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Oil is rising but stocks are falling. The UK Economy looks shaky. AI stocks tumble on border concerns about valuations and worries about Fed Policy going forward. Yet for oil it was the report that a Ukraine drone attack hit the crown jewel of Russia’s Black Sea trade the Novorossiysk Port which is Russia’s #1 commercial port causing halted oil exports and a shutdown of the oil pipelinemonopoly.

The attack is not only moving oil but grains and wheat as well as the port handles 30% of Russia’s seaborne exports (oil, grain, coal, fertilizers). This also includes the Sheskharis oil terminal alone which can push 60 million tons of crude a year.   

Economically speaking, Novorossiysk isn’t just another port—it’s Putin’s pressure valve under sanctions. After Russia’s 2022 invasion of Ukraine torpedoed the UN grain deal in July 2023, this place shot to the top—becoming Moscow’s main lifeline for exports. In the 2024–25 season alone, Novorossiysk hurled about 50 million tons of grain onto the world market, filling the gap left by shuttered Black Sea routes.

And oil? That shadow fleet of creaky, uninsured tankers—think a thousand voyages a year, per Windward intel—keeps loading up discounted Urals crude over the G7’s magically disappearing $60 price cap and steaming off to any buyer willing to look the other way. This isn’t just logistics—it’s economic survival, Russian style. Nostrovia!

We should be finding some support as well from the fact that the promised crude oil glut is failing to hit on the US shores and the increased risk to supply out of Russia’s causing another surge up in the diesel crack spread this morning and even turning around the gasoline crack. What are cracks? Call Phil Flynn at 888-264-5665 learn all about them. 

Where is the glut? Not in this week’s Energy Information Administration (EIA) report. Actually, our attention should be on U.S. petroleum demand, which reached an impressive 20.77 million barrels per day last week. So, yes, the headline says U.S. commercial crude inventories (excluding the Strategic Petroleum Reserve) rose by 6.4 million barrels in the last week. Sounds like a build, right?

Let’s not get too carried away. At 427.6 million barrels, we’re still running about 4% below the five-year average for this time of year—hardly screaming “glut” from the rooftops. And how about gasoline? Total motor gasoline inventories fell by 0.9 million barrels, also sitting 4% under the five-year norm. Now, finished gasoline inventories may have edged higher, but blending components slipped—so we’re playing a shell game here, not a sign of overflowing tanks.

Distillate fuel inventories? Down again by 0.6 million barrels and now a hefty 8% below the five-year average. So, with all this talk of oversupply, you have to wonder: where’s the flood of oil everyone keeps promising?

Natural gas is continuing to rise even as we get ready for what may be the last warm up of 2025 before we fall into an arctic blast abyss. The Wall Street Journal points out that the onset of cold weather and record LNG exports have driven natural-gas prices to their highest levels since fuel markets spiked following Russia’s 2022 invasion of Ukraine. The Journal says that this is good news for U.S. drillers, who suffered through a supply glut and some of the lowest prices on record last year. 

Those prices are well above the EIA’s forecast of $3.90 this winter.The Jornal says that A rush to ship liquefied natural gas, or LNG, to European allies after Russia invaded Ukraine and its energy exports were blacklisted by the West pushed domestic gas supplies into a big deficit that sent prices soaring. Once markets adjusted to the shock, U.S. gas inventories flipped into a surfeit that depressed prices.

Gas producers choked back output and slashed their drilling plans last year in response to low prices, but they have become so efficient that overall production levels barely budged from their record-setting course.

Domestic storage caverns are starting this heating season filled with about 4% more gas than the five-year average, which is similar to last year.

FOX Weather is also keeping the forecasts rolling as natural gas gets ready to navigate weather volatility and projections for what could be the coldest winter in a decade. FOX Weather reports, “After a pre-winter arctic blast set more than 80 record low temperatures across the eastern U.S. earlier this week, a major warmup is on the way, with parts of the Heartland expected to surpass the 80-degree mark by the weekend. More than 80 record low temperatures were set on Tuesday, as a large dip in the jet stream allowed arctic air to spill south into the U.S. some three weeks before meteorological winter.

Over 190 million Americans experienced below average temperatures, which allowed snow to stick across parts of the Southeast. Macon, Georgia dropped to 25 degrees, breaking a 100-year-old record. The long-range temperature outlook from NOAA’s Climate Prediction Center shows most of the eastern U.S. remaining at or above average through mid to late November. Yet looking into December, that could change dramatically going the other direction so get the Fox Weather ap to get prepared.

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