03.18.2024 Energy

Mar 19, 2024
The price of crude oil as well as gas and diesel have been in a steady march higher since mid-last week.  A couple reasons for the recent increases are a prediction by the EIA that crude oil production will have a tough time keeping pace with 2024 demand speculation. Also, we have seen Ukraine increase attacks on Russian refineries, most notably with drone use. These drones can fly up to 620 miles carrying a 45lb warhead at 90-120 mph and strike very precisely. Each of these drones costs Ukraine around $100,000 to build. In just the last few days we have seen these attacks add an additional $2-$3 per barrel to the crude price, as it has hindered upwards of 1.5MB day of Russian refinery assets. Reports state these attacks will continue taking out more of Russia’s capacity which has fundamentally changed the global fuel markets.  For those of you wanting to lock fuel and budget in pricing, now is the time as forward pricing in theory should continue to increase as supply and geopolitical tensions weigh on the energy sector.

Another bit of news that bears watching is the Federal Reserve meetings being held this week to discuss interest rates. Short and sweet if the FEDs hold rates steady for now we would typically see crude pricing go lower, just the opposite if rates are lowered. Seems like a no-win situation but something we need to be aware of and react accordingly.

Thanks for reading!

Bill Pelzel
CRC Energy Manager
Filed Under: AssetsAttacksBarrelCrudeDroneFederalGasOilReserveRussiaSupplyUkraine