Outlook: Energies are finding strength this morning with a move correlated to the weakness in the US dollar which started to slide around 4:00 am CT. A new round of Chinese stimulus and expectations for a larger than expected crude and diesel draw may be providing an additional tailwind. The energy complex will be on track for a weekly gain if it can hold intra-day momentum, which has been a challenge amidst the thin trade this week. The EIA will report inventories today at noon after an extended delay due to the Christmas holiday falling on a Wednesday. Expect low liquidity to remain a theme through the new year next week.
Crude
- Chinese officials plan to sell 3 trillion Yuan in a special treasury bond sale in 2025 to support consumption and investment.
- US crude exports to China fell by 46% this year. China has dropped from the second leading purchaser to the sixth with the decline.
- Fed Fund futures suggest Fed rate cuts of less than 40 bps in 2025, down from 125 bps after the cut in September.
- Reuters estimates crude stocks fell 2 million barrels last week.
- The API survey showed crude stocks fell 3.2 million barrels last week.
- The EIA will report inventories today at 12:00 pm CT.
- As of 8:02 am CST: Brent crude oil up $0.62 to $73.87, US dollar index down $0.206 to 107.923 while the nearby e-mini S&P 500 futures contract down 30.25 to 6065.00.
Diesel
- Fuel stocks in Singapore saw their largest decline since 2004 yesterday. The drop of 7.3 million barrels was almost entirely fuel oil stocks which fell 7.2 million barrels.
- A gas leak at BP’s Whiting refinery caused a brief spike in Chicago basis levels yesterday. The refinery continues to operate at its normal rate.
- Reuters estimates diesel stocks fell 1.1 million barrels last week.
- The API survey showed diesel stocks fell 2.5 million barrels last week.
- Tuesday is LTD for January HO.
Gasoline
- Reuters estimates gasoline stocks fell 1.1 million barrels last week.
- The API survey showed gasoline stocks rose 3.9 million barrels last week.
- Tuesday is LTD for January RBOB.
Propane
- Prompt Conway futures are trading at .7300 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 2.6 million barrels last week.
Natural Gas
- Overnight weather runs added 5 HDDs through the two-week forecast.
- Today is LTD for January NG.
- Reuters estimates nat gas stocks fell between 100 and 94 Bcf last week.
Continuous Daily HO: Diesel is the strong leg today as it trades up over 3 cents this morning. A close above the 9 DMA could be supportive heading into contract expiration next Tuesday.
