Outlook: Energies are continuing lower this morning after drafting weakness from bearish economic views. Rate cut bets have begun to slide in favor of 2 cuts before the end of the year with the first cut projected in June. Tariffs will likely play a big role in how the Fed navigates throughout the year and the variability and uncertainty of longevity of these tariffs could continue to create volatility. In geopolitics, President Zelenskiy is expected to travel to the US to sign a resource deal as a step forward in a ceasefire agreement between Russia and Ukraine. It remains unclear whether or not US sanctions against Russian oil will be lifted as part of this agreement but it is worth noting that the EU sanctions have not been mentioned here. Several industry sources have said that US sanctions are less limiting than the current OPEC+ quotas that Russia remains compliant with and because of that fundamental impacts may be less significant. We’ll look to the EIA’s weekly storage report later this morning for further insights today.
Crude
- Ukrainian President Volodymyr Zelenskiy is expected to travel to Washington this week to sign an agreement to develop natural resources with the US as part of a deal to secure a ceasefire agreement between Russia and Ukraine. (BBG)
- US tariffs against Mexico and Canada are scheduled for March 4th.
- A low Consumer Confidence reading helped markets breakout lower yesterday.
- Continuous WTI closed below $70 yesterday for the first time since December.
- Reuters estimates crude stocks rose 2.6 million barrels last week.
- The API survey showed crude stocks rose 600,000 barrels last week.
- The EIA will report inventories today at 9:30 am CT.
- As of 8:49 am CST: Brent crude oil down $0.19 to $72.83, US dollar index down $0.209 to 106.517 while the nearby e-mini S&P 500 futures contract down 29.25 to 5999.00.
Diesel
- Reuters estimates diesel stocks fell 1.5 million barrels last week.
- The API survey showed diesel stocks fell 1.1 million barrels last week.
- Continuous HO closed below its 50 DMA yesterday. The 200 DMA could provide a next zone of support near $2.3385.
- Group 3 basis continues to lift this week trading +2.75 to -18.50c yesterday.
Gasoline
- Reuters estimates gasoline stocks fell 800,000 barrels last week.
- The API survey showed gasoline stocks rose 500,000 barrels last week.
Propane
- Prompt Conway futures are indicated at .9075 while Belvieu is trading at .9175. (CME, OPIS)
- Conway Swap Oct25-Mar26 strip indicative midpoint ~.8250.
- Jun25 propane swap midpoint indication: 77.75
- Conway propane is trading at 55% to WTI.
Natural Gas
- Overnight weather runs were unchanged through the two-week forecast.
- Dutch TTF is down nearly 4% this morning and is off 10% since Friday.
- Reuters estimates nat gas stocks fell between 263 and 287 Bcf last week.
- Today is LTD for March NG.
