Morning Highlights
Morning Highlights

4-18-22 Energies Trade Higher to Start the Week


Michael Dix

Apr 18, 2022

 

Outlook: Energies have moved higher this morning as WTI crude is trading above $108. The war in Ukraine continues to drag on with no news to suggest that the two sides are any closer to a peace agreement. A Ukrainian diplomat said that he expects the war to continue for weeks. Natural gas has continued its move higher and is now trading near $8 for the may contract while the January 23 contract moved above $8. All of the bullish news is being tempered by the Covid outbreak in China that saw consumer spending dip to the country’s lowest level since 2020.

 

Crude

  • Vladimir Putin said that Russian OPEC relations are great as the country works to help the organization stabilize the global oil market.
  • Libyan oil fields are shutting down due to protesters restricting the flow of supply.
  • China reported its largest reduction in demand and consumer spending since April 2020.
  • Russia’s deputy prime minister said that if more countries shun Russian oil, prices may significantly exceed record levels.
  • Last week’s Baker Hughes rig count saw an increase of 5 rigs to 546.
  • As of 9:27 am CST: Brent crude oil is up 1.20 to $112.93, the US dollar index is up $.295 to 100.612 while the nearby e-mini S&P 500 futures contract is up 13 to 4399.00

Diesel

  • Anticipated summer air travel is providing a bump as air traffic moves closer and closer to pre-pandemic levels.
  • Net longs are at their lowest level since October 2020

Gasoline

  • National average price per gallon at the pump is $4.09
  • RBOB broke from a psychological barrier at $3.40
  • Last week’s 2.5% drop in refinery utilization and drop in inventories is providing support to the market.

Propane

  • Propane has seen three weekly builds in inventories and is below the five-year average, but just above the five-year low
  • Belvieu has widened its premium to Conway beyond 5 cents

Natural Gas

  • The market continues to break higher with few resistance lines ahead.
  • Russia continues to insist that it be paid in Rubles for gas
  • US Inventories are 17.8% below the five-year average.
  • Asian coal prices are rising as the world moves away from Russian coal

Libyan Oilfields:  A continued issue in the past year has been oil field shutdowns in Libya. Protesters keep slowing flows from fields to loading stations along the coasts. The most recent shutdown is near the El Feel oil field.