Energy Report: Green Wash

Oil traders must also prepare for a potential flood of Iranian oil if the U.S. rejoin the accord. Yet it might not be as quickly as traders thought last week. Iran’s grand Ali Hosseini Khamenei is signaling that he won't even talk to the Biden administration until all sanctions are lifted. I do not think even the Biden administration is ready for that seeing that Iran is currently violating the agreement and spirit.

Energy traders will also have to get ready for big draws in oil and product inventories. Refinery shutdowns, the biggest drop in U.S. production in history, will leave the country feeling the pain from this storm for some time. Massive drops in inventory and spikes at your local gas station. We do have some refineries that are restarting but it will be some time before we are getting back to normal.

Reuters reported that, "Exxon Mobil Corp has begun restarting its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery and adjoining chemical plant, a company spokesman said on Sunday. Exxon posted an online notice to nearby residents that the refinery was starting up after a shut-down driven by severe cold weather and the curtailment of the natural gas supply. Some units at the complex were kept in operation to return power to the grid, Exxon said in an earlier statement, producing 200 megawatts and supplying electricity to 100,000 homes.

North Sea oil production has been fading but to keep Brent a viable contract, they are tweaking it. Platts announced that from July 2022 it will incorporate into the current Brent basket (BFOET) a new grade: WTI Midland from the United States. The Brent benchmark won't just reflect just North Sea crude anymore.

Crude supplies should fall by 8 million barrels. Gasoline by 5 million barrels distillates by 5 million. 

Natural gas is fading with a bit of a warm-up yet may not be taking into account the massive production drop in the U.S.. Look to buy calls for summer on weakness. We should see a 343 withdrawal this week.

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Backyard Hiker 1 month ago Member's comment

Don't agree with this.