Outlook: Energies are looking for direction to start the day after coming down from their highs in the overnight. There is very little fresh news in the headlines for the market to digest. The talks between Russia and Ukraine have accomplished nothing following multiple reports that progress was being made earlier in the week. The Iran nuclear deal which stalled last week has not made an appearance this week with no date set for meetings to resume. As time goes on, it will become clearer how much supply disruption is occurring due to sanctions against Russia. There is no clear path as to where those barrels will be replaced, and an extremely tight and volatile market will likely continue.
Crude
- WTI crude has swung more than $16 a barrel this week.
- Crude is heading for its first back-to-back weekly decline since December.
- Talks between Russia and Ukraine have stalled with no new progress.
- President Biden will meet with President Xi of China to discuss their influence with Russia.
- China’s private oil refiners cut run rates to 50.56% down ~5% from last week. This is their lowest level in 5 years aside from 2020.
- The IEA reported that OPEC+ is producing 1.1 million fewer barrels than its target.
- Baker Hughes will report their rig count at 12:00 CST.
- As of 9:28 am CST: Brent crude oil up $0.40 to $107.04, US dollar index down $0.402 to 98.378 while the nearby e-mini S&P 500 futures contract is up 3.75 to 4406.75.
Diesel
- Chinese diesel exports dropped 89% in the first two months of the year.
- AAA reports an average diesel price of $5.066, down ~7 cents from last week’s high.
Gasoline
- Chinese gas exports fell by 54.5% on a year-over-year basis in January and 37% in February.
- AAA reports an average gas price of $4.274, down ~6 cents from last week’s high.
Propane
- Conway is trading at $1.3250 and Belvieu is at $1.3350.
- Propane stocks sit 11.5 million barrels below the 5-year average.
Natural Gas
- Overnight weather runs removed 4 HDDs through the two-week forecast.
- Total US demand climbed by 0.4 Bcf/d yesterday.
- The EIA reported a natural gas draw of 79 Bcf.
Oil Volatility: Volatility across commodities as a whole continues however energy has been a leader in price swings. WTI trading in a $16 a barrel range this week while Brent crude has moved by more than $5 a barrel in each of the last 16 sessions.
