Outlook: After crude tested trendline support yesterday, markets appear to be settling into a range with crude resistant to close below $68. The US dollar has pushed to a yearly high this morning which could limit upside today, but dollar strength overall hasn’t been enough to press prices below technical support. Demand has been in focus this week with OPEC, EIA, and IEA, all releasing their monthly reports. OPEC, who is considerably more bullish than the other two, lowered its demand forecasts for both 2024 and 2025 while the EIA and IEA made moderate increases for this year. A notable development is that India is now expected to be the leading source of oil demand growth next year, taking the spot from China which continues to face economic headwinds. The EIA sees China’s oil demand growth at 100,000 bpd compared to India at 300,000 bpd. Markets today could find further influence from the EIA’s weekly inventory data due out at 10:00 am CT. PPI reports at 7:30 am CT and Fed Chair Jerome Powell’s speech at 1:00 pm CT could influence the dollar.
Crude
- The IEA raised its 2024 global oil demand growth forecast by 60,000 bpd to 920,000 and left its 2025 forecast unchanged at 990,000 bpd.
- The IEA expects an oil supply surplus of over 1 million barrels in 2025.
- OPEC remains the most bullish of the three groups this week with 2024 demand growth at 1.84 mbpd and 2025 growth at 1.54 mbpd.
- The US dollar has risen to a 1-year high this morning.
- US October CPI was reported at 2.6% vs 2.6% est. and 2.4% last. Core CPI remained flat at 3.3%.
- The API survey showed crude stocks fell 777,000 barrels last week.
- Reuters estimates crude stocks rose 100,000 barrels last week.
- The EIA will report inventories today at 10:00 am CT.
- As of 7:01 am CST: Brent crude oil up $0.40 to $72.68, US dollar index up $0.285 to 106.767 while the nearby e-mini S&P 500 futures contract is up 5.25 to 6021.00.
Diesel
- Reuters estimates diesel stocks rose 200,000 barrels last week.
- The API survey showed diesel stocks rose 1.1 million barrels last week.
Gasoline
- Reuters estimates gasoline stocks rose 600,000 barrels last week.
- The API survey showed gasoline stocks rose 312,000 barrels last week.
- Continuous RBOB has trendline support near $1.9350.
Propane
- Conway futures are trading at .7325 while Belvieu is trading at .7950.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7500.
- Conway propane is trading at 45% to WTI.
- OPIS estimates propane stocks fell 1.2 million barrels last week.
- Year-over-year propane stocks are up 2.1%.
Natural Gas
- NG futures clipped $3.00 for the first time in a month but failed to close above the mark.
- Weather in the lower 48 is expected to remain above normal through Nov 20th but shift colder in the back third of the month.
- Reuters estimates nat gas stocks rose between 38 and 76 Bcf last week.
- The EIA will report inventories at 9:30 am CT.
Daily US Dollar: The US dollar has continued is surge post-election and is now trading at yearly highs.
