Outlook: The energy complex is finding a boost today following reports of protests in Libya. The two key ports account for over 400,000 bpd of crude flows and represent a third of the country's exports. President Trump touted tariffs again yesterday but this time speaking to a broader tariff of 2.5% across the board. Semiconductors, steel, and aluminum were product areas cited specifically while energies were not mentioned. The recent round of sanctions against Russia continues to show signs of effectiveness with Middle East premiums increasing relative to WTI as buyers look for the best alternative to Russian oil. Refinery maintenance season is on the doorstep with several refiners across multiple PADDs beginning the process this week. Basis values could find support as production goes offline.
Crude
- Protesters in Libya prevented crude loadings at Es Sidra and Ras Lanuf ports which puts 450,000 bpd of exports at risk. (Reuters)
- President Donald Trump told reporters yesterday that he wants to impose a 2.5% tariff across the board, which would include semiconductors, steel, and aluminum.
- WTI’s discount to Dubai crude fell to -$5.68, lowest since September 2022.
- A Bloomberg survey expects Saudi Aramco to increase oil prices to Asia for March sales.
- Reuters estimates crude stocks rose 3.7 million barrels last week.
- The API will report inventories today at 3:30 pm CT.
- The Fed will announce its rate decision on Wednesday. Rates are expected to be left unchanged.
- As of 8:48 am CST: Brent crude oil up $0.61 to $77.69, US dollar index up $0.472 to 107.813 while the nearby e-mini S&P 500 futures contract down 21.25 to 6025.00.
Diesel
- Reuters estimates diesel stocks fell 2.8 million barrels last week.
- Russia’s 340,000 bpd Ryazan oil refinery halted operation after a Ukrainian drone strike last week.
- Rack basis discounts may be presenting opportunities to fill storage and hedge by selling futures. This strategy will put you in a long-term position and protect against downward futures moves.
Gasoline
- Reuters estimates gasoline stocks rose 2.0 million barrels last week.
- Gasoline fundamentals remain bearish with builds expected over the next few weeks.
- The RVP transition spread, March-April, trades around -22 cents which is down 4 cents since December.
Propane
- Prompt Conway Swaps are indicated at .8800 while Belvieu is trading at .8900.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.7950.
- Conway propane is trading at 51% to WTI.
Natural Gas
- Overnight weather runs removed 5 HDD through the two-week forecast.
- US weighted HDDs rose by 50 last week and were 57 HDDs above the long term average.
- Reuters estimates nat gas stocks fell between 312 and 332 bcf last week.
- Tomorrow is LTD for February NG.
Continuous Daily NG: Continuous natural gas is testing its 50 DMA ahead of tomorrow prompt expiration. Weather runs continue to trend warmer keeping the pressure on.
