02.23.2023 Energy

Feb 23, 2023
February 23, 2023

In this week’s EIA inventory report we saw crude oil levels increase by 7.6MB to 479MB against 416MB at this time in 2022. Currently crude oil production is moving along at a nice pace while imports and exports remain at manageable levels which is keeping the price of crude oil in check at approximately $75 as I write this.

Diesel stocks also increased per the report to 121.9MB versus roughly 120MB last year, diesel production as well as imports were up last week while exports and demand were down this has accounted for some of the recent diesel price drop.

Gasoline inventories fell last week in somewhat of a surprise for this time of year, imports were down and demand was up causing the gasoline price to show some current upside motivation.

Even with a 3MB draw on propane stocks over the last week we are a staggering 25MB above last year’s inventory levels (63MB vs 38MB). The primary drivers of the propane product stockpile are increased production, increased imports, and a decrease in exporting.

Moving forward I see the Energy market finding direction from the FED’s, if interest rates continue to climb as expected it will put downside price pressure on crude oil. To date the Russian price cap has had little to no effect on the Energy complex as Russia is finding ways to sell crude to China and others using 3rd party countries who do not fall under the price cap that has been in place on Russia since February 5th, if this changes it could offset interest rate hikes and provide crude oil with enough support to climb higher. In the meantime prices are favorable and should not be ignored for those still needing to position for Spring 2023 and beyond.
Thank you,
Bill Pelzel CRC Energy Manager