Outlook: Energies are higher this morning following yesterday’s big comeback to settle well above the 200-day moving average. Economic concerns have gripped the market over the last three weeks and crude is expecting another weekly loss as a result. The Fed announcement will be a big news story in the coming weeks as rumors will move the market if further aggressive interest rate hikes are implemented to tame inflation. President Biden is in Saudi Arabia and is not expected to leave with a commitment to further production. Meanwhile, Great Britain is in need of a new Prime Minister who will inherit a massive uphill challenge in the European energy crisis that looms large ahead of the coming winter.
Crude
- President Biden is in Saudi Arabia and is asking for more production. However, there is no expectation of results from the meeting.
- WTI crude is set to finish with another weekly loss as economic concerns weigh heavy on the market.
- Libya’s new oil chief says that production will return to normal next week. This is on the heels of what has been a challenging year for the oil-producing country with political protests shutting down oil fields.
- As of July 14th, there was a total of 908,000 barrels worth of outages in oil production. The US accounted for 245,000 barrels of outages.
- Baker Hughes Rig Count will be announced today at Noon CT.
- August WTI Options expire today.
- As of 8:55 am CST: Brent crude oil up $2.94 to $102.09, US dollar index down $0.486 to 108.065 while the nearby e-mini S&P 500 futures contract is up 62to 3855.00.
Diesel
- Implied demand is currently at its lowest level since July 2021.
- Meanwhile stocks have reached a 14-week high after this week’s build.
Gasoline
- Decreasing demand has experts wondering if there is just a hangover from the fourth of July or if consumers are cutting back due to high prices.
- Chinese refinery activity increased this week on renewed demand in Asia.
- European stocks are slightly improving and reducing demand.
Propane
- 1.1200 Conway and Belvieu at 1.1375
- The market has moved lower following the rest of the energy complex.
- Currently 64% of production is being exported.
Natural Gas
- Uniper, the German Utility Company started using its winter stores of Natural Gas as Russia cuts off supply.
- The market is still seeing a 12% deficit in inventories which will only continue to worsen when the Freeport facility comes back up later this year.
US Crude Exports: With the energy crisis in Europe American exports have been seeing more destinations across the Atlantic as opposed to the Pacific. With the conflict in Ukraine dragging on and tensions between Russia and Europe still at the forefront of the news we could continue to see exports increase to Europe.
