Outlook: The energy complex is taking a breather today allowing crude and refined products to etch out small gains. Natural gas is moving independently after breaching support this morning and trades at its lowest level in four weeks. Several overnight events in Iran involving an explosion at an oil facility and an oil leak near Kharg have been reported as unrelated to Israel’s looming assault. The office of Israel’s Prime Minister made a statement yesterday that they will act in their best interest despite what the Washington Post reported about not targeting oil and nuclear facilities. Expect the market to remain on edge ahead of the weekend. Fundamental reports were delayed by a day this week due to the Monday holiday. The API will report their inventory survey this afternoon before the EIA reports tomorrow morning at 10:00 am CT. GasBuddy is reporting that gasoline demand plummeted last week in the aftermath of the recent Hurricane. This normalization is somewhat expected after a record print in the week prior.
Crude
- Prompt WTI is finding support near $70.
- Israeli Prime Minister Netanyahu’s office stated yesterday “We listen to the opinions of the US, but we will make our final decisions based on national interest” in response to the recent WaPo headline.
- The IEA and OPEC both lowered their 2024 oil demand forecasts this week.
- China’s crude imports have fallen for 5 consecutive months as of September.
- 21 people were injured in a fire that erupted at a Venezuelan crude storage tank containing 75,000 barrels of oil yesterday.
- The EIA will report inventories on Thursday this week due to the Monday holiday.
- The API will report its inventory survey after 3:30 pm today.
- Reuters estimates crude stocks rose 2.6 million barrels last week.
- As of 8:13 am CST: Brent crude oil up $0.24 to $74.49, US dollar index up $0.068 to 103.329 while the nearby e-mini S&P 500 futures contract is up 3.25 to 5866.00.
Diesel
- The EIA reported that global refinery margins in September fell to their lowest level since 2020 due to weak demand and increases in capacity.
- Continuous HO closed below its 50 DMA yesterday.
- Corn harvest was reported 47% complete vs the 5-year average of 39% while beans were 67% complete vs the 5-year average of 51%.
- Reuters estimates diesel stocks fell 2.4 million barrels last week.
Gasoline
- Reuters estimates gasoline stocks fell 2.2 million barrels last week.
Propane
- Conway is trading at .7050 while Belvieu is trading at .7450.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7700.
- Conway propane is trading at 41% to WTI.
- Propane values have continued to resist downside relative to crude.
Natural Gas
- Overnight weather runs removed 5 HDDs for the two-week forecast.
- Continuous NG may look for support at its 100 DMA today near $2.413
- Reuters estimates nat gas stocks rose between 63 and 87 Bcf last week.
- The EIA will report inventories tomorrow at 9:30 am CT.
Continuous Daily NG:
