Morning Highlights
Morning Highlights

2-27-23 Energies look for direction, Russia halts supply to Poland...

Riley Schwieger

Feb 27, 2023

Outlook: Energies are mixed to start the week with WTI trading lower while products hold marginal gains. Russia continues to shift oil flows to manage sanctions and countries supporting Ukraine. Poland provided tanks to Ukraine over the weekend and Russia shut off oil flows the following day stating paperwork issues for the cause. Saudi Arabia also signed financial support to Ukraine over the weekend, despite Russia being an OPEC+ member. The overall market trend for the week may not be established until the back half of the week when a slew of economic reports is released. Further signs of an expanding economy will raise the prospect of additional interest rate hikes, which could be detrimental to demand. China will also report its manufacturing PMI Tuesday night, with the anticipation of a recovering economy bringing in extra attention.


  • Russia halted oil flows through the Druzhba pipeline to Poland yesterday.
  • Russia said today they would ship oil from Kazakhstan to Germany while maintaining halted flows to Poland.
  • Saudi Arabia signed an agreement to supply $400 million to Ukraine.
  • Former US Treasury Secretary Lawrence Summers said the current price caps imposed on Russia should be tightened further.
  • Vitol forecast crude prices to hit $90-100 during the second half of this year.
  • China will report its January Manufacturing PMI on Tuesday night, which will provide further insight into their economy's health and the prospect for demand recovery.
  • Baker Hughes reported oil rigs fell by 7 last week to 600.
  • The US dollar index rose to its highest level since January 6th today.
  • As of 8:26 am CST: Brent crude oil down $0.31 to $82.85, US dollar index down $0.328 to 104.886 while the nearby e-mini S&P 500 futures contract is up 34.25 to 4010.00.


  • Tuesday is the last trade day for March diesel.
  • The prompt diesel spread is trading around 2.5 cents this morning for those considering hedge rolls.


  • Tuesday is the last trade day for March RBOB.
  • The prompt RBOB spread is trading around 6.5 cents this morning.


  • Conway is trading at .7900 while Belvieu is trading at .8300.
  • Conway is trading at 43% of crude.
  • The US is exporting 69% of production as of 2/17/23.

Natural Gas

  • US Natural gas demand fell to 109.9 Bcf over the weekend.
  • Overnight weather runs added 8 HDDs through the two-week forecast.
  • Baker Hughes reported natural gas rigs were unchanged last week.

Prompt Diesel Spread: The front-month diesel spread has remained soft with inventories continuing to build. The inverse in the diesel curve is at its widest between the April and the May contract near 5.5 cents. Refinery maintenance could put upward pressure on the curve expanding the inverse if inventories start to decline with seasonal trends.