.

Propane

  • Conway is trading at .7750 while Belvieu is trading at .8225.
  • Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7675.
  • Conway propane is trading at 43% to WTI.
  • OPIS estimates propane stocks rose 1.2 million barrels last week.

Natural Gas

  • Overnight weather runs added 2 TDDs for the two-week forecast.
  • 160k customers remain without power following Hurricane Helene and further outages throughout Florida are expected as Milton makes landfall.
  • Reuters estimates nat gas stocks rose between 66 and 77 Bcf last week.

Continuous Daily WTI: WTI is testing support at its 50-day moving average as bearish pressures mount.