Outlook: Energies are dealing with a lack of fresh developments today leaving crude and gasoline in idle while diesel holds a firmer tone higher. Natural gas has certainly been in the spotlight this week after a strong bullish run but is finding relief today. Just yesterday, natural gas production fell ~4% while demand rose 2.5%, contributing to a tighter fundamental outlook amid the cold snap. Warmer-than-average temperatures are forecasted for most of the country over the next week, however, another cold snap looms behind that. President Trump spoke on new tariffs yesterday but his comment shedding optimism toward a trade deal with China may have garnered the most attention. Energies don’t appear to be finding direction from either of the two subjects this morning. We’ll look to the EIA Weekly Storage Report later this morning for fresh insights.
Crude
- President Trump announced yesterday he will announce new tariffs over the next month or sooner, adding lumber, forest products, cars, semiconductors, and pharmaceuticals to the list. (Reuters)
- President Trump said yesterday that it’s possible the US will make a new trade agreement with China. (BBG)
- Russian monthly oil product exports fell by 8% m/m through the first half of February. (BBG)
- Today is LTD for March WTI Futures.
- Reuters estimates crude stocks rose 2.2 million barrels last week.
- The API survey showed crude stocks rose 3.3 million barrels last week.
- The EIA will report inventories on Thursday at 11:00 pm CT.
- As of 7:54 am CST: Brent crude oil up $0.39 to $76.69, US dollar index down $0.350 to 106.82 while the nearby e-mini S&P 500 futures contract down 18.25 to 6144.00.
Diesel
- Reuters estimates diesel stocks fell 3.5 million barrels last week.
- The API survey showed diesel stocks fell by 2.7 million barrels last week.
- The IEA estimates cold weather in the US boosted diesel demand by 100,000 bpd in December and January.
- Take note of another significant drop in group 3 diesel basis.
- Group 3 basis -11.00 to -29.00c.
- Chicago diesel basis +0.50 to -23.00c.
Gasoline
- Reuters estimates gasoline stocks rose 800,000 barrels last week.
- The API survey showed gasoline stocks rose by 2.8 million barrels last week.
- March-April spread trading around -23.50 today.
Propane
- Prompt Conway futures are indicated at .9175 while Belvieu is trading at .9000.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8325.
- Jun25 propane swap midpoint indication: 77.75
- Conway propane is trading at 54% to WTI.
- OPIS estimates propane stocks fell 3.2 million barrels last week.
Natural Gas
- Overnight weather runs removed 3 HDDs through the two-week forecast.
- Natural gas production in the lower 48 fell 4.9 Bcf/d to 99.4 Bcf/d yesterday while demand rose 4.2 Bcf/d to 169.2 Bcf/d.
- Record LNG demand is creating a sensitive dynamic as supply gets knocked offline.
- Reuters estimates nat gas stocks fell between 153 to 204 Bcf last week.
Continuous Weekly NG: With a fresh high today, natural gas futures are trading at their highest level since December 2022.
