Outlook: Energies have seen back and forth action this morning and are currently mixed with oil being higher and products being slightly lower. Overall recession fears and bullish fundamentals have the market wrestling to find its direction moving forward. Global shortages have driven prices higher and production has not increased to meet the growing demand as economies recover following the pandemic.
Crude
- The G-7 will meet this week to discuss the potential price Cap on Russian oil.
- Libya may suspend crude oil exports. The country has struggled to meet production quotas due to political protests. Libya is currently 520,000 bpd below its quota as more protests limit production.
- US and Iran are set to resume nuclear talks amid the oil shortage.
- Italy imported the most barrels of oil it has since 2019 with the largest supplier being Russia.
- Chinese inventories have seen a large drawdown recently as the country opens back up following its covid lockdowns.
- The EIA has not yet released its inventory report and is still being delayed by technical malfunctions. The Agency will release an update on the situation later today.
- As of 9:39 am CST: Brent crude oil up $0.75 to $113.87, US dollar index down $0.187 to 103.998 while the nearby e-mini S&P 500 futures contract is up 8 to 3910.00.
Diesel
- Despite the lack of EIA information traders are expecting a small build for the week ending June 24th
- Supply chain demand could still provide some consistent demand to the market as the world is very behind on shipping goods.
Gasoline
- UK prices hit new highs over the weekend before taking a small step down today. The average tank costs over $110.
- Refinery rates have remained well above seasonal averages since February. Eventually, these plants will need to shut down for maintenance and turnarounds.
Propane
- 1.1675 Conway and Belvieu at 1.1975 off ¾ of a cent
- The overseas market has been quiet of late and has resulted in lower global demand and has driven prices lower.
Natural Gas
- Several models showed a slight loss of 3 cdd’s
- US Production increased to over 96 BCF each of the last three days.
- Europe is still scrambling to find a new source of Natural Gas as Russia keeps flows to a minimum.
Russian Seaborn Oil Exports: Exports from Russia to Asia decrease this past month from 60% to 50%. IT has become relatively clear to the G-7 that the oil embargo is hurting the counties imposing it more than Russia, the country the embargo is on. If Russia continues to find easy places to send its oil that could spell worse news for the Western countries that have shunned the Ural.
