Outlook: The energy complex is flipping positive today which may be driven by risk-on sentiment heading into the weekend. Given the sharp decline over the last two sessions, values may be looking more appealing for those looking to hold length. The White House and Israel held discussions yesterday but there remains uncertainty on how Israel will strike Iran and what it will mean for supply or further escalation. Hurricane Milton made landfall last night and has knocked out power for over 3.3 million people. Natural gas prices have felt the most pressure from the recent two hurricanes due to demand destruction from power losses. Natural gas inventories have been pushing toward 10-year average levels but still are expected to hold a surplus heading into the heating demand season. US inflation came in higher than expected for September but still showed declines from August. A premature inflation reversal will remain a risk as the Fed works to unwind interest rates into next year.
Crude
- Israel’s Defense Minister Yoav Gallant stated yesterday that their “attack on Iran will be deadly, precise and above all surprising.” (Reuters)
- TankerTrackers is reporting that Iran’s crude exports through the first 9 days of October have been unaffected by recent escalations.
- Wildfires in North Dakota are expected to curb oil production by between 70,000-100,000 bpd. (Reuters)
- Libya’s NOC says oil output has risen back to 1.22 mbpd.
- The EIA reported crude stocks rose 5.8 million barrels last week.
- US crude production was estimated to have risen 100,000 bpd to 13.4 mbpd.
- US September CPI was reported at 2.4% vs 2.3% est. and 2.5% last.
- The USDA WASDE report will be released at 11:00 am CT tomorrow.
- As of 8:15 am CST: Brent crude oil up $1.20 to $77.78, US dollar index down $0.180 to 102.752 while the nearby e-mini S&P 500 futures contract is down 18.25 to 5822.00.
Diesel
- The EIA reported a larger than expected draw of 3.1 million barrels last week.
- US 4-week average diesel demand rose 118,000 bpd (3.1%) to 3.872 mbpd last week.
Gasoline
- The EIA reported a larger than expected draw of 6.3 million barrels last week.
- US 4-week average gasoline demand rose 294,000 (3.4%) to 9.039 mbpd last week
Propane
- Conway is trading at .7550 while Belvieu is trading at .8075.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7575.
- Conway propane is trading at 43% to WTI.
- The EIA reported a larger than expected build of 1.9 million barrels last week.
Natural Gas
- Overnight weather runs removed 3 TDDs for the two-week forecast.
- Reuters estimates nat gas stocks rose between 66 and 77 Bcf last week.
- The EIA will report inventories at 9:30 am CT.
Continuous Daily NG: The prompt natural gas contract has fallen ~40 cents through the last 5 sessions. Technical resistance and demand destruction from Hurricane Helene and Milton have weighed on prices.