Outlook: Energies are rebounding this morning following another day of lower trade. The crude market is poised for a second weekly loss when the market closes today. The fear of a recession has pushed prices down despite relatively strong underlying demand and a very tight supply. Global supply is still one of the most concerning points as global stocks are well below five-year averages and supply is still not picked up to meet the pace at which those inventories are falling.
Crude
- This week’s EIA inventory report will be delayed until next week due to a technical difficulty.
- Above average temps in China have pushed power demand to record levels as the country looks to bounce back from its most recent round of lockdowns.
- Russia once again increases its exports of Urals to Asia. They are currently exporting nearly double the Urals through the Black Sea than they were before the Ukrainian invasion.
- Energy Secretary Granholm met with oil execs to discuss a number of possible solutions to the energy crisis. The meeting yielded no results despite a much more positive tone from both sides.
- WTI Crude is set to have a second consecutive weekly loss as overall economic concerns weigh heavily on the market.
- President Biden is set to travel to the Middle East to meet with leaders to find a way to increase the supply of oil.
- As of 9:24 am CST: Brent crude oil up $2.44 to $112.49, US dollar index down $0.398 to 104.038 while the nearby e-mini S&P 500 futures contract is up 87.75 to 3887.00.
Diesel
- Demand for diesel could remain strong despite a poor economy due to the supply chain demand should remain strong.
- API and ARA (Amsterdam-Rotterdam-Antwerp) showed stocks increasing. European stocks were lower this week.
- A key Russian diesel refinery caught fire this week cutting production off.
Gasoline
- The ARA inventory report showed a 7% increase in supply.
- Demand destruction fears have moved the market lower, and the market is looking very closely at US demand through the summer.
Propane
- Propane exports were 59% of production for the prior week.
- Conway is at $1.1875 Belvieu is at $1.2200
Natural Gas
- European gas continues to rally and is poised for a second weekly gain while US prices are set for another weekly loss.
- Qatar will require a long-term deal if Europe wants even more natural gas.
- Egypt and Israel are working together to ship more Natural Gas into Europe.
- Nordstream is currently at 40% capacity and is scheduled for a complete shutdown for maintenance from July 11th through July 21st.
UK Gas Prices: The US gas prices have eased on average about ten cents in the last week. The rest of the world however has yet to see that easing up. The UK has seen a steady increase in the price at the pump over the last two weeks.
