Outlook: Energies are lower amid a stronger dollar and weaker equities. WTI is off over a dollar as the effects of the omicron variant continues to weigh on demand sentiment in the U.S. and globally. some companies have moved to pull back on return-to-work, but a lack of severity to the new variant may limit broader restrictions. Trading volume has backed off as we approach the holidays and for now a choppy rangebound trading atmosphere may continue.
Crude
- OPEC+ have said they could meet ahead of their Jan 4 scheduled meeting if changes in demand require review of their 400,000 bpd supply increase planned for January.
- The seventh round of talks to revive the 2015 Iran nuclear deal has concluded with Iran stating good progress has been made. The Russian Envoy says additional talks with resume soon.
- China has increased oil purchases from Iran by 600,000 bpd from October levels.
- The daily number of covid cases hit record highs in the UK while hospitalizations have began to increase across the U.S.
- Denmark, South Africa, and Britain have seen new Omicron cases double every two days.
- There are signs demand in Asia is falling and supports the IEA’s view that supplies are moving into a surplus do to decreased travel.
- There are 102 supertankers bound for China in the next three months, down by one from last week. U.S. tankers remain steady at 31, Japan up 5 to 35, India up 3 to 20, and Saudi Arabia dropped by 4 to 17.
- The Bank of England unexpectedly raised interest rates for the first time in three years due to inflation and tight labor markets.
- Goldman Sachs believes $100 oil is still a possibility as concern about the omicron variant is overdone.
- World demand for coal for power generation hit a new high this year amid increased use in China, India and the U.S.
- Its said Exxon Mobil is prepared to bid on new blocks of oil and gas fields in Brazil’s deep water fields.
- As of 10:21 am CST: Brent crude oil down $1.39 to $73.63, US dollar index up 0.0355 96.397 while the active March e-mini S&P 500 futures contract is down 6.00 points to 4,653.00.
Diesel
- Nearby HO is down nearly four cents amid a setback in equities and a stronger dollar.
- Goldman Sachs anticipates global oil demand will hit records in 2022 and 2023 amid rising demand for aviation and transport in addition to infrastructure construction.
Gasoline
- after testing its 200-day moving average yesterday at 2.1870, RBOB is reeling lower with current trade down 4.68 cents to $2.1310.
Propane
- Propane values in Conway and Mont Belvieu are tracking lower in early Friday trade.
Natural Gas
- Henry Hub natural gas futures are trading back to near unchanged at 3.756 after earlier pushing to a fresh low for its recent move at 3.617.
- Russia’s Yamal-Europe pipeline has booked new supply, helping to push European gas prices lower today.
- Motor Oil in Greece, and similar companies that have the ability, are beginning to switch from natural gas to alternative energy such as naptha and propane sources due to surging prices.
