Outlook: The energy complex is again looking for strength out of the gate this morning. This strength, however, is dwindling despite a report released within the hour stating that OPEC+ may delay its output hike. Some might view this shift as expected given the recent downward trend, however, with over a month until the official decision, we could see indications move back and forth as prices chop around. OPEC+ is feeling the pressures of slipping market share as they sit on the sidelines but there likely remains a price point that is too low to ramp back up. Saudi Arabia spoke earlier this week stating that the bearish outlook for Chinese demand and economic growth is overstated and believes they will see a strong rebound in 2025. The fundamentals have yet to reflect tightening balances which may ultimately impact the scale at which OPEC+ increases production when they decide to. Payroll data is now mixed for October reporting with ADP beating estimates this morning after JOLTS underperformed yesterday. Nonfarm payrolls will be reported on Friday to break up the stalemate. Energy prices remain off their highs following the OPEC+ report but look to be on firmer footing compared to yesterday. Look for EIA stats to provide a fresh driver later this morning.
Crude
- Three sources told Reuters that OPEC+ could delay planned December oil output hike due to soft demand and rising supply.
- Israeli Prime Minister Benjamin Netanyahu is holding meetings with several ministers to discuss diplomatic solutions for the war in Lebanon. (Reuters)
- The API survey showed crude stocks fell 573,000 barrels last week.
- Reuters estimates crude stocks rose 2.2 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- ADP Private Payrolls was reported at 233k vs 111k est. Nonfarm payrolls will be reported on Friday morning.
- US 3Q GDP was reported at 2.8% vs 3.2% est.
- As of 8:14 am CST: Brent crude oil up $1.02 to $72.14, US dollar index up $0.048 to 104.365 while the nearby e-mini S&P 500 futures contract is down 5.25 to 5865.00.
Diesel
- The API survey showed diesel stocks fell 1.5 million barrels last week.
- Reuters estimates diesel stocks fell 1.4 million barrels last week.
- LTD for November HO is Thursday 10/31.
- Group diesel basis values continue to decline but remain in contango through December. We will roll out an inventory hedge recommendation when we see the right opportunity.
Gasoline
- The API survey showed gasoline stocks fell 300,000 barrels last week.
- Reuters estimates gasoline stocks rose 500,000 barrels last week.
- LTD for November RBOB is Thursday 10/31.
Propane
- Conway futures are trading at .7350 while Belvieu is trading at .7875.
- Conway Swap Q4-Q1 25/26 strip indicative midpoint ~.7350.
- Conway propane is trading at 42% to WTI.
- OPIS estimates propane stocks fell 600,000 barrels last week.
Natural Gas
- Overnight weather runs removed 8 HDDs for the two-week forecast.
- December NG has entered the prompt contract.
- Reuters estimates nat gas stocks rose between 75 and 92 Bcf last week.
5 min WTI: The market found a spark with the release of the OPEC+ headline. The rally has faded quickly but the daily trend remains higher.
