Written on: November 1, 2023

Energy Price Report November 2023

Wednesday, November 1, 2023

The energy complex is seeing gains of over 1.5% as of this writing despite losses in US stock market index futures and continued strength in the US dollar. Market traders are looking ahead to US manufacturing and construction spending data, the ADP Employment Report, the Job Openings and Labor Turnover Survey and to the weekly petroleum stock report from the Energy Information Administration (EIA) for further direction.

Crude Stockpiles

The API reported a 1.30mb build in US crude oil stockpiles for the week, slightly above forecasts at 0.88mb (average of polls by Reuters and the Wall Street Journal). Data for distillates were supportive as the agency reported a larger than expected draw of 2.50mb (vs 1.72mb) and inventory figures were neutral for gasoline as the API reported a draw of 0.36mb, in line with the 0.65mb expectation. An OPIS poll calls for a 0.5mb draw from propane and propylene inventories in today’s EIA report.

Overseas Markets

The Caixin China Manufacturing PMI fell from 50.6 to 49.5 last month, missing the 50.8 forecast and falling back into contractionary territory. Nevertheless, the Shanghai Composite edged up 0.14% and the Nikkei jumped 2.41% higher, while the Hang Seng fell 0.06%. In India, the S&P Global/Nikkei Manufacturing PMI for last month came in at 55.5, down from 57.5 in September. In European news, the final UK CIPS/S&P Global Manufacturing PMI for last month came in at 44.8, below expectations at 45.2. The UK Nationwide House Price Index for October rose by 0.9%, whereas forecasts called for a 0.4% decline. As of this writing, European stock markets were trading mixed around the unchanged mark.

Energy Futures

Petroleum futures closed mixed yesterday with mostly higher trade in global equities likely supporting, while a rally in the US dollar index was an unsupportive factor. Brent crude edged down 4 cents to close at $87.41 a barrel, WTI crude settled $1.29 weaker at $81.02 a barrel.  Refined product settled flat to higher as gasoline edged up 27 points to settle at $2.2227 per gallon and heating oil rose 2.47 cents to $2.9910 per gallon.  Propane prices increased by 31 points to 65.75c/g (34.2% of crude) and natural gas futures jumped 22.3 cents higher to settle at $3.575 per MMBTU.

Weather Outlook

The latest 1-5 day forecast based on the European model remains supportive as below-normal temperatures are expected across the eastern half of the country. The 6-10 day outlook remains supportive for the Northeast, but the Midwest is expected to see mostly above-normal temperatures.