Outlook: Energies are trading higher this morning with WTI crude up over a dollar and trading near $91. Products are following along as The IEA released their data for the month of January. The report was bullish as it highlighted the global supply concerns particularly OPEC+ inability to produce at their stated goals. The tight market has given a bump to energy at the end of a week that is on track to record its first weekly loss since December. Geo-political conflict still looms as President Biden told US citizens to leave Ukraine immediately.
- Russian envoy Mikhail Ulyanov tweeted that he and US negotiator Robert Malley made strong progress in the Iran Nuclear Deal negotiations.
- If Iran is allowed to sell non-sanctioned oil it could provide 1.3 million bpd to the market.
- IEA numbers were published for the month of January. Worldwide crude stocks are at a 7-year low.
- OPEC+ supply continues to lag behind their goals which in turn are providing more support to the market. Since the beginning of 2021 OPEC+ has fallen short of their production goals by 1 billion barrels.
- OPEC fell short of their production in January by an average of 900,000 bpd which follows a December where they fell short by 790,000 bpd this brings their compliance rate to 126%.
- Shell had a fire at their Pernis refinery, which is the largest refinery in Europe.
- Baker Hughes will report their rig count at noon cst.
- As of 9:54 am CST: Brent crude oil up $1.52 to $92.93, US dollar index up $.210 to 95.765 while the nearby e-mini S&P 500 futures contract is down .5 to 4497.00.
- Regional trucker protests continue over surging diesel prices which could result in price-sensitive demand losses.
- European jet fuel saw declines this week adding to the resistance.
- Gas gained an edge in crack margins this week over diesel.
- Gas will look to test the $2.70 mark today following yesterday’s high of $2.7069
- Conway and Belvieu are unchanged at $1.21 and $1.24 respectively.
- The latest DTN Frontier weather forecast shows February HDDs at 92.9% versus the 30-year average.
- The EIA reported a draw of 222 Bcf/d.
- Total US demand fell by 1.3 Bcf/d yesterday to 111.6 Bcf/d
- This week’s overnight weather runs were unchanged.
Big Oil: Major oil producers continue to see record cash flow with the rally in energy. Cost-cutting measures taken during the pandemic have allowed for top companies to see cashflows that match 2008 levels despite oil trading under $100. Combined they lost nearly 19 billion in 2020 and have managed to recover to 31 billion this quarter and a 9 year high.