Morning Highlights
Morning Highlights

3-24-23 Energies slide amidst further macro pressure...

Riley Schwieger

Mar 24, 2023

Outlook: The energy complex is under pressure this morning with crude and products all trading lower. A continuation from yesterday's late developing bearish sentiment following Granholm’s SPR comments is coinciding with sharp selling in European banking shares renewing economic fears. Renewed banking industry fears have markets taking a risk-off approach ahead of the weekend to avoid being caught in another closure event. One of the lurking bullish drivers helping support the market was the US saying they’d be buyers when crude fell to values near $70 to refill the SPR. This idea was punted yesterday following comments stating refills could take years. Market volatility and further downside risk have likely caused the US to shy away from announcing a purchase thus far. We expect the energy market to remain choppy as it navigates the instability in the banking sector. From a hedging perspective, layering in smaller chunks will allow you to acquire coverage while reducing exposure to any significant swings.


  • Yesterday, Energy Secretary Jennifer Granholm said refilling the SPR near $70 could be a challenge this year and may take multiple years.
  • The US will begin releasing again from the SPR starting in April as part of a previously mandated sale dating back to 2015. The release will total 26 million barrels.
  • Russia’s Prime Minister Alexander Novak clarified that the 500,000 bpd oil production cut would be from 10.2 mbpd and not 9.8 mbpd as seen in January.
  • Goldman Sachs reaffirmed its bullish commodity view yesterday stating that US banking failures will negatively impact supply more than it will demand.
  • European banking shares are falling sharply this morning with risk-off sentiment ahead of the weekend amidst economic tightening.
  • A higher US dollar could be putting further pressure on energies today.
  • As of 8:23 am CST: Brent crude oil down $2.05 to $73.86, US dollar index up $0.655 to 103.187 while the nearby e-mini S&P 500 futures contract is down 25.25 to 3952.00.


  • Gasoil stocks at Europe’s ARA Hub fell by 2.4 million tons from the week prior.
  • Singapore middle distillate stocks rose by 175,000 barrels through March 22nd, according to Enterprise Singapore
  • AAA reports the national average retail diesel price at $4.26.


  • Gasoline stocks at Europe’s ARA hub rose 1.4 million tons from the week prior.
  • Singapore light distillate stocks rose 219,000 barrels to a 3-week high, through March 22, according to Enterprise Singapore.
  • AAA reports the national average retail gas price at $3.441.


  • Conway is trading at .7200 while Belvieu is trading at .7550.
  • Conway is trading at 42% of crude.
  • The US is exporting 75% of production as of 3/17/23.

Natural Gas

  • Overnight weather runs added 5 HDDs in the two-week forecast.
  • Yesterday, US natural gas demand fell to 103.9 Bcf/d.
  • The EIA announced a 72 Bcf draw for last week.
  • Storage levels are 36.1% above year-ago levels and 22.7% above the 5-year average.

Diesel Forward Curve: The diesel forward curve has changed drastically when compared to a year ago. Not only has the entire curve fallen sharply, but the inverse has softened dramatically. Despite an inventory deficit to the 5-year average, domestic demand has remained soft allowing the curve to flatten.