NYMEX markets will be closed on Wednesday, January 1st in observance of the New Year's holiday. Trade will resume at 5:00 pm CT on January 1st.
Outlook: Energies are higher to start the week off on what’s expected to be another light trading session ahead of the New Year. Products related to heating demand are the story this morning as a significant cold snap is expected to impact the majority of the country into next week. Natural gas is the big mover on the day, trading up over 50 cents. The January contract eclipsed the $4 mark ahead of expiration last week and the February contract, which is now the prompt contract, looks poised for a retest this week. Both natural gas and propane-weighted HDDs saw an increase over the weekend and propane HDDs are now tracking with the 30-year average. This is a much more supportive picture than just a few weeks ago and should be constructive for retailers looking to move product. Diesel may also be drafting support from the forecast as it trades up over 4 cents on the day while gasoline trades up just 1 cent.
Crude
- China issued at least 3 mbpd of crude import quotas to independent refiners in the second batch for 2025, raising the total allocation for the year to 3.17 mbpd. (Reuters)
- IIR expects US oil refiner offline capacity to reach 149,000 bpd this week, up from 41,000 bpd last week.
- On Friday, the EIA reported crude stocks fell 4.2 million barrels in the previous week.
- The EIA reported US crude exports fell 1.1 mbpd (24%) while input to refiners rose 205,000 bpd.
- Baker Hughes reported oil rigs remained flat at 483 last week. Oil rigs are up 6 m/m and down 17 y/y.
- Chinese NBS manufacturing data will be reported tonight.
- As of 7:45 am CST: Brent crude oil up $0.20 to $74.37, US dollar index down $0.067 to 107.940 while the nearby e-mini S&P 500 futures contract down 71.25 to 5955.00.
Diesel
- Diesel cracks are firmer this morning with widespread cold developing in the forecast. Diesel is more sensitive to weather in the North East where fuel oil is used more for heating.
- Friday, the EIA reported diesel stocks fell 1.7 million barrels in the previous week vs -1.1 mb est.
- The EIA reported diesel demand fell 245,000 bpd while exports rose 226,000 bpd.
- A spill was reported at Citgo’s 177,000 bpd Lemont, Illinois refinery yesterday.
- Tuesday is LTD for January HO.
Gasoline
- Friday, the EIA reported gasoline stocks rose 1.6 million barrels in the previous week vs -1.1 mb est.
- The EIA reported gasoline demand rose 81,000 bpd to 9.008 mbpd.
- Tuesday is LTD for January RBOB.
Propane
- Prompt Conway futures are trading at .7325 while Belvieu is trading at .7725.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7500.
- Conway propane is trading at 45% to WTI.
- Friday, the EIA reported propane stocks fell 4.5 million barrels in the previous week vs -2.6 mb est.
Natural Gas
- Weekend weather runs added 12 HDDs through the two-week forecast.
- Baker Hughes reported natural gas rigs remained flat at 102 last week. Nat gas rigs are up 2 m/m and down 18 y/y.
- Friday, the EIA reported natural gas stocks fell 93 Bcf in the previous week. Natural gas stocks a trending closely with last year’s levels but remain 166 Bcf above 5-year average levels.
Continuous Daily NG: Natural gas futures are up over 50 cents on the day with high of $3.986.
