12.08.2022 Energy
Dec 08, 2022
December 8, 2022
In the last 3 weeks traders have sold 190 million barrels of their positions which is massive! In normal Energy market times this would be an absolute indication to cover all Energy needs for this year and possibly even 2024. Unfortunately we need to also balance the likelihood of more Federal interest rate hikes causing a possible recession into next year which is holding prices flat making it difficult to go “all in” on Energy needs. As for the sanctions and price cap on Russian crude oil we are learning China has booked purchases from Russia outside of this price cap, also noteworthy is that most December Russian crude ship loadings are sold with less than approximately 5% of scheduled December ship loadings not sold. So much for sanctions!! In yesterday’s weekly inventory report it showed us crude stocks down 7.3 MB, diesel stocks up 6MB due to lower demand and moderate exports (so much for a diesel shortage), gasoline stocks up 5.3MB and propane stocks down 1MB. My recommendation considering all of these factors as well as crude oil hovering around $71-$72 a barrel is to be prepared to pounce on 2023 Energy needs for all products and we’ll also look at 2024 if/when we see hedge fund traders begin to position back into oil.
Thank you,
Bill Pelzel
In the last 3 weeks traders have sold 190 million barrels of their positions which is massive! In normal Energy market times this would be an absolute indication to cover all Energy needs for this year and possibly even 2024. Unfortunately we need to also balance the likelihood of more Federal interest rate hikes causing a possible recession into next year which is holding prices flat making it difficult to go “all in” on Energy needs. As for the sanctions and price cap on Russian crude oil we are learning China has booked purchases from Russia outside of this price cap, also noteworthy is that most December Russian crude ship loadings are sold with less than approximately 5% of scheduled December ship loadings not sold. So much for sanctions!! In yesterday’s weekly inventory report it showed us crude stocks down 7.3 MB, diesel stocks up 6MB due to lower demand and moderate exports (so much for a diesel shortage), gasoline stocks up 5.3MB and propane stocks down 1MB. My recommendation considering all of these factors as well as crude oil hovering around $71-$72 a barrel is to be prepared to pounce on 2023 Energy needs for all products and we’ll also look at 2024 if/when we see hedge fund traders begin to position back into oil.
Thank you,
Bill Pelzel