Outlook: Energies are pressured this morning with WTI down more than a dollar and products down more than two cents. A Continued setback in equities brings concern about the economy and the U.S. dollar is higher. There’s also concerns that the recent rally has been stretched with 12 bullish bets for every bearish one, which is the largest ratio since November. We expect continued volatility this week as there are still many bullish factors looming in the market. The Russia/Ukraine situation, supply concerns and Federal Reserve actions remain points the market will key in on.
Crude
- China performed a fly-over in Taiwan over the weekend according to Taiwan’s Defense Military.
- Reuters reported the US ordered family members of its embassy staff in Ukraine to leave the country due to escalating military action by Russia.
- New York Times reported Biden said he may deploy up to 5,000 troops to Ukraine as the country prepares for Russia.
- The UAE blocked two ballistic missiles believed to be sent by the Yemen’s Iranian-backed group, Houthis according to Bloomberg.
- Saudi Aramco said demand for oil is nearing pre-Covid levels and reiterated that producers globally are investing too little in supply.
- Saudi Aramco plans to raise its daily crude-production capacity to 13 million barrels from 12 million by 2027.
- Libya’s Es Sider crude exports rise to a 3 year high at 307,000 bpd in February according to preliminary loading program seen by Bloomberg.
- The CFTC reports money managers are holding 12x more bullish bets for every bearish position.
- Low petroleum inventories decrease the amount of selling hedge positions for producers.
- As of 9:00 am CST: Brent crude oil down $1.40 to $86.50, US dollar index up $.431 to 96.068 while the nearby e-mini S&P 500 futures contract is down 88 points to 4300.5.
Diesel
- The UK is ending Covid testing for vaccinated travelers.
- BNEF reported global jet fuel demand from commercial flights fell by 102,400 bpd (2.3%) ending a seven week stretch of increases.
- Nearby RBOB is down more than 3 cents as equities are under intense pressure.
- Apple’s global driving activity index dropped 1% last week.
Propane
- Conway is down 2 cents to $1.16, Belvieu down 2.5 cents to $1.1550.
Natural Gas
- Baker Hughes reported an increase of 4 natural gas rigs last week.
- US demand fell over the weekend to 131 Bcf/d.
Oil Demand: As we continue to move further away from Covid, demand remains on a steady growth track. Saudi Aramco continues to express concern over lack of investments in oil production globally.
