Outlook: The energy complex is firmer this morning finding support from technicals and a larger-than-expected crude draw reported from the API yesterday afternoon. Energies lifted from their morning lows to find a supportive close yesterday and further strength in after-hours trade looks to be carrying over. The market has been given much for fresh news to chew on this week so we’ll continue to look for direction from the EIA inventory report later this morning. The Fed decision later today isn’t expected to spark a significant reaction with a 25-basis point cut largely baked in. The focus will more likely fall on the press conference to follow and any indication of what’s to come in January. The CME FedWatch tool suggests an 80% chance of a pause in the cut cycle for January ahead of today’s announcement.
Crude
- Iran’s revolutionary guard is now controlling 50% of the nation’s crude exports, which is up from 20% three years ago. (Reuters)
- President-elect Donald Trump’s transition team recommended various changes to reduce support for electric vehicles and support domestic oil and gas production. (Reuters)
- The EIA released a report yesterday estimated that US Gulf Coast unplanned outages totaled 295 kbpd in September and 110 kbpd in November due to Hurricanes.
- Continuous WTI found support at its 50 DMA yesterday.
- Tomorrow is LTD for January WTI.
- The Fed will announce its interest decision today at 1:00 pm CT. The industry expectation is for a 25 basis point cut.
- The EIA will report inventories at 9:30 am CT.
- Reuters estimates crude stocks fell 1.9 million barrels last week.
- The API survey showed crude stocks fell 4.7 million barrels last week.
- As of 8:08 am CST: Brent crude oil up $0.54 to $73.73, US dollar index up $0.047 to 107.003 while the nearby e-mini S&P 500 futures contract down 0.25 to 6053.00.
Diesel
- Reuters estimates diesel stocks fell 500,000 barrels last week.
- The API survey showed diesel stocks rose 744,000 barrels last week.
- Continuous HO found support at its 50 DMA yesterday.
Gasoline
- Reuters estimates gasoline stocks rose 1.6 million barrels last week.
- The API survey showed gasoline stocks rose 2.45 million barrels last week.
- Continuous RBOB closed below its 9 DMA for the first time in 2 weeks yesterday.
Propane
- Prompt Conway futures are trading at .7275 while Belvieu is trading at .7650.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7450.
- Conway propane is trading at 45% to WTI.
- OPIS estimates propane stocks fell 2.1 million barrels last week.
Natural Gas
- Overnight weather runs removed 3 HDDs through the two-week forecast.
- The EIA estimates US Gulf natural gas production was reduced by 11% in September and 3% in November due to storms.
- LSEG expects total gas demand in the lower 48 to rise from 123.9 this week to 128.2 next week.
- Reuters estimates natural gas stocks fell between -129 and -115 Bcf last week.
Continuous Daily NG: Natural gas is stronger again today despite another decline in HDDs through the two-week forecast. Stronger feedgas demand for LNG is being cited for the strength today. (LSEG)
