Outlook: The energy complex is flat this morning as traders wait for fresh insight to provide direction. Developments in the Middle East still remain a priority but indications of when Israel will strike and how they will strike have gone stale. China’s CSI 300 has tumbled since the beginning of October with fears mounting that current stimulus proposals will fail to provide adequate economic growth. Demand outside of China has failed to pick up the slack which has resulted in a softer fundamental environment. The ECB cut interest rates by 25 bps this morning which fell in line with expectations. The US is also expected to announce a 25 bps cut in November when the Fed meets again. The lowering of interest rates across several key economies should be supportive but it’s unclear how quickly demand will recover. The EIA will report weekly US inventories later this morning. The API survey yesterday afternoon leaned bullish, reporting draws across the board.
Crude
- Japan’s oil imports fell by 5% y/y to 2.24 mbpd in September. (Reuters)
- India’s monthly crude imports from Russia rose to 1.9 mbpd in September, accounting for nearly 40% of its total crude imports. (Reuters)
- Iranian authorities are working to control the oil spill near Kharg Island, which was reported on Sunday. Kharg accounts for nearly 90% of the country's exports. (Reuters)
- The API survey showed crude stocks fell 1.6 million barrels last week.
- Reuters estimates crude stocks rose 1.8 million barrels last week.
- The EIA will report inventories at 10:00 am CT today.
- The ECB cut interest rates by 25 bps this morning, which fell within expectations.
- As of 8:03 am CST: Brent crude oil up $0.18 to $74.40, US dollar index up $0.028 to 103.615 while the nearby e-mini S&P 500 futures contract is up 33.25 to 5920.00.
Diesel
- The API survey showed diesel stocks fell 2.7 million barrels last week.
- Reuters estimates diesel stocks fell 2.4 million barrels last week.
Gasoline
- The API survey showed gasoline stocks fell 5.9 million barrels last week.
- Reuters estimates gasoline stocks fell 2.2 million barrels last week.
- Gasoline demand is expected to have fallen sharply last week in the aftermath of Hurricane Milton.
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 43% to WTI.
- OPIS estimates propane stocks rose 1.9 million barrels last week.
Natural Gas
- Overnight weather runs removed 4 HDDs for the two-week forecast.
- Weather models have shifted warmer for 3 consecutive days which may be weighing on prices.
- 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 Weekly 321 Crack: Cracks have lifted from November lows but have yet to prove a pattern for optimism.
