Outlook: Energies are moving higher today as they look to cap off a historic week. We said last week that if Russia invaded or an Iran deal was struck, the market could surge in either direction and it finally came to fruition. Oil and products look to post nearly 20% weekly gains across the board as concerns over supply disruption rippled through the already fragile market. Volatility in the market is expected to continue with Russia advancing through Ukraine. Outside nations are scrambling to find barrels to replace any disruption to Russia’s 5-million-barrel export market but there is no easy fix. The Iran nuclear deal could provide a quick boost to supplies however progress appears to be at a standstill. Saudi Arabia and the UAE have said they will not use their spare capacity to boost production and will continue to comply with OPEC regulations. The global SPR release will provide 2 million bpd for 30 days in an attempt to cool down the market.
Crude
- WTI traded in a 22 dollar range this week between $94.46 and $116.57.
- Brent Crude traded in a $21.54 range which was the widest range since it began trading in 1988.
- A fire was reported at a Ukrainian nuclear power plant after it was seized by Russian forces but has since been extinguished.
- The Russian Ural is being traded at a ~22-dollar discount to Brent crude.
- The IAEA director-general Rafael Mariano Grossi is set to meet with world leaders in Tehran and has said it could pave the way for the revival of the Iran nuclear deal.
- Non-farm payroll rose 678,000 beating the consensus 400,000.
- Baker Hughes will report their rig count at 12:00 CST.
- As of 9:20 am CST: Brent crude oil up $4.95 to $115.44, US dollar index up $0.954 to 98.740 while the nearby e-mini S&P 500 futures contract is down 65.25 to 4294.25.
Diesel
- Diesel futures have risen around 23% week-over-week.
- The Biden Administration is analyzing whether to waive biofuel blending to provide relief to corn and soy.
Gasoline
- RBOB futures have risen around 17% week-over-week.
Propane
- Conway is trading at $1.5150 and Belvieu is trading at $1.5650.
- Propane has increased ~14 cents since Monday.
Natural Gas
- The EIA reports a draw of 139 Bcf.
- Overnight weather runs added 6 HDDs through the two-week forecast.
- Total US demand increased by 8.6 Bcf/d yesterday.
Brent Weekly Range: Brent crude saw its widest swing since it began trading in 1988 this week as it edges the 2008 financial crisis. Brent crude currently trades at $114.10 and a $5.80 premium to WTI for May. JP Morgan stated Brent could reach $185 by year-end if disruption persists.
