Energy Tidbits 12.26.2023
Dec 26, 2023
12-26-23
Current Energy headlines are mainly focused on the issue in the Red Sea, as of Friday December 22nd the United States and many other nations have launched a joint patrol operation to provide safe commerce travel through the Red Sea. Iranian aligned Houthi militants were and stated they will continue to attack ships traveling through the Red Sea for as long as Israel continues their offensive in Gaza. In actuality this has caused minimal impact to oil, yet it has traders cautious of the situation. For anyone like me that struggles with geography, the Red Sea connects with the Suez Canal, which is a gateway between Asia and Europe, a route used for about 12% of global trade, I’ll be googling a map of this as soon as I have time! Crude oil is starting today trading higher receiving support from the Red Sea situation as well as analysts’ prediction that the FED will lower interest rates as we roll in 2024, in theory lowering interest rates will boost the global economy and increase demand.
For those looking to do some energy positioning prior to the year-end, I feel we are currently in a nice place, price wise, to take delivery and/or contract for 2024 needs. Crude oil is close to a 6-month low, demand is naturally low this time of year, and hedge fund traders do not own a lot of crude oil now, typically the traders will buy back in sooner than later causing an upward price trend. We all need to remind ourselves it is nearly impossible to “cherry pick” or predict when the lowest prices of the year will be. In our world of constant volatility with large price swings minute by minute it is hard to keep up, ask me in 12 months when I think the low will be and I’ll look back and tell you when it was!! As always please reach out to any of our CRC Energy offices for pricing info, all admin staff members will be more than happy to provide current intel as well as current product pricing.
Thank you,
Bill Pelzel
Energy Manager CRC
Current Energy headlines are mainly focused on the issue in the Red Sea, as of Friday December 22nd the United States and many other nations have launched a joint patrol operation to provide safe commerce travel through the Red Sea. Iranian aligned Houthi militants were and stated they will continue to attack ships traveling through the Red Sea for as long as Israel continues their offensive in Gaza. In actuality this has caused minimal impact to oil, yet it has traders cautious of the situation. For anyone like me that struggles with geography, the Red Sea connects with the Suez Canal, which is a gateway between Asia and Europe, a route used for about 12% of global trade, I’ll be googling a map of this as soon as I have time! Crude oil is starting today trading higher receiving support from the Red Sea situation as well as analysts’ prediction that the FED will lower interest rates as we roll in 2024, in theory lowering interest rates will boost the global economy and increase demand.
For those looking to do some energy positioning prior to the year-end, I feel we are currently in a nice place, price wise, to take delivery and/or contract for 2024 needs. Crude oil is close to a 6-month low, demand is naturally low this time of year, and hedge fund traders do not own a lot of crude oil now, typically the traders will buy back in sooner than later causing an upward price trend. We all need to remind ourselves it is nearly impossible to “cherry pick” or predict when the lowest prices of the year will be. In our world of constant volatility with large price swings minute by minute it is hard to keep up, ask me in 12 months when I think the low will be and I’ll look back and tell you when it was!! As always please reach out to any of our CRC Energy offices for pricing info, all admin staff members will be more than happy to provide current intel as well as current product pricing.
Thank you,
Bill Pelzel
Energy Manager CRC