Outlook: Energies are climbing to start the day and look to post their 6th consecutive week of gains. The Fed and its efforts to fight inflation haven’t been able to stop the momentum in energies with supply concerns and growing demand in focus. Russia has expressed it’s willing to engage with US security proposals and stated they do not want war however, the market does not seem to buy it. The market will look to OPEC+ next week at their planned meeting where they are expected to move forward with their 400,000 bpd production increase. A number that will draw attention will be their actual production for January compared to their target, as they only achieved 60% of their December target.
- Next week OPEC+ plans to meet and is expected to move forward with another 400,000 bpd production increase for March.
- OPEC+ produced 60% of their production target in December.
- Russian refiners had 222,000 bpd of capacity offline as of Wednesday, which is the lowest in two years according to Bloomberg.
- WTI prompt spread once again touched its strongest level since November at $1.48.
- WTI set a new contract high of $88.76.
- Baker Hughes will report their oil rig count mid-day.
- As of 10:00 am CST: Brent crude oil up $1.44 to $90.78, US dollar index down $.112 to 97.134 while the nearby e-mini S&P 500 futures contract is up 19 points points to 4336.
- US Environmental Protection Agency announced it finalized a rule extending the refinery compliance deadline for biofuel laws according to Reuters.
- June 22 ULSD is up ~3 cents at $2.5799
- Nymex gasoline cracks climbed to the highest in three months at $19.882/bbl.
- Propane continues to climb with colder weather extending into February and winter storms affecting parts of the US.
- Conway is up 3.75 cents to $1.25 and Belvieu is up 4.5 cents to $1.26.
- Natural gas is up over 10% as a winter storm threatens the Northeast.
- Overnight weather runs added 18 HDDs to the two-week forecast.
- The EIA reported a draw of 219 Bcf last week which posted the largest draw of the winter so far.
WTI Weekly Change: Oil continues to accelerate due to the imbalance of growing demand and short supply. Bearish headlines have not been able to reverse weekly market direction in over six weeks. If gains extend into next week, WTI will look to surpass $90.