Outlook: Energies are starting the day lower today and will look to post their first weekly loss in 9 weeks. If you recall, last Friday we were in an almost identical situation before a threat of Russian invasion late in the session sent the market up nearly 5 dollars. This week it seems that the threats of invasion have lost influence and the speculation that an Iran nuclear deal is close to completion has taken control of the market. These two key market drivers continue to work against each other, and Crude has found comfort between $90-$95. If either of these events comes to fruition, we will likely see the market breakthrough this trade channel.
Crude
- OPEC+ is looking to integrate Iran into its oil supply-limiting accord if a deal is reached.
- Reuters reports that the new nuclear deal aims to waiver sanctions as opposed to completely lifting and would require a renewal process.
- Goldman Sachs research believes the return of Iranian oil would represent a $7/barrel downside to their $105/barrel 2023 projection.
- Shelling in eastern Ukraine continued for the second straight day.
- Western nations have warned Russian shelling could be used to fabricate a pretext for an invasion.
- Russian Foreign Minister Sergei Lavrov agreed to meet with US Secretary of State Anthony Blinken next week.
- Putin said during a briefing that Russia isn’t against talks with US on security issues but needs a comprehensive approach.
- Baker Hughes will report this rig count around noon.
- As of 9:21 am CST: Brent crude oil down $0.75 to $92.22, US dollar index up $.073 to 95.874 while the nearby e-mini S&P 500 futures contract is up 4.5 to 4379.50.
Diesel
- NY H ULSD is down around 20 cents on the week.
- Global tightness of diesel supplies should provide long-term support if geopolitical premium exits the market.
Gasoline
- Chicago gasoline basis fell 19.5 cents yesterday to -42.5 cents.
- NY RBOB is down over 10 cents on the week.
Propane
- Propane hubs are up over 6.5 cents since Tuesday’s settle.
- The 8–14 day temperature outlook shows below average temps for most of the US.
- Conway closed at $1.2750 and Belvieu closed at $1.3250.
Natural Gas
- The EIA reported a draw of 190 Bcf, just under the estimate of 197 Bcf.
- Overnight weather runs added 4 HDDs to the two-week forecast.
- Total US demand grew by 6.4 Bcf/d to 92.3 Bcf/d after two consecutive days of losses.
Weekly WTI: Oil will try and hold on to its first weekly loss in 9 weeks today. Bearish market drivers up until this week haven’t been able to hold their ground as geopolitical conflict held its bullish grip.
