Morning Highlights
Morning Highlights

Energies Higher to Start the Week


Michael Dix

Mar 21, 2022

 

 

Outlook: The energy complex is trading higher this morning on the news of the EU possibly banning Russian oil imports. There have been little to no new updates on potential peace between Russia and Ukraine as the conflict continues to near the 1-month mark. Volatility remains in the market and the price is likely to continue its large swings with any potential news related to the conflict abroad.

Crude

  • The European Union is weighing an embargo on Russian crude oil imports and will discuss it later this week.
  • India continues to buy Russian Ural barrels at a discount.
  • Equinor shut down a 35,000 bpd rig due to an earthquake in the North Sea
  • Saudi Arabia is asking for help to deter Houthis attacks on oil fields saying that the attacks could disrupt the global supply of oil
  • Little to no progress has been made in peace talks between Russia and Ukraine
  • The Biden Administration will brief large energy companies including Exxon Mobil and several large banks on the current energy crisis later today
  • Joe Biden will travel to Belgium later this week to meet with NATO leaders as a show of solidarity and strength
  • Lack of liquidity has played a significant role in the volatility as Friday volume was just under 490,000 contracts traded. That is the lowest since the Christmas holiday
  • As of 8:45 am CST: Brent crude oil up $5.83 to $113.72, US dollar index up $0.050 to 98.281 while the nearby e-mini S&P 500 futures contract is up 11.75 points to 444.64.

Diesel

  • Diesel stocks continue to hover around their lowest levels in 8 years
  • India is paying a 300% premium to secure distillates for their needs domestically

Gasoline

  • Average retail prices across the US have fallen 10 cents from their highs
  • Chinese traffic was reduced due to new Covid Strain

Propane

  • Propane is up 3.5 cents at Conway to 1.3700 and up 4.5 cents at Belvieu to 1.4000
  • Propane has been following crude the past few weeks but the degree that is has followed has lessened the last week.

Natural Gas

  • Natural gas is lower today on warmer forecasts for much of the continental US
  • The most recent EIA report showed inventories 17% below the five year average

World Mobility: As the world continues its recovery from the pandemic traffic continues to pick back up. Despite China shutting down several cities due to a new outbreak of Covid Asia increased mobility. Mobility levels have nearly recovered to pre-covid levels despite high prices.