Outlook: Oil prices are on track to end the year very close to where they finished in 2023 while refined products are on pace for a yearly decline. As a result, crack spreads saw a lower trajectory throughout the year although utilization rates still remain robust. The market is friendly to economic data out of China overnight which revealed optimism for both the non-manufacturing and manufacturing sectors. A trend of expansion has begun to develop but investors still remain leery that growth targets will be hit. The heating products that surged yesterday after colder weekend weather revisions are seeing a softer tone today. Diesel is shedding premium to gas but remains positive while natural gas is down around 20 cents. Trade is expected to remain thin today with the market closed tomorrow due to the New Year's holiday.
Crude
- Oil prices are on track for a second consecutive yearly loss.
- WTI’s closing price for 2023 was $71.56.
- WTI traded in a $22.40 range this year with a high of $86.67 and a low of $65.27.
- China’s non-manufacturing PMI rose to 52.2 in December which exceeded expectations while the manufacturing sector saw expected expansion for the third consecutive month.
- The WTI long to short ratio sits around 3.7 to 1 which could be supportive for spec buying.
- A Reuters poll estimates WTI crude will average $70.86 in 2025, up ~20 cents from the previous poll.
- The API survey will be released today at 3:30 pm CT.
- Reuters estimates crude stocks fell 3 million barrels last week.
- 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 futures traded in a 93 cent range this year with a high of $2.97 and a low of $2.04.
- Managed money increased HO net length by 13.2k lots through last Tuesday (-10.4k shorts, +2.77k longs).
- Reuters estimates diesel stocks rose 3.5 million barrels last week.
- Today is LTD for January HO.
Gasoline
- Gasoline futures traded in a $1.00 range this year with a high of $2.85 and a low of $1.85.
- Managed money decreased RBOB net length by 10.7k lots through last Tuesday (-10.2k longs, +491 shorts).
- Reuters estimates gasoline stocks rose 400,000 barrels last week.
- Tuesday is LTD for January RBOB.
Propane
- Prompt Conway futures are trading at .7625 while Belvieu is trading at .7950.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7600.
- Conway propane is trading at 45% to WTI.
Natural Gas
- Overnight weather runs removed 12 HDDs through the two-week forecast.
- Managed money increased nat gas net length by 63.6k lots through last Tuesday (-59.3k shorts, +4.3k longs)
- Reuters estimates natural gas stocks fell between 127 and 141 Bcf last week.
- Today is the expiration of the Ukraine natural gas transit deal which will pause flows coming from Russia.
Continuous Daily WTI:
