Outlook: Energies are lower out of the gate this morning but remain on track for weekly gains. It was a week of volatility with several days seeing substantial moves in opposing directions as traders shifted from profit-taking to risk-on. Israel’s strike against Iran appears to be on the doorstep but exact timing and what they’ll decide to target remains in question. Iran has said any country that aids Israel in this response will be held responsible and Gulf states, including Saudi Arabia, have urged the US to persuade Israel against targeting energy infrastructure. If Israel were to comply, markets could very well adopt a softer tone again. China remains the catalyst on the demand front and we’re expecting to receive more info from their finance minister regarding stimulus and further measures to meet their annual growth target on Saturday. Any unexpected news from China or an attack from Israel over the weekend could create a volatile open on Sunday night.
Crude
- WTI has traded in a ~$7 range this week but remains on track for a weekly gain.
- Expect the market to remain sensitive to commentary involving the Middle East today.
- A Platts survey suggests OPEC+ crude production fell 500,000 bpd month-over-month to 40.23 mbpd.
- North Dakota wildfires are estimated to be disrupting 60-90 kbpd of oil production. (Reuters)
- China’s finance minister will hold a briefing tomorrow to discuss stimulus and progress toward China’s annual economic growth target.
- Continuous WTI found resistance at its 100 DMA yesterday.
- US Producer Price Index was reported at 1.8% vs 1.6% est. and 1.9% last.
- Michigan Consumer Sentiment will be reported at 9:00 am CT.
- The USDA WASDE report will be released at 11:00 am CT today.
- As of 8:20 am CST: Brent crude oil up $0.61 to $78.79, US dollar index down $0.013 to 102.975 while the nearby e-mini S&P 500 futures contract is down 2.25 to 5826.00.
Diesel
- The Port of Tampa remains closed following Hurricane Milton. The port is one of the largest fuel-importing ports in the US.
- US TSA total travel throughput on a 7-day average is 4.2% above 2019 levels.
- Continuous HO found resistance at its 100 DMA yesterday.
- Prompt diesel futures traded in a 17-cent range this week.
Gasoline
- Continuous RBOB closed back above its 50-day moving average yesterday.
- Prompt gasoline futures traded in a 15-cent range this week.
- AAA reports the national average gas price at $3.209, up 2 cents from last week.
Propane
- Conway is trading at .7350 while Belvieu is trading at .8075.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7725.
- Conway propane is trading at 41% to WTI.
- A force majeure at Energy Transfer’s NGL export complex in Nederland, Texas, put downward pressure on propane markets yesterday.
Natural Gas
- Overnight weather runs added 5 HDDs for the two-week forecast.
- Hurricane Milton cut power to 3.4 million customers across Florida.
- The EIA reported natural gas stocks rose 82 Bcf last week.
- Total working gas inventories sit 176 Bcf above the 5-year average of 3,453 Bcf.
Continuous Daily WTI: WTI met resistance at its 100 DMA yesterday. Look for the 9 DMA to provide support if selling pressure mounts today.
