Outlook: Energies were higher early this morning but have since reversed into negative territory. All eyes are on the Presidential Inauguration today and the executive orders that may follow. President-elect Donald Trump is expected to invoke emergency powers to boost domestic energy production and reverse President Joe Biden’s climate change actions. Trump is expected to enable new oil and gas development on federal lands in a direct roll-back. The Wall Street Journal is reporting that tariff decisions won’t be announced today but an evaluation of trade relationships with China, Canada, and Mexico will be discussed. Iranian oil is another area of focus but it remains unclear where that falls in the order of business. Trump has expressed intent to end the war between Russia and Ukraine but has not spoken in regard to the sanctions placed on Russian oil on January 10th. Flows have already showed signs of disruption with sanctioned tankers idle outside of China. Expect choppy trade with a steady flow of headlines this week.
Crude
- Today is Inauguration Day and executive orders from President Trump will be the area of focus this week.
- The cost to hire an oil supertanker on key routes to China has double since the US imposed sanctions on Russia. (BBG)
- Around 4.2 million barrels of crude sanctioned by the US is idling off China. (BBG)
- India has received 4.5 million barrels of crude from Russia on sanctioned vessels since the US announced new measures on January 10th. (BBG)
- Goldman Sachs estimates the oil market is pricing in a 40% probability of 25% US tariff on Canadian goods.
- WTI net bullish bets fell for the first time in five weeks through last Tuesday. (COT)
- Baker Hughes reported oil rigs fell by 2 to 478 last week.
- Tomorrow is LTD for February WTI.
- As of 8:43 am CST: Brent crude oil down $0.82 to $79.97, US dollar index down $1.120 to 108.227 while the nearby e-mini S&P 500 futures contract up 43.25 to 6077.00.
Diesel
- The Nymex heating oil net-short position narrowed by 9k lots to the smallest since July; 5th straight net addition, and the longest run since August 2022.
- Group basis rose ~5 cents on Friday to -27c. Futures 5mo time spread trades around +24.5c.
- Continuous HO has eclipsed the July high of $2.6595.
Gasoline
- Phillips 66 reported a unit upset at its 356,000 bpd Wood River, Illinois refinery.
Propane
- Prompt Conway futures are trading at .9675 while Belvieu is trading at .9800.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8100.
- Conway propane is trading at 52% to WTI.
Natural Gas
- Continuous NG gapped lower and below its 9-day moving average this morning.
- Warmer weather revisions have developed behind the current cold snap.
- Baker Hughes reported US nat gas rigs fell by 2 to 98 last week.
Continuous Daily HO:
