Outlook: Energies closed lower on Friday despite holding gains earlier in the shortened session. Markets are looking to rebound this morning and have recovered most of Friday’s losses. Positive economic data out of China along with continued turmoil in the Middle East are supportive elements affecting today’s trade. Despite a ceasefire going into effect last Wednesday, Lebanese authorities said at least two people were killed today in an Israeli strike on southern Lebanon. While China’s factory activity expanded for the second consecutive month, the threat of additional tariffs next year may dampen bullish sentiment. Lastly, OPEC+ delayed its meeting which was originally scheduled for Sunday over the weekend. They will now hold a virtual meeting on December 5th and are expected to announce further delays to increasing output.
Crude
- China’s factory activity expanded at its fastest pace in five months in November. (Reuters)
- Both Israel and Lebanon have accused each other of breaching the ceasefire agreement since it went into effect last Wednesday.
- OPEC+ has delayed its meeting until December 5th.
- Kazakhstan increased its oil output by 12% to 1.4 mbpd last month.
- A Reuter’s poll estimates WTI crude will average $70.69 in 2025, down ~$2 from its October poll.
- Baker Hughes reported rig counts fell by 2 to 477 last week.
- US Shale operating costs have risen 27% in the last 5 -years.
- US manufacturing data will be reported at 9:00 am CT.
- The Commitment of Traders report will be released today due to last week's Thanksgiving holiday.
- As of 8:40 am CST: Brent crude oil up $0.77 to $72.61, US dollar index up $0.707 to 106.444 while the nearby e-mini S&P 500 futures contract is up 5.25 to 6056.00.
Diesel
- India’s diesel sales rose 5.9% y/y in November. (BBG)
- Continuous HO is testing resistance at its 50 DMA ($2.2848) today.
Gasoline
- Russia announced that it lifted its export ban on gasoline on Saturday. The ban was originally planned to be lifted at the end of the year. (Reuters)
- India’s gasoline sales rose 8.3% y/y in November. (BBG)
Propane
- Conway futures are trading at .7750 while Belvieu is trading at .8225.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7525.
- Conway propane is trading at 44% to WTI.
Natural Gas
- Weekend weather runs removed 16 HDDs through the two-week forecast.
- Dutch TTF is up 1% this morning to its highest level in 13 months.
- Baker Hughes reported nat gas rigs rose by 1 to 100.
US Shale Operating Costs:
