Outlook: Energies have found a firmer tone this morning with markets higher across the board. After conquering short-term technical resistance this week, all three contracts are approaching their respective 50 DMA which could provide resistance. Aiding the move today are reports that the US may look to tighten sanctions on Russian oil. The Kremlin responded to the reports today suggesting the Biden Administration wants to leave a difficult legacy for US-Russia relations. OPEC released its monthly report this morning which leaned bearish as it revised both 2024 and 2025 global oil demand growth lower for the fifth consecutive time. OPEC has been the most bullish of the three (EIA, IEA, OPEC) so the lower revisions aren’t necessarily a surprise to the trade, especially given the lack of growth being reflected in China. The IEA, who has been the least bullish on demand growth, will release its monthly report tomorrow morning.
Crude
- The Biden administration announced intentions to increase sanctions against Russia. Details have yet to be released but Russia’s crude exports are a likely target. (BBG)
- OPEC released its monthly report today which cut 2025 global oil demand growth by 90,000 bpd to 1.45 mbpd. 2024 global oil demand growth was lowered by 210,000 bpd to 1.61 mbpd.
- The IEA will release its monthly report tomorrow morning. The group has been the more bearish with 2024 global oil demand growth posted at just 920,000 bpd for 2024.
- The API survey showed crude stocks rose 500,000 barrels last week.
- Reuters estimates crude stocks fell 0.9 million barrels last week.
- The EIA will report inventories today at 9:30 am CT.
- US November CPI and Core CPI fell in line with expectations today. Headline CPI was reported at 2.7%, up 0.1% from October.
- As of 8:31 am CST: Brent crude oil down $0.79 to $72.98, US dollar index up $0.128 to 106.526 while the nearby e-mini S&P 500 futures contract up 30.25 to 6076.00.
Diesel
- Reuters estimates diesel stocks rose 1.4 million barrels last week.
- The API survey showed diesel stocks rose 2.5 million barrels last week.
- Basis levels across the Group and Chicago market remain soft which may present opportunities to fill storage and hedge by selling futures.
Gasoline
- Reuters estimates gasoline stocks rose 1.7 million barrels last week.
- The API survey showed gasoline stocks rose 2.9 million barrels last week.
Propane
- Prompt Conway futures are trading at .7250 while Belvieu is trading at .7625.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7325.
- Conway propane is trading at 45% to WTI.
- OPIS estimates propane stocks fell 2.1 million barrels last week.
Natural Gas
- Overnight weather runs added 2 HDDs through the two-week forecast.
- The EIA’s STEO reported showed 2024 and 2025 US dry natural gas production at 103.2 Bcf/d and 103.7 Bcf/d, respectively, from 103.3 Bcf/d and 104.5 bcf/d in their October forecast.
- Reuters estimates natural gas stocks fell between -176 and -59 Bcf last week.
Continuous Daily HO:
