Outlook: Energies are again sliding lower this morning with RBOB showing as the weak leg. Refined product charts look more supportive than crude this week with crude breaking down to test support at its 50 DMA today. A close below would be viewed as a bearish technical indication. The 100 DMA isn’t far beyond the 50 DMA and will be the next test before $70. Despite the reintroduction of the maximum pressure campaign which pushed Iranian crude exports near zero in Trump's last presidency, markets seem to hold bearish conviction. President Trump has expressed intent to work with Iran to avoid implementing these sanctions which could very well be the key factor here. Every day has seemingly developed new details in regard to tariffs and sanctions and that’s a trend that will continue to spur volatility. Shifting to US fundamentals, the API survey revealed larger than expected prints across the board yesterday afternoon which grabbed traders' attention. We’ll look to the EIA stats later this morning for further insight.
Crude
- President Trump reintroduced his “maximum pressure” campaign against Iran which aims to curtail nuclear developments and limit crude exports. (Reuters)
- Iran produces ~3.3 mbpd of oil.
- Iran’s oil minister said imposing sanctions on crude producers would destabilize energy markets. (Reuters)
- OPEC oil output is estimated to have fallen by 50,000 bpd in January. (Reuters)
- A Reuters poll expects WTI to average $70.40 in 2025, down 46 cents from it’s December forecast.
- The API survey showed crude stocks rose 5 million barrels last week.
- Reuters estimates crude stocks rose 3.3 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- Nonfarm Payrolls will be reported on Friday.
- As of 8:13 am CST: Brent crude oil down $0.82 to $75.37, US dollar index down $0.360 to 107.600 while the nearby e-mini S&P 500 futures contract down 15.25 to 6048.00.
Diesel
- The API survey showed diesel stocks fell 6.9 million barrels last week.
- Reuters estimates diesel stocks fell 2 million barrels last week.
- Rack basis discounts continue to trend favorably for storing product ahead of demand season.
- Prompt HO spread is trading around 5 cents.
Gasoline
- The API survey showed gasoline stocks rose 5.4 million barrels last week.
- Reuters estimates gasoline stocks fell 300,000 barrels last week.
Propane
- Prompt Conway futures are indicated at .8900 while Belvieu is trading at .9125.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8025.
- Conway propane is trading at 51% to WTI.
- OPIS estimates propane stocks fell 3.5 million barrels last week.
Natural Gas
- Overnight weather runs were unchanged through the two week forecast.
- Continuous NG may find support at its 100 DMA near $3.08.
- Reuters estimates nat gas stocks fell between 138 and 182 Bcf last week.
Continuous 321 Crack:
