Outlook: The energy complex is lower this morning and remains on track for weekly losses. In what has been a relatively light week for fresh market drivers, no news has been bearish news. Technicals may certainly be at play in influencing trade with continuous WTI bouncing off resistance at its 100 DMA four times since last Friday. Yesterday was LTD for January WTI and the February contract slid into the prompt by gapping lower by 47 cents. RBOB futures are testing $1.90 today which has been an area of support that it hasn’t closed below since early September. Diesel futures are trading back below both the 50 and 100 DMA today which sit near $2.22 and $2.23, respectively. The stretch from now through the end of the year typically sees lighter trade volumes due to the holidays. Light volume can contribute to higher volatility which will be something to be mindful of if any market-moving headlines surface over the next two weeks.
Crude
- The US increased sanctions on tankers and companies allegedly transporting Iranian oil, adding nine vessels and eight companies to the list. (BBG)
- President-elect Donald Trump said today that the EU may face tariffs if the bloc does not cut its growing deficit with the US by making large oil and gas trades with the world’s largest economy. (Reuters)
- JPMorgan sees a 1.2 mbpd oil surplus developing in 2025 due to non-OPEC+ supply growth of 1.8 mbpd.
- India overtook China in 2024 as the largest source of global oil demand growth, accounting for 25% of total consumption.
- The US dollar has risen to 2-year highs this week.
- Baker Hughes will report rig counts at 12:00 pm CT.
- US PCE, which is the Fed’s preferred measure of inflation, was reported at 0.1% below estimates for both y/y and m/m prints.
- As of 8:07 am CST: Brent crude oil down $0.52 to $72.32, US dollar index down $0.426 to 107.980 while the nearby e-mini S&P 500 futures contract down 29.25 to 5839.00.
Diesel
- Group 3 diesel basis rose 2.5 cents yesterday to -15.5 cents.
- Chicago diesel basis remained unchanged at -25 cents.
- Singapore distillate stocks fell for the first time in two weeks.
Gasoline
- Group 3 gasoline rose a penny to -11 cents yesterday.
- Chicago CBOB fell 4.5 cents to -17 cents yesterday.
- Gasoline stocks at Europe’s ARA hub rose to their highest level in 13 months over the last week.
Propane
- Prompt Conway futures are trading at .7250 while Belvieu is trading at .7575.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7400.
- Conway propane is trading at 45% to WTI.
- The EIA reported propane stocks fell 2.9 million barrels last week vs -2.1 mb est.
Natural Gas
- Overnight weather runs removed 1 HDDs through the two-week forecast.
- The EIA reported a natural gas withdrawal of 125 Bcf for last week.
- Total working gas inventories are now only 20 Bcf above last year’s levels and 132 Bcf above the 5-year average.
Continuous Daily HO:
