Outlook: A lack of fresh developments overnight has energies focusing on production freeze-offs and a disruption of flows on the CPC pipeline. North Dakota has seen up to 150,000 bpd of crude production knocked offline while the damage to the CPC could disrupt as much as 380,000 bpd of flows. $70 has been a zone of safe support in crude which may also be enticing buyers. Global negotiations are underway between the US and Russia and Israel and Hamas who are slated to begin a second stage of ceasefire talks. Both could provide bearish sentiment if talks progress but the magnitude of that will be dependent on where markets go from here. A Goldman Sachs report suggests sanctions targeting Russian oil are less limiting than their OPEC+ quota. OPEC’s decision on whether or not to begin production increases in April could play a key role in shaping trade ranges through 2025.
Crude
- North Dakota’s oil production has fallen ~150,000 bpd due to extreme cold. (Reuters)
- Russia’s Novorossiisk port which is a key oil export hub has been shut in due to storms. (Reuters)
- President Trump said he may not allow Chevron’s Venezuelan oil exports to continue while talking to reporters in Florida. (BBG)
- Brazil, who is the seventh largest oil producer, is set to join OPEC+ after they received government approval yesterday. (Reuters)
- Kazakhstan is seeking discussions with Ukraine after a drone strike hit the CPC pipeline. (Reuters)
- Reuters estimates crude stocks rose 2.2 million barrels last week.
- The API will report its inventory survey today at 3:30 pm CT.
- The EIA will report inventories on Thursday at 11:00 pm CT.
- As of 8:36 am CST: Brent crude oil up $0.85 to $76.69, US dollar index up $0.098 to 107.152 while the nearby e-mini S&P 500 futures contract down 11.25 to 6135.00.
Diesel
- Reuters estimates diesel stocks fell 3.5 million barrels last week.
- BP’s Whiting, Indiana refinery saw decreased activity at its 102 kbpd coker the morning of February 16th. (BBG)
- Group 3 basis -1.00 to -18.00c.
- Chicago diesel basis +4.0 to -23.50c.
Gasoline
- Reuters estimates gasoline stocks rose 800,000 barrels last week.
- March-April spread trading around -22.50 today.
Propane
- Prompt Conway futures are indicated at .9150 while Belvieu is trading at .9050.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8250.
- June25 propane swap midpoint indication: 77.75
- Conway propane is trading at 54% to WTI.
Natural Gas
- Overnight weather runs added 5 HDDs through the two-week forecast.
- Natural gas is sharply higher again today due to oil and gas well freeze offs.
- Record LNG demand is creating a sensitive dynamic as supply gets knocked offline.
- Natural gas oil to gas ratio trades at around 17 to 1, lowest since December 2022. On an energy equivalent basis, oil should only trade six times over gas.
Continuous Daily WTI: WTI is testing resistance at its 50 DMA today. Look for a run to the 200 DMA if momentum persists this week.
