Energy Market Updates

Lots of interconnected events in Energy News this past week or so – we’ll run through and touch on some of the major items and attempt to keep it (relatively) brief.

Oil prices reversed their 7 day losing streak this morning. Last week WTI shed 9% to hit multi-month lows, and this morning it rebounded up to 5% on intraday trading.

Refined products are up huge with both products flirting with double digit increases. At time of writing (1:30pm), refined products were up substantially, with ULSD up $.0997 Sept, $.1001 OCT and Gasoline up $.0937 SEPT, $.0926 OCT. Additionally, WTI is up over the $65/bbl benchmark at $65.68 (+3.54).

Ramped up COVID cases and a stronger dollar pushed oil prices down today - intraday prices had Crude down to 3 month lows (off 4%) . Refined products tanked as well, lunchtime saw ULSD off almost 7 cents (.0674) and RBOB off .0868 on front month trading. 

Weak economic data from the United States & China, combined with higher OPEC outputs and rising COVID cases have again raised concerns about oversupply and weakening demand and pushed markets into sell off territory.

EIA Inventory report showed much larger draws across the board on all products than anticipated. By the official count, Crude drew down 4.1mmb (2.9 expected), distillates 3.1mmb (435K expected) and gasoline 2.25mmb (916K expected). 

By noon trading today Crude was up almost 5%, and on the refined products side, ULSD was up 7 cents and Gas up almost 6 (+.0586) and the market looked like we could see the highest close since mid-March. 

Last month, the OPEC+ decision to stay the course on previously announced production cuts pushed the market up. Yesterday, the OPEC+ decision to reverse course and bring more supply online over the next 3 months (May, June, July) resulted in....surprise! The market going up! 

WTI jumped over 5% late this morning, as news broke that OPEC+ members would be agreeing not to raise production levels in April. According to reports, the current established levels for each of the member countries will be continuing as is through April and May, and the Saudi's are planning to forge ahead with continuing to keep the additional 1 million barrels per day offline as agreed to for February and March.

Despite today's across the board drops on refined prices, (-.0262 UL & -.0255 RBOB) this week saw oil prices overall continue to tick upward. 

Last week's market pushed up on hopes of progress against COVID with vaccine rollouts and encouraging signs of demand growth on fuels. This week however, those hopes were dashed as talk turned to a variant strain of COVID found in the UK that has caused surging infections, and prompted the "Christmas Lockdowns" in other European nations to become increasingly severe. This has all but wiped out any hope of demand stabilizing in the near term.