Outlook: The energy complex is sitting idle ahead of today’s EIA stats and Federal Reserve interest rate decision. The API survey yesterday fell relatively in line with earlier industry estimates. They did show a larger draw in diesel which shouldn’t be too surprising if confirmed by the EIA today with the report encompassing the winter vortex last week. Crude has been on a streak of draws but may look to end that run with a heavy consensus build estimated. The Fed decision is pretty baked in today with overwhelming odds that rates remain unchanged. The focus will be on the press conference for any rhetoric that wavers from the current forecast. As of this morning, the market is anticipating tariffs on Canada, Mexico, and others to begin over the weekend. Tariffs can pose an inflationary risk which could pressure the Fed to hold interest rates higher for longer.
Crude
- President Trump’s press secretary reiterated that tariffs on Canada and Mexico are still planned for February 1st.
- Saudi Arabia’s energy minister and several OPEC+ counterparts held discussions following President Trump’s call for lower crude prices. The group remains unlikely to adjust the current plan. (Reuters)
- OPEC+ will meet on Monday to discuss current oil policies.
- Protesters is Libya are allowing eastern ports to operate for two weeks to allow the NOC to respond to demands. (BBG)
- A cargo of Canadian crude to Brazil shipped out of Vancouver for the first time since 2016. (BBG)
- Reuters estimates crude stocks rose 3.2 million barrels last week.
- The API survey showed crude stocks rose 2.9 million barrels last week.
- The Fed will announce its rate decision today at 1:00 pm CT. Rates are expected to be left unchanged.
- As of 7:53 am CST: Brent crude oil down $0.21 to $77.28, US dollar index up $0.378 to 107.244 while the nearby e-mini S&P 500 futures contract down 15.25 to 6081.00.
Diesel
- Russia’s oil product exports are on track to hit an 11-month high with flows through last week totaling 2.3 mbpd.
- Reuters estimates diesel stocks fell 2.3 million barrels last week.
- The API survey showed diesel stocks fell 3.8 million barrels.
- Friday is LTD for February HO.
Gasoline
- Reuters estimates gasoline stocks rose 1.3 million barrels last week.
- The API survey showed gasoline stocks rose 1.9 million barrels last week.
- Friday is LTD for February RBOB.
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.
- OPIS estimates propane stocks fell 4.4 million barrels last week.
Natural Gas
- Overnight weather runs removed 15 HDD through the two-week forecast.
- From the weekend through today, 43 HDDs have been removed from the two week forecast.
- Reuters estimates nat gas stocks fell between 308 and 332 bcf last week.
- Today is LTD for February NG.
Continuous Daily RBOB: RBOB has appeared more fundamentally bearish than diesel and is nearing some significant support levels at the 50 & 100 DMA along with $2.00.
