MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for December 29th:

Updated at 5:00 PM ET 

HEADLINES:

— EIA: Crude Stocks Up 400K Bbl on Week, Fuels Build

— Woodside Inks 9-Year LNG Deal with Turkey’s BOTAS

— ExxonMobil Reports Flaring at Beaumont, TX Refinery

— Dallas Fed: Texas Manufacturing Back in Negative Territory

— Analysis: Crude Weakness, Fuel Strength to Persist in 2026

NEWS:

EIA: Crude Stocks Up 400K Bbl on Week, Fuels Build

U.S. commercial crude oil inventories posted a modest increase last week, while gasoline and distillate fuel oil stocks continued to build, the Energy Information Administration (EIA) reported Monday (12/29) in data delayed by the Christmas holiday.

Commercial crude stocks rose by 400,000 bbl to 424.8 million bbl during the week ended December 19, following a 1.3 million barrel decrease the prior week, the EIA said in its Weekly Petroleum Status Report.

With the latest weekly increase, U.S. crude inventories stood 8 million bbl, or 1.9%, above levels from a year earlier, the report showed.

In line with the overall increase, stockpiles at Cushing, Oklahoma, the delivery point for NYMEX West Texas Intermediate futures, climbed by 700,000 bbl to 21.6 million bbl during the week. In the prior week, Cushing balances had declined by 700,000 bbl.

Distillate fuel oil inventories rose by 200,000 bbl to 118.7 million bbl, extending the build seen a week earlier. Distillate stocks stood 2.2 million bbl higher than the same period last year, supported by gains across ultra low sulfur and higher sulfur categories.

Total motor gasoline inventories increased by 2.9 million bbl to 228.5 million bbl during the reported week, adding to the prior week’s build of 4.8 million barrels. Blending components rose by 2.6 million bbl to 214 million bbl, accounting for most of the increase, while conventional gasoline stocks edged up by 300,000 bbl to 14.5 million bbl.

Refinery utilization averaged 94.6% of operable capacity, down slightly from 94.8% the prior week. Crude oil inputs to refineries averaged 16.78 million bpd, compared with 16.99 million bpd a week earlier.

Crude oil exports averaged 3.62 million bpd, down by about 1.05 million bpd from the previous week, while crude imports fell by 440,000 bpd to 6.09 million bpd.

Total products supplied over the last four weeks averaged 20.31 million bpd, up by 7.5% from the same period a year earlier. Gasoline demand averaged 8.9 million bpd, down by 0.7% from a year earlier, while distillate demand averaged 4.16 million bpd, up by 2.3% from the same period last year.

Woodside Inks 9-Year LNG Deal with Turkey’s BOTAS

Houston-based liquefied natural gas shipper Woodside Energy announced that it will deliver about 500,000 tonnes per annum (TPA) to Turkey’s crude oil and natural gas pipeline company BOTAS for a period of nine years beginning 2030.

The two companies finalized a binding sale and purchase agreement for the long-term LNG supply after a preliminary deal reached earlier this year on energy cooperation, Woodside said in a statement late  Sunday (12/29).

The primary supply source for the LNG cargos will be the $17.5 billion Woodside Louisiana liquefaction and export terminal currently under construction in Calcasieu Parish, near Lake Charles. Woodside reached a final investment decision on the initial 16.5-milllion TPA phase in April 2025.

ExxonMobil Reports Flaring at Beaumont, TX Refinery

ExxonMobil reported a one-hour emission event at its 630,000 bpd Beaumont, Texas, refinery due to a valve malfunction that resulted in flaring, according to a filed with Texas Commission on Environmental Quality.

The incident lasted from 3:57 a.m. to 5:15 a.m. on Sunday (12/28).

The chemical hydrocarbon dewpoint (CHD) 2 unit released 11 air contaminants, with sulfur dioxide being the most significant at 1,365.56 pounds. Other emissions included 28.12 pounds of nitrogen, 22.67 pounds of carbon monoxide, 14.83 pounds of hydrogen sulfide, and smaller amounts of various nitrogen compounds and hydrocarbons, the filing showed.

ExxonMobil stated that the process stream was routed to the flare system to minimize emissions while instrument technicians worked to repair the valve.

“No offsite impacts were reported. We expect to meet all contractual commitments,” ExxonMobil stated.

Dallas Fed: Texas Manufacturing Back in Negative Territory

Following November’s rebound, Texas factory activity was back in negative territory in December, plunging by 24 points to match a yearly low last seen in September, the Texas Manufacturing Outlook Survey published by the Dallas Federal Reserve Bank said Monday (12/29).

The survey’s production index, a key measure of state manufacturing conditions, stood at -3.2 for the current month, versus its prior monthly reading of 20.5.

Further details of the survey showed the capacity utilization index also declined by 24 points to -4.5, while the new orders index ticked down by 11 points to -6.4.

The sector employment index, an indicator of the Texan labor market, declined by 2.3 points to -1.1, indicating flat headcounts. The hours worked index dropped by 17 points to -7.5, suggesting shorter workweeks for December.

The general business activity index, meanwhile, fell to -10.9, its lowest level since August. While the index has frequently dipped into negative territory without a full economic recession, a sustained reading below -15 to -20 often aligns with broader downturns or industrial recessions.

The future production index indicated optimism for the months ahead, remaining at the November survey reading of 34.2. The future general business activity index also held steady at 10.8.

Industry representatives offered a variety of opinions, with some expressing frustration about the trend in recent months even as they remained hopeful about the future.

The trucking industry, an indicator of diesel demand, appeared to be in an especially dour period, with a growth forecast that remains very weak and unlikely to change until the third quarter of 2026, said a representative for the manufacture of transportation equipment.

“We are taking additional cost reductions with reduced work weeks and reductions and delays in merit increases and holding off filling open positions,” the representative added.

Analysis: Crude Weakness, Fuel Strength to Persist in 2026

Given the rapid rise in global supply and tepid demand developments, most observers expect the crude oil market to be oversupplied in 2026. At the same time, refiners are set to continue to profit from the margin boost from low input prices and tight fuel inventories keeping refined product prices elevated. While forecasters’ views on demand and supply growth rates differ, they fundamentally agree on a continuing divergence between crude oil and refined fuels prices.

Crude Oil Balance

The International Energy Agency forecasted a record high glut in the crude oil market in 2026. Rapid supply growth from the Petroleum Exporting Countries (OPEC) and non-OPEC producers alike is expected to clock in at 2.4 million bpd, while global oil demand is likely to rise by just 860,000 bpd, according to the agency, leading to a prognosticated oil-overhang of 3.84 million bpd.

The U.S. Energy Information Administration (EIA), meanwhile, expects demand and supply next year to grow in lockstep, at 1.23 and 1.26 million bpd, respectively. This implies a continuation of the trend observed during most of 2025, when global inventories expanded by at least 1.2 million bpd, and likely up to 2.2 million bpd on average.

OPEC, in contrast, is more optimistic about demand growth, pegging it at 1.38 million bpd next year. At the same time, the producer group sees much less supply from outside OPEC coming online in 2026, roughly 600,000 bpd. While these numbers do not suggest oversupply per se, they would require a drastic improvement in market conditions and few production hikes from the group, given the crude oil overhang last quarter that even OPEC acknowledged in its monthly oil market report for November.

Refined Products

Last month, refining margins soared to multi-year highs, driven by strength in middle distillates. Low inventories and a global refining rut and have throughout the second half of the year provided price support to the middle of the barrel, before a new sanctions’ announcement kick-started a rally in diesel futures, with NYMEX-traded ULSD futures peaking at a five-month high in mid-November.

While product prices have since eased, some underlying fundamentals supporting the divergence between crude and fuel prices are bound to remain. Global refining capacity additions are slowing down, and both the United States and Europe are set to lose refining capacity. EIA forecasts an average WTI spot price of $51.42 bbl next year, a more than 21% year-on-year decline. Wholesale product prices, in contrast, are expected to soften by 8% to 12%.

Refinery closures are also set to drive prices higher in certain regions. The U.S. West Coast will lose another important gasoline producer next year with the planned closure of Valero’s 145,000-bpd capacity plant in Benicia, just months after Phillips 66 shut its Wilmington refinery. Together, these two plants account for 11% of the region’s refining capacity. This is likely to drive gasoline prices on the West Coast higher, bucking the nationwide trend.

Forecast Uncertainties

Moving into 2026, supply risks remained abound in both directions. An end to the Russia-Ukraine war could free up vast amounts of sanctioned Russian barrels, and the cessation of attacks on refining infrastructure ease the tightness in the fuels market, particularly at the middle of the barrel. Failing a diplomatic resolution, the U.S. and the European Union could ramp up sanctions and Ukrainian attacks on refineries intensify. Meanwhile, mounting tensions between the United States and Venezuela carry the potential to jeopardize some 900,000 bpd of global supply.

OPEC’s next steps also carry bullish and bearish risks. The producer group this spring pivoted from a strategy defending price to one of clawing back lost market share from non-OPEC producers by rapidly ramping up production. While OPEC agreed to halt output hikes in the first quarter of 2026, the group’s low break-even prices compared to international competitors and ample spare production capacity still leave the door for rapid supply growth wide open.