Outlook: An explosion outside the airport in Kabul is said to have wounded several US military personnel and a second blast has been reported. This has investors seeking safe haven shelter and the US dollar is higher, helping to pressure energies. Broader geopolitical risk has been generally lacking in energies but I believe the strength from Monday to Wednesday was in part due to some being added.
Crude
- Tropical Depression Nine is heading into the Gulf of Mexico and will be moving through oil and gas production areas as it is scheduled to move ashore in Louisiana Sunday evening.
- Federal Reserve governor Kaplan said the Fed should announce a taper plan at the September FOMC and does not see the coronavirus resurgence derailing economic recovery. Chairman Powell speaks tomorrow where the market hopes to get more definition.
- Amid deeper ties in energy through OPEC+, Saudi Arabia and Russia signed a military cooperation agreement. Saudi’s Defense Minister said the agreement is “aimed at developing joint military cooperation between the two countries.” There were no immediate details on what the agreement entails. Russia is the world's second largest weapons exporter after the United States.
- Russia’s President Putin ordered the defense ministry to start evacuations of its citizens from Kabul amid increased security concern.
- Iran is expected to sell oil to the Taliban in Afghanistan and other goods in exchange for US dollars.
- “One of our plans is to strengthen Iran’s position in OPEC and take back our markets,” Iran’s oil minister Javad Owji said on his first day on the job.
- The Minnesota Supreme Court refused to hear a case seeking to overturn approvals for the Line 3 project. The Line 3 project updates the 1,097 mile pipeline which runs from Edmonton, Alberta to Superior, Wisconsin and more than doubles capacity to 760,000 bpd. The line is expected to be back in service September 15.
Diesel
- After a strong recovery so far this week, ULSD is taking a 2.6 cent step lower so far today amid a setback in crude, weaker equities and a stronger dollar.
Gasoline
- After a sharp move higher for the first three days of the week, RBOB is down near 4.5 cents this morning. Concern about low inventories on the East Coast as we move to change RVP specs on gasoline can cause volatility in the coming days for the soon-to-expire September RBOB futures contract.
Propane
- So far in 2021 US propane exports have averaged 1.2 million bpd. In 2020 exports to this point in the year averaged 1.1 million bpd and the five-year average through this time of year is 912,000 bpd.
- Today propane in Conway is down 1.25 cents and Mont Belvieu propane is 0.25 cents lower.
Natural Gas
- Futures are surging with nearby natural gas up 23.1 cents to 4.128 after the EIA reported a 29 bcf weekly increase in the US, well below 39 bcf anticipated. Similar to propane, natural gas stockpiles is well below its 5-year average level for this time of year.
