Outlook: Energies have bounced in a tight range over the last several sessions with a lack of fresh drivers present. Reports that OPEC+ may delay any production increases until the end of Q1 2025 could be providing a lift today but gains overall remain muted. OPEC+ originally planned to begin production increases with a 180,000 bpd increase in December, but a softer demand view and a lower price environment have been cited as reasons for the delays. With supply surpluses forecasted through next year, the group may continue to face challenges with these decisions as members of the group grow increasingly frustrated with slipping market share. The group will meet on Thursday to finalize its agreement. Propane values have also remained rangebound following the rest of the complex. Conway swaps for next winter are still holding below 80 cents which may be favorable pricing for early layers. Please reach out for firm values.
Crude
- OPEC+ is expected to delay production increases until the end of the first quarter, four OPEC+ sources told Reuters.
- OPEC+ is estimated to be throttling back 5.86 mbpd of crude production in total but only 2.2 mbpd are scheduled for the first round of increases through 2025. (Reuters)
- Russia’s seaborne crude exports rose to 3.36 mbpd last week while 4-week average exports rose 50,000 bpd to 3.13 mbpd. This was the first increase in 3 weeks. (BBG)
- Goldman Sachs sees WCS crude dropping below $40 by 2026 if President-elect Donald Trump implements a proposed 25% tariff.
- Global crude in floating storage fell 2.5% last week to 68.74 MB. (BBG)
- The API will report its inventory survey at 3:30 pm CT today.
- Reuters estimates crude stocks fell 2.1 million barrels last week.
- OPEC+ will meet on Thursday this week.
- As of 8:59 am CST: Brent crude oil up $0.91 to $72.74, US dollar index down $0.300 to 106.146 while the nearby e-mini S&P 500 futures contract down up 5.25 to 6057.00.
Diesel
- An upset at Exxon’s Joliet, Illinois refinery was reported this morning. The refinery has a capacity of 251,800 bpd. (Reuters)
- Reuters estimates diesel stocks rose 2.3 million barrels last week.
- Managed money decreased Nymex diesel net length by 2.4k lots through Tuesday last week.
Gasoline
- Reuters estimates gasoline stocks rose 700,000 barrels last week.
- Managed money decreased Nymex gasoline net length by 1.1k lots through Tuesday last week.
Propane
- Conway futures are trading at .7475 while Belvieu is trading at .7975.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7550.
- Conway propane is trading at 44% to WTI.
Natural Gas
- Overnight weather runs removed 2 HDDs through the two-week forecast.
- US natural gas inventories entered the heating season at their highest level since 2016 and sit 6% above 5-year average levels.
- Reuters estimates nat gas stocks changed between -42 Bcf and +59 Bcf last week.
Continuous Daily WTI: Crude is testing its 9 DMA today and a close above could be a bullish short-term signal.
