Morning Highlights
Morning Highlights

03-07-22 Energies Climb to highest prices since 2008


Michael Dix

Mar 7, 2022

 

Outlook: Energies are trading higher yet again this morning. This follows a gap up as news yesterday indicated that the US and other European countries were weighing energy sanctions including oil on Russia. OPEC+ continues to struggle to produce the goals it has set for itself as Libya is forced to shut down large amounts of production. Iran and the US continue to try and work out a deal, but there are still several obstacles to overcome at this point. The market continues to see large swings in price about any news that surfaces about Ukraine or possible sanctions being placed.  

 

Crude

  • The Iran Nuclear Deal is still close but has a few more hurdles according to US Secretary of State Blinken
  • WTI crude traded a new high at $130.50 while Brent reached a high of $139.13 All-time Highs are $147.27 for WTI and $147.50 for Brent
  • The US and some European allies are looking into banning Russian oil and oil products.
  • Germany said that it has no plans to halt Russian energy products from coming into the country
  • Boris Johnson spoke on energy as the UK looks to overcome its energy crunch. He said that the country is going to use more of its hydrocarbons and made it clear that they’re sticking to their plan to reduce the country’s CO2 output.
  • Shell is limiting diesel sales in Germany to reduce consumption and pressure on supply.
  • Libya production has yet again fallen below 1 million barrels per day as they declared force majeure on almost 400,000 barrels.
  • The US is sending fighter jets to Poland as Poland sends their fighter jets to Ukraine to be used by the Ukrainian Air Force.
  • As of 9:58 am CST: Brent crude oil is up $4.86 to $122.97, US dollar index up $0.420 to $99.071 while the nearby e-mini S&P 500 futures contract is down 72.50 to 4255.5.

Diesel

  • Diesel futures have touched decade-long highs in both the US and Europe.
  • Spec long futures are only at a ¼ of the all-time high.
  • With the supply of diesel still being the tightest in energy it is likely to continue higher.

Gasoline

  • Gasoline has yet to be deterred by extremely high retail prices across the US and in some areas, we are nearing record highs
  • Long positions in the market have not yet reached an excessive level.

Propane

  • Propane has moved another 1.5 cents this morning following crude and the other products higher.
  • Last week propane finished at its highest level since 2014.
  • There is bullish news within the market as exports continue to remain strong

Natural Gas

  • Weather forecasts are showing a decrease in demand as spring starts to come in. Especially in the 11-15 day outlook
  • The US East Coast has become an exporter to Canada recently as demand has dropped significantly due to warmer weather in the region

Daily Brent Crude: With yesterday’s gap the market has moved into eyesight of the all-time high back in 2008. The move higher has been significantly quicker than in 2008, but that is what we can expect as a war that involves the second-largest oil producer and global production lags behind global demand. This market will continue to see high amounts of volatility as the situation in Ukraine develops and OPEC+ gives updates in regard to their production.