Outlook: Energies are extending their run this morning as new contract highs have been established for oil and products. The Russia/Ukraine war continues to escalate with shellings targeting civilian areas. Ukraine’s ambassador reported to the US that Russia used a vacuum bomb, which is a bomb that uses surrounding air to generate a longer-lasting explosion than conventional explosives. These bombs are prohibited by the Geneva Convention. Sanctions continue to escalate, and while oil isn’t directly sanctioned, it is being indirectly affected. The Russian Ural is reportedly at an $11 discount to Brent crude due to payment disruption and port closures. The IEA is meeting this morning to discuss supply and a possible global SPR release in an attempt to relieve markets.
Crude
- WTI set a new contract high of $102.77 this morning.
- Ukraine’s ambassador reported that Russia used a vacuum bomb yesterday which is prohibited by the Geneva convention.
- Russia launched shelling’s in the civilian areas of Kyiv yesterday.
- The Kremlin released a statement regarding a meeting between Putin and UAE leader Prince Mohamed bin Zayed which stressed coordination in supporting the global energy market.
- The IEA is meeting and discussing a release of 60 million barrels from global SPR, which is equivalent to less than 6 days of Russian output according to Bloomberg.
- OPEC+ is expected to stick with their 400,000-bpd increase for April in their March 2nd meeting.
- The State of the Union address will be delivered at 8pm CST.
- Reuters is estimating a 2.8-million-barrel build in oil stocks.
- The API will report their inventory survey today at 3:30 CST.
- As of 9:08 am CST: Brent crude oil up $6.28 to $104.19, US dollar index up $0.420 to 97.126 while the nearby e-mini S&P 500 futures contract is down 22.25 to 4345.50.
Diesel
- Reuters is estimating a diesel draw of 1.8 million barrels for last week.
- Diesel set a new contract high of $3.1451.
Gasoline
- Reuters is estimating a gasoline draw of 1.5 million barrels for last week.
- Gas set a new contract high of $3.0995.
Propane
- Conway is trading is up 3.5 cents to $1.4100 and Belvieu is up 5 cents at $1.4400
- Propane continues to track crude oil with market fundamentals taking a backseat.
Natural Gas
- Reuters is estimating a natural gas draw between 91-153 Bcf
- Overnight weather runs removed 4 HDDs through the two-week forecast.
- Total US demand fell by 1.4 Bcf/d yesterday and represents the fourth consecutive day of losses.
Continuous Daily WTI: Crude has managed to break through $100 once again as the war escalates. We previously broke the 100-dollar resistance after news that the invasion began but the market quickly retreated. Today the market is establishing new contract highs and pushing well beyond its resistance.
