Outlook: Energies are looking to establish some bullish momentum with prices moving higher for the second consecutive day. Two opposing forces continue to clash with tariffs threatening economic stress while sanctions targeting oil threaten global supply. Demand growth will remain in question if interest rates remain elevated but OPEC’s Secretary General spoke today reaffirming their commitment to keep global supply and demand balanced. A weaker demand view could result in further delays to OPEC’s planned production increases scheduled for Q2. A Reuters poll suggests trader sentiment is shifting toward fewer rate cuts this year and Jerome Powell is testifying on Capitol Hill this week. US inflation data is also due out tomorrow with industry expectations calling for headline inflation to remain flat at 2.9%. Core CPI, which excludes food and energy, is expected to fall 0.1% to 3.1%.
Crude
- President Trump officially ordered a 25% tariff on steel and aluminum imports late yesterday. (BBG)
- Hamas reported a delay to the release of Israeli hostages which was scheduled for Saturday. (BBG)
- Russia’s Sakhalin crude is backing up following US sanctions with 6.3 million barrels held on tankers that have been stationary for at least a week. (BBG)
- India’s oil minister said they expect more Venezuelan oil to come to market with consumers looking for alternatives to Russian product. (Reuters)
- OPEC’s Secretary-General said they will maintain a longer-term perspective when making production decisions. (BBG)
- Reuters estimates crude stocks rose 2.6 million barrels last week.
- The API will report its inventory survey at 3:30 pm CT.
- Interest rate cut probabilities are pricing just over a 50% chance of one rate cut by mid-2025. (Reuters)
- US January CPI will be reported tomorrow morning at 7:30 am CT.
- As of 8:28 am CST: Brent crude oil up $0.87 to $75.55, US dollar index up $0.245 to 108.245 while the nearby e-mini S&P 500 futures contract up 31.25 to 6080.00.
Diesel
- Reuters estimates diesel stocks fell 900,000 barrels last week.
- Motiva expanded its Port Arthur, Texas refinery to 654,000 bpd last year, making it the largest plant in the US. Refiners are favoring gradual expansion under the risk of slowing demand.
- Group 3 basis continued lower yesterday to close at -24c.
Gasoline
- Russia is considering a reinstatement of its gasoline export ban.
- The Nymex RBOB crack fell over 8% yesterday but is finding marginal strength today.
- Reuters estimates gasoline stocks rose 1.6 million barrels last week.
Propane
- Prompt Conway futures are indicated at .9275 while Belvieu is trading at .9425.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8175.
- Conway propane is trading at 54% to WTI.
Natural Gas
- Overnight weather runs added 14 HDDs through the two-week forecast.
- European natural gas prices have risen to their highest level in 2 years.
- Reuters estimates natural gas stocks fell between 91 and 107 Bcf last week.
Continuous Daily WTI:
