Outlook: The energy complex is idle this morning as it digests mixed sentiment out of China. China’s oil imports rose for the first time in 7 months in November, rising to a 3 month high of 11.86 mbpd. While the data point alone looks positive, indications that barrels are being allocated to strategic reserves is a less supportive narrative. Demand remains the area of focus and China’s National Petroleum Corp, one of the country's largest energy producers, shortened its outlook and now expects China’s petroleum demand to peak next year. A shift away from gas and diesel was cited as a key driver as compressed natural gas and electric-powered vehicles grab market share. We’ll get additional demand forecast updates from the EIA, IEA, and OPEC this week as each releases its monthly report. OPEC’s decision to delay production increases could cause a shift in 2025 supply and demand forecasts.
Crude
- China National Petroleum Corp estimates China’s oil demand could reach 770 million tons in 2025 and then begin gradual declines through 2060. Previously they estimated demand would peak in 2030. (BBG)
- China’s crude oil imports rose to a 3-month high of 11.86 mbpd in November. (BBG)
- Global crude in floating storage fell 12% last week to 62.74 million barrels. (BBG)
- Continuous WTI is testing resistance at its 9 DMA today. A close above could be viewed as supportive short-term.
- The EIA will publish its STEO report around noon today.
- The API will report its inventory survey at 3:30 pm CT.
- Reuters estimates crude stocks fell 1.3 million barrels last week.
- As of 8:43 am CST: Brent crude oil down $0.10 to $72.04, US dollar index up $0.199 to 106.344 while the nearby e-mini S&P 500 futures contract up 0.25 to 6065.00.
Diesel
- Reuters estimates diesel stocks rose 900,000 barrels last week.
- India is planning to increase refining capacity by 20% to 6.2 mbpd by 2030 to keep pace with refined product demand.
- Continuous HO is testing resistance at its 9 DMA today. A close above could be viewed as supportive short-term.
Gasoline
- Reuters estimates gasoline stocks fell 200,000 barrels last week.
- India is planning to expand ethanol blending by 20% next year and biodiesel blending by 5% by 2030.
- Phillips 66 announced the closure of its Wilmington refinery in LA at the end of 2025 due to the uncertainty of long-term sustainability.
Propane
- Prompt Conway futures are trading at .7350 while Belvieu is trading at .7575.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7425.
- Conway propane is trading at 46% to WTI.
Natural Gas
- Overnight weather runs removed 5 HDDs through the two-week forecast.
- China’s annual coal imports hit a record higher with YTD imports up nearly 15%.
- India’s sales of cars that run on compressed natural gas totaled 626k in the first 10 months of 2024, only 6% behind diesel passenger vehicles.
Continuous Daily WTI:
