Outlook: The complex is digesting monthly reports from the EIA and OPEC along with a hot CPI print this morning. The EIA monthly report leaned slightly bearish, forecasting increases in US production and a global supply surplus through 2026. OPEC’s report shed little direction leaving their demand growth forecasts unchanged while report production fell ~100,000 bpd last month. The hot inflation reading is a topic in focus this morning with both headline and core CPI readings exceeding estimates. Equities sold off while treasury yields surged following the release of the data and rate-cut bets have quickly fled deeper into the year. The higher yields contribute to a higher cost of capital which can be suppressive and ultimately stunt demand for energies. Fed Chair Jerome Powell reiterated yesterday that they are not in a hurry to cut interest rates and this type of reading certainly reinforces the need for patience. Energies may look for renewed direction from the EIA weekly storage report later this morning. The API survey surprised with a build of 9 million barrels for crude which will be a number to watch.
Crude
- President Trump said yesterday he doesn’t expect Hamas to meet the hostage release deadline this Saturday. Israeli Prime Minister Netanyahu said the ceasefire will end if hostages aren’t released.
- OPEC released its monthly report today which left 2025 and 2026 global oil demand growth unchanged at 1.45 mbpd and 1.43 mbpd, respectively.
- OPEC+ oil production averaged 40.62 mbpd in January, down 118,000 bpd from December.
- The EIA expects a global oil surplus of 1 mbpd by 2026.
- China imported 11.1 mbpd of crude in 2024, down 200,000 bpd from 2023.
- Reuters estimates crude stocks rose 2.6 million barrels last week.
- The API survey showed crude stocks rose 9 million barrels last week.
- The EIA will report inventories at 9:30 am CT.
- US January CPI was reported at 3.0% vs 2.9% est. and 2.9% prev. Core CPI was reported at 3.3% vs 3.1% est.
- As of 8:00 am CST: Brent crude oil down $0.70 to $76.30, US dollar index up $0.448 to 108.414 while the nearby e-mini S&P 500 futures contract down 61.25 to 6031.00.
Diesel
- India’s diesel demand is expected to grow by 4% in 2026, according to Indian Oil’s chairman.
- Reuters estimates diesel stocks fell 900,000 barrels last week.
- The API survey showed diesel stocks fell 600,000 barrels last week.
- Group 3 basis continued lower yesterday to close at -24c.
Gasoline
- India’s gasoline demand is expected to grow 6%-8% in 2026. (Reuters)
- FGE estimates Asian overall gasoline supply will outpace demand by ~50,000 bpd in 2025 due to refinery expansion in China and India. (Reuters)
- Reuters estimates gasoline stocks rose 1.6 million barrels last week.
- The API survey showed gasoline stocks fell 2.5 million barrels last week.
Propane
- Prompt Conway futures are indicated at .9400 while Belvieu is trading at .9450.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8175.
- Conway propane is trading at 54% to WTI.
- OPIS estimates propane stocks fell 2.9 million barrels last week.
Natural Gas
- Overnight weather runs added 5 HDDs through the two-week forecast.
- HDD’s have been added for three consecutive days.
- Reuters estimates natural gas stocks fell between 91 and 107 Bcf last week.
- The EIA will report inventories tomorrow morning at 9:30 am CT.
Continuous 5min USD: A strong response from the US dollar following this morning's inflation reading. A higher US dollar can pressure dollar-based commodities due to higher costs for non-dollar currency holders.
