Outlook: The energy complex is under pressure this morning with crude and products convincingly in the red. Weekend developments were ultimately bearish and are providing a clear headwind this morning. China’s briefing with their Finance Minister did not provide anything new or of substance and economic data piled on missing expectations. China’s CPI came in below estimates which isn’t constructive for an economy trying to drive growth. China’s crude imports were also reported lower in both y/y and m/m to reinforce demand concerns. OPEC cited a lack of growth in China for their revisions lower in their global oil demand growth forecast released this morning. Despite OPEC lowering growth estimates for three consecutive months, they remain the most bullish of the big three (EIA, IEA, and OPEC) by a significant margin. That said, these lower revisions are relatively expected as data suggests a closer track to that of the EIA and IEA. Middle East risk still remains with reports suggesting Israel has defined its targets which include military and energy infrastructure.
Crude
- OPEC released its monthly report this morning which revised 2024 and 2025 global oil demand lower by 100,000 bpd to 1.93 mbpd and 1.64 mbpd, respectively.
- OPEC reported crude production average of 26.04 mbpd in September, down 604,000 bpd from August, led by declines from Libya and Iraq.
- China’s Finance Ministry briefing lacked new incentive to boost consumption over the weekend. (BBG)
- China’s crude oil imports YTD fell 2.8% y/y to 10.99 mbpd while m/m imports fell 7.4% to 11.07 mbpd. (BBG)
- The US believes Israel has narrowed down potential targets for its response to Iran to military and energy infrastructure, according to NBC.
- Global crude in floating storage rose 24% last week to 58.58 million barrels. (BBG)
- Money manager increased Brent crude net length by 123k lots last week, the largest increase since 2016 and 2nd largest on record.
- As of 8:12 am CST: Brent crude oil down $1.61 to $77.43, US dollar index up $0.337 to 103.227 while the nearby e-mini S&P 500 futures contract is up 17.25 to 5876.00.
Diesel
- Managed money increased NYMEX HO net length by 21.5k lots last week.
- Continuous prompt HO is testing support at its 9 DMA near $2.3052 today.
Gasoline
- Managed money increased NYMEX RBOB net length by 13.6k lots last week.
- Continuous prompt RBOB is testing support at its 50 DMA and 9 DMA near $2.1237 and $2.0967.
Propane
- Conway is trading at .7200 while Belvieu is trading at .7700.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7725.
- Conway propane is trading at 41% to WTI.
Natural Gas
- Overnight weather runs added 4 HDDs for the two-week forecast.
- Nearly 2.3 million customers remained without power in Florida as of Friday.
- Baker Hughes reported nat gas rigs fell by 1 to 101 last week.
Continuous Daily WTI: OPEC has revised its global oil demand forecast lower for three consecutive months. 2024 global oil demand has been revised lower by ~300,000 bpd since July.