Morning Highlights
Morning Highlights

10-18-24 Energies slide as crude retests 70...


Riley Schwieger

Oct 18, 2024

Outlook: Oil prices are off around five dollars on the week and oil sits on track for its first weekly decline in several weeks. The market saw remarkably quiet sideways trade over the last few sessions outside of Monday's volatility. Headlines and fundamental drivers that would ordinarily provide influence trickled out throughout the week, but the market seem to lack conviction as it awaits Israel's next move. While the death of the Hamas leader has the US looking for renewed peace talks, Israel's Energy Minister has restated that all options remain on the table, including nuclear targets, for their looming attack. Traders have not bought the pump fake as Israel backtracked after Monday’s report that they would not target energy or nuclear sites and such an event would come as a surprise given the market's positioning. Energies are sliding lower after a slow start this morning and WTI looks to be testing support at $70 as it trades down around 70 cents.

Crude

  • Israel stated they killed Hamas Leader Yahya Sinwar this week. The US believes this could open the door to renewed ceasefire talks. (BBG)
  • Israel’s Energy Minister said today that all options are open in their retaliation against Iran, including striking nuclear facilities. (BBG)
  • Saudi Arabia’s crude exports fell to 5.67 mbpd in August, down 1.2% m/m. (Reuters)
  • Oil refining in China fell to a three-month low of 58.73mm tons in September, down 1.6% YTD. (Reuters)
  • China’s economy grew at the slowest pace since early 2023 in Q3 this year.
  • The EIA reported crude stocks fell 2.2 million barrels last week.
  • The EIA estimates US crude production rose to a record 13.5 mbpd last week.
  • US net crude imports fell 1 mbpd last week.
  • As of 8:13 am CST: Brent crude oil down $0.34 to $74.09, US dollar index down $0.305 to 103.521 while the nearby e-mini S&P 500 futures contract is up 16.25 to 5903.00.

Diesel

  • The Port Arthur refinery in Texas cut rates on Wednesday after losing power at two steam generators. (Reuters)
  • The EIA reported diesel stocks fell 3.5 million barrels last week vs -2.2mb est.

Gasoline

  • The EIA reported gasoline stocks fell 2.2 million barrels last week vs -1.5mb est.
  • 4-week average gasoline demand remained above 9 mbpd despite the 1 mbpd decline w/w.
  • AAA reports the national average gas price at $3.19 and 14 states now see an average below $3.

Propane

  • Conway is trading at .7350 while Belvieu is trading at .7850.
  • Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7700.
  • Conway propane is trading at 43% to WTI.
  • The EIA reported a larger than expected build of 3.3 million barrels last week.
  • Propane exports remain muted at 1.5 mbpd.

Natural Gas

  • Overnight weather runs removed 6 HDDs for the two-week forecast.
  • The EIA reported a 76 Bcf injection into storage last week.
  • Total gas inventories remain 163 Bcf above 5-year average levels.

Continuous Daily WTI: A close below $70 today could invite a return to the mid-60s next week.