Outlook: Energies are higher this morning and received a bump higher after the US CPI number was released at 7:30 am cst. Despite very high prices the demand in the US is still strong and incentivizing drilling and refining. Europe was surprised today as Ukraine shut down on of the largest Natural Gas transit flows, cutting Europe by nearly ¼ of its supply. Chinese demand is starting to get some positive news as Covid case numbers were lower across the country and could signal a return from lockdowns is coming soon.
Crude
- Chinese Covid Cases are down, and demand could start to return to more normal levels soon.
- Hungary, which is opposed to an embargo on Russian oil, said that oil coming in pipelines should be exempt from the ban.
- The EU has drafted a plan that will wean itself off of Russian oil by 2027 and raise its 2030 clean energy target from 40% to 45%.
- The Libyan Prime Minister said that recently closed oilfields could reopen soon.
- A Russian tanker that loaded in the Baltic port of Primorsk was turned away from multiple European ports and is now headed toward Gibraltar.
- The US Consumer Price Index or CPI finished up .3% for April to reach 8.3%
- The API estimates that inventories rose 1.62 million barrels last week
- The EIA will release its weekly report at 9:30 am CST today
- As of 9:21 am CST: Brent crude oil is up $4.75 to $107.23, the US dollar index down $.373 to 103.559 while the nearby e-mini S&P 500 futures contract is up 24.00 to 4020.00.
Diesel
- The API is predicting a 662,000 barrel build this past week.
- European distillate imports are up and are an example of global tightness
- Refineries are running at capacity to meet demand from shipping routes and jet fuel.
Gasoline
- The API is predicting a build of 823,000 barrels last week.
- Despite record prices at the pump demand has remained strong and is still providing support to the market.
- China did secure supply shipments from Russian this week.
Propane
- The EIA report is expected to show a build of 1.87mbbls
- Propane is currently up 1.5 cents at $1.2550 in Conway
Natural Gas
- Natural Gas flows from Russia into Europe have slowed ¼ of capacity after Kyiv halted a major transit route. This is the first time that distribution has been disrupted since the war began
- May production is down from April production and May usage is up from the prior estimates in April
Crack Profitability: The 3-2-1 crack spread has jumped to record highs as the price of products continues to soar. The consumer’s ability and willingness to pay has resulted in record prices at the pump and record profits for the companies refining the products.
