Outlook: Energies are sliding lower again today in what feels like a no news is bearish news move. Bullish considerations like declining Russian crude exports, expected declines in Angola’s crude exports, and declining production in Kazakhstan are floating around but haven’t proven to be strong enough headlines to bolster prices. Spillover from negative economic data out of China yesterday may be the catalyst this week that has traders shedding length. In the US, the Fed isn’t expected to surprise the market with overwhelming odds of a 25 basis point cut to interest rates expected to be announced tomorrow. Rhetoric in the press conference to follow could be more sensitive if it deviates from current projections looking into 2025. We’ll see the API stats this afternoon for another indication of US petroleum inventory changes last week before the EIA reports tomorrow morning.
Crude
- Soft consumer spending data from China yesterday continues to pressure markets today.
- Bloomberg is reporting that Israeli officials believe a ceasefire in Gaza is closer than ever and that efforts to a secure deal to free hostages and boost aid have made a breakthrough.
- Russian seaborne crude exports have fallen around 11% since October due to maintenance at their main export terminal. Four-week average volumes averaged 3.06 mbpd through last week. (BBG)
- The EU added 42 oil tankers to its list of sanctioned vessels yesterday as efforts expand against Russia. (BBG)
- The WTI-Brent spread was at its narrowest level since September yesterday.
- The Fed will announce its interest decision on Wednesday at noon. The industry expectation is for a 25 basis point cut.
- Reuters estimates crude stocks fell 1.9 million barrels last week.
- The API survey will be released at 3:30 pm CT today.
- As of 8:39 am CST: Brent crude oil down $0.74 to $73.16, US dollar index up $0.004 to 106.862 while the nearby e-mini S&P 500 futures contract down 29.25 to 6051.00.
Diesel
- Reuters estimates diesel stocks fell 500,000 barrels last week.
- Warmer weather revisions may be providing additional bearish pressure to diesel futures with losses outpacing RBOB and WTI.
- Russia’s weekly refinery output hit its highest levels since mid-August last week, rising to an average of 5.49 mbpd. (BBG)
Gasoline
- Reuters estimates gasoline stocks rose 1.6 million barrels last week.
- Phillips 66 reported a leak at its Wood River, Illinois refinery (356,000 bpd capacity) this morning. (Reuters)
Propane
- Prompt Conway futures are trading at .7250 while Belvieu is trading at .7650.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7450.
- 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 removed 7 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 -129 and -115 Bcf last week.
Continuous Daily HO: Diesel futures closed lower for the first time in six sessions yesterday and prices are seeing further downside today, pushing below several support levels.
