12.01.2022 Energy

In the next few days it will be interesting to see how the global oil market reacts to the potential elimination of Russian crude oil from the energy sector as well as the possibility of a railroad workers strike. Yesterday’s EIA inventory report showed a large crude oil draw, currently US crude inventories are at 389.1 million barrels versus approximately 603 m/b at this time last year. Not surprisingly US crude exports were 4.9 m/b day versus 2.7 m/b day versus last year, finished diesel exports were a whopping 1.3 m/b day last week compared to 588,000 at the same time last year. Asia including China were the major importers of this extra product. Confusingly there has been significant price downside in the spot gas & diesel market not so much in the futures pricing, where will it go from here is not an exact science. Will a price cap on Russian crude drive the markets back up from this point? Will Russia supply crude to countries enforcing a price cap? No one knows for sure but what I do know is current pricing definitely deserves a look. If you have not locked in all of 2023 diesel needs please consider doing so as we watch how these worldly events play out in the next week. I also feel we may be in a good place to consider locking in summer of 2023 gasoline needs.
 
As for propane there is not much to talk about at the moment, the market has been flat as inventories were reported to be up last week as well as up some 18 million barrels over last year from an overall stock perspective. If propane exporting picks up and cold weather brings about stronger demand we may need to take a look at pricing for the 2023 season sooner than later.
 
As always please call either Energy office for pricing/contracting info the entire CRC Energy staff can help with any and all needs!
Thank you,
 
Bill Pelzel