Outlook: The energy complex is relatively unchanged this morning but yesterday’s move allowed crude to close above $70 for the first time in several weeks. Diesel and gasoline futures also gained but failed to close above their 50 DMA. Gasoline futures will look to tackle the $2.00 mark before providing a more convincing test of the 50 DMA and remains the bearish leg of the complex despite inventories sitting at multi-year lows. AAA’s average retail gas price nearly dipped below $3.00 this week but momentum has stalled as it sits at $3.026. The IEA monthly report did not reveal any compelling revisions to their outlook and the group still expects a surplus next year despite delays in OPEC’s production increases. The group specifically stated that they expect a global oil surplus in 2025 even if OPEC were to hold off increases through the entire year.
Crude
- National Security Advisor Mike Waltz stated in an interview that we will see a huge shift on Iran once Trump enters the presidency. Iran is exporting around 1.8 mbpd of oil despite current sanctions in place.
- The IEA released its monthly report this morning which showed an increase in 2025 global oil demand by 100,000 bpd to 103.9 mbpd. The group forecasts global supply growth at 1.9 mbpd to 104.8 mbpd.
- The IEA estimates a surplus of 950,000 bpd next year even if OPEC delays production increases until 2026.
- The EIA reported crude stocks fell 1.4 million barrels last week.
- US crude production is estimated to have risen to a record 13.631 mbpd. Last week.
- As of 8:38 am CST: Brent crude oil down $0.37 to $73.16, US dollar index up $0.104 to 106.804 while the nearby e-mini S&P 500 futures contract down 14.25 to 6077.00.
Diesel
- The EIA reported a larger than expected build of 3.2 million barrels for diesel stocks last week.
- 4-week average diesel demand fell 4.3% to 3.747 mbpd last week.
- Total fuel stocks in Singapore rose for the sixth consecutive week and are on their longest run of gains since December 2000.
- Basis levels across the Group and Chicago market remain soft which may present opportunities to fill storage and hedge by selling futures.
Gasoline
- The EIA reported a larger than expected build of 5.086 million barrels last week.
- 4-week average gasoline demand fell 1.6% last week to 8.7 mbpd.
- US gasoline stocks are at their lowest seasonal level since 2021 and are 6 million barrels below the 10-year seasonal average.
Propane
- Prompt Conway futures are trading at .7350 while Belvieu is trading at .7725.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7425.
- Conway propane is trading at 45% to WTI.
- The EIA reported a larger than expected draw of 2.9 million barrels last week.
Natural Gas
- Overnight weather runs added 9 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 WTI:
