Outlook: Energies are mixed this morning with oil sliding lower while refined products hold marginal gains. The complex has struggled to find conviction this week despite a stream of headlines. Participants may be looking to trade the facts rather than the rumors amidst higher levels of uncertainty. On the biofuels front, the American Petroleum Institute trade group is pushing for nationwide policy on higher-ethanol blends of gasoline. This comes after the Trump Administration announced it will move ahead with year-round sales of E15 for eight Midwestern states. The API views a nationwide approach as a way to avoid “patchwork” by individual states to ensure consumers have access to the higher blends. The industry is still waiting for clarity on biodiesel and the credit programs but the initial approval for year-round E15 in the Midwest appears positive. If nothing else today, we’ll look to the API inventory stats this afternoon for further insight on last week’s fundamental changes.
Crude
- Iran said today they won’t have direct talks with the US on Nuclear and will instead coordinate with Russia and China.
- President Trump said yesterday that tariffs toward Canada and Mexico will move forward as planned next week. (Reuters)
- The US announced new sanctions targeting Iran’s shadow fleet yesterday. (Reuters)
- BP is expected to announce a significant strategy shift on Wednesday, which may include scrapping its ambition to reduce oil and gas output by 25% from 2019 levels. (BBG)
- Global crude in floating storage fell 12% last week to 65.65 million barrels. (BBG)
- Reuters estimates crude stocks rose 2.5 million barrels last week.
- The API survey will be reported at 3:30 pm CT.
- As of 8:46 am CST: Brent crude oil down $0.49 to $74.29, US dollar index down $0.220 to 106.377 while the nearby e-mini S&P 500 futures contract down 11.25 to 5990.00.
Diesel
- Reuters estimates diesel stocks fell 0.7 million barrels last week.
- The 50 DMA could provide support this week to the continuous chart near $2.4015.
- Group 3 basis +9.75 to -21.25c.
- Chicago diesel basis -0.00 to -23.00c.
Gasoline
- The American Petroleum Institute trade group is pressing for a nationwide policy on higher ethanol blends of gasoline and President Trump Admin said on Friday they would expand sales in certain Midwest states.
- Year-round sales of E15 for eight Midwest states was upheld on Friday. The policy will start on April 28th.
- Reuters estimates gasoline stocks fell 0.6 million barrels last week.
Propane
- Prompt Conway futures are indicated at .9175 while Belvieu is trading at .9025.
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8350.
- Jun25 propane swap midpoint indication: 78.50
- Conway propane is trading at 54% to WTI.
Natural Gas
- Overnight weather runs added 2 HDDs through the two-week forecast.
- US weighted HDDS rose by 25 last week and were 54 higher than the long-term average. (BBG)
- Reuters estimates nat gas stocks fell between 263 and 287 Bcf last week.
