Outlook: Energies are moving sharply higher today with ULSD and RBOB at all-time highs in the nearby contracts. The US is expected to announce a ban on Russian oil imports this morning, while some of its European allies still work towards a plan to follow suit. The US will look to replace the ~400,000 bpd it has recently been importing from Russia in order to gain control of surging prices. The US may look to Mexico and Canada for supply but there is also growing pressure to increase production domestically. The IEA has said they may push for another global SPR release if prices continue to climb. Reuters is calling for inventory draws across the board for last week and previous SPR releases domestically have provided little price relief.
Crude
- The Biden Administration is expected to ban Russian oil imports at 9:45 CST.
- The U.K. is expected to announce a plan today to reduce Russian oil and gas imports over time according to Politico’s London Playbook Editor Alex Wickham.
- Goldman Sachs raised its 2022 Brent spot price forecast to $135 from $98, and its 2023 outlook to $115 from $105.
- The IEA said they are willing to set another global SPR release if necessary.
- Shell said it will phase out all purchases of Russian oil and gas and do so as fast as possible. The process will take weeks and could result in lower output.
- BP will continue to buy Russian oil and gas under existing contracts, but won’t make any new deals.
- Reuters is calling for an 800,000 barrel draw in crude stocks.
- The API will report their inventory survey at 3:30 CST.
- As of 9:25 am CST: Brent crude oil up $8.49 to $131.72, US dollar index down $0.283 to 99.006 while the nearby e-mini S&P 500 futures contract is up 26.25 to 4171.50.
Diesel
- Reuters is estimating a 1.7 million barrel draw in diesel stocks.
- Declining inventories and growing demand have helped diesel outpace gasoline with a nearly 60 cent spread between the two products.
Gasoline
- AAA reports retail gas has hit all-time highs today at $4.173
- Reuters is estimating a 1.9 million barrel draw in gasoline stocks.
Propane
- Conway is up 2.5 cents at $1.6350 and Belvieu is up 1 cent at $1.6500.
- Last week posted the largest weekly gain in 10 years.
- Outside market influence continues to drive propane prices.
Natural Gas
- Overnight weather runs removed 26 HDDs through the two-week forecast.
- Total US demand increased by 6.0 Bcf/d yesterday to 102 Bcf/d.
Retail Gas Prices: Prices at the pump have officially hit all-time highs as prices continue to surge over geopolitical conflict and supply disruptions. Rising fuel prices contribute to higher inflation which can put pressure on consumer spending across all sectors.
