Outlook: Energies are seeing losses across the board today as the market tries to find its bearings after yesterday’s volatility. While the Russian invasion continues, US sanctions excluded energy which helped bring markets down significantly from their highs. President Putin also said he is willing to send a delegation for peace talks which aided the downside movement. If sanctions continue to exclude energies, we may not see much of a supply disruption to the market and the reversal in prices yesterday showed that. The Iran nuclear deal has taken a backseat this week but will likely resurface next week following up on reports that the finish line was in sight. OPEC+ will meet on March 2nd and is expected to maintain its 400,000-bpd growth target.
Crude
- The US announced additional sanctions yesterday which did not involve oil or products.
- US administrative officials estimate Ukraine can hold off Russian forces for 96 hours.
- President Putin has expressed he is open to sending a delegation to Minsk for peace talks with Ukraine.
- OPEC+ is scheduled to meet next Wednesday and is expected to maintain its 400,000-barrel production increase.
- Some crude importers in China have temporarily paused the purchase of Russian seaborne crude due to the uncertainty of cargo financing according to Bloomberg.
- Processors in India bought around 6 million barrels of Urals crude from Russia, taking advantage of their discounted price according to Bloomberg.
- President Biden reiterated that they would release additional SPR barrels if necessary.
- The EIA reported a larger than expected build of 4.5 million barrels.
- Baker Hughes will report their rig count today at 12:00 EST.
- As of 9:58 am CST: Brent crude oil down $1.85 to $97.29, US dollar index down $0.420 to 96.713 while the nearby e-mini S&P 500 futures contract is up 55.5 to 4339.50.
Diesel
- The EIA reported a smaller than expected draw of 584,000 barrels for last week.
- Diesel demand increased by 78,400 barrels last week.
Gasoline
- The EIA reported a smaller than expected draw of 582,000 barrels for last week.
- Gasoline demand increased by 333,400 bpd last week.
Propane
- The EIA reported a draw of 3.9 million barrels for last week.
- Conway is down 4.5 cents at $1.39 and Belvieu is down 6 cents at $1.44.
Natural Gas
- The EIA reported a draw of 129 Bcf for last week.
- Overnight weather runs were unchanged for the two-week forecast.
- Total US demand increased by 4 Bcf/d yesterday.
US Strategic Petroleum Reserve: The US is willing to release additional SPR barrels if the Russia/Ukraine conflict impacts supply and prices. The recent pullback after sanctions excluded energy may deter them drawing from the already depleted emergency reserve.
