Outlook: The energy complex will look to snap a 3 week streak of losses barring a reversal lower today. It’s been another choppy week but overall markets will look to finish not far from where they started. President Trump announced his reciprocal tariff plan yesterday which is expected to go into effect on April 1st. The market was friendly to a later than expected date of enforcement. A revisit of tariffs against Canada and Mexico may quickly sneak up on the market after previously being delayed until March after both countries made concessions to help secure borders. Any positive momentum across the complex is quickly met with headwinds due to the prospect of the Russia and Ukraine war ending and planned OPEC+ production increases. Hamas said yesterday they were ready to release hostages again but we may not receive confirmation of the release until the weekend. The Middle East conflict had not yet impacted energy supplies which may again limit the addition of risk premium. Energies appear indecisive this morning which may leave them vulnerable to any intra-day developments to determine how the week finishes.
Crude
- US Treasury Secretary Scott Bessent said Trump remains committed to cut Iranian crude exports to 100,000 bpd. (BBG)
- President Trump announced his “Fair and Reciprocal Plan” for trade yesterday, which includes matching other countries tariffs, taxes, and non-tariff barriers.
- President Trump announced yesterday that the US and India have reached an agreement that will involve India importing more US crude to narrow the trade deficit.
- Nigeria’s oil production average 1.54 mbpd in January, up 60,000 bpd from December and 103% of it’s OPEC+ quota.
- Baker Hughes will report rig counts at noon CT.
- As of 8:06 am CST: Brent crude oil up $0.49 to $75.51, US dollar index down $0.536 to 106.777 while the nearby e-mini S&P 500 futures contract down 1.25 to 6134.00.
Diesel
- US Diesel stocks remain below both year-ago levels and 5-year average levels.
- Basis curves remain in Contango which incentivizes buying nearby values before deferred.
- Group 3 basis +4.75 to -16.25c.
- Chicago diesel basis flat at -20c.
Gasoline
- US weekly gasoline demand was at a 7-week high last week.
- Last week’s stock decline was the first for gasoline in nearly 3 months.
- Europe’s ARA hub saw petroleum stocks fall 2.1% on the week, largely led by gasoline draws.
Propane
- Prompt Conway futures are indicated at .9075 while Belvieu is trading at .9175.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8250.
- Conway propane is trading at 54% to WTI.
- The EIA reported propane stocks fell 2.5 million barrels last week vs -2.9 mb est.
Natural Gas
- Overnight weather runs removed 1 HDDs through the two-week forecast.
- The EIA reported nat gas stocks fell 100 Bcf last week which fell within industry estimates.
- US stocks sit 2.8% below 5-year average levels.
- Dutch TTF is off another 3.5% today and is on track to close down 11% on the week.
Continuous Weekly HO: The weekly charts still look bullish for diesel despite a wave of bearish headlines.
