Phil Flynn
Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
Translate
Too Hot? The Energy Report 02/27/2023
Global oil markets are having a hard time determining whether they should worry about the economy. Is it too hot or too cold. Red hot inflation data in the US sent the stock market tumbling and weighed on oil even though there are signs of an increase in risk to supplies.
Over the weekend, a sign of what may be more to come, Russia cut oil flows to Poland, following through on their threat to not sell oil to any country, directly or indirectly, involved with the EU price cap. Later, Russian oil pipeline monopoly Transneft on Monday said there were no flows of oil to Poland because the paperwork for supplies in the second half of February had not been completed, Russia’s TASS news agency reported. Yet the reality is that this is Russia’s first shot across the bow and should serve as a warning to those that ideally dismiss Russia’s threat to not sell oil. It should also serve as a warning to the grain trade as well.
While the US sends record amounts of oil and gas to Europe, there are signs that because of low natural gas prices and the Biden administrations’ selling of Strategic Petroleum Reserves supplies, that US oil and gas drillers are pulling back. Reuters reported that – U.S. energy firms in February cut the most oil and natural gas rigs in a month since June 2020, with the gas rig count falling to the lowest since April, energy services firm Baker Hughes Co (BKR.O) said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, fell seven to 753 in the week to Feb. 24. Despite this week’s rig decline, Baker Hughes said the total count was still up 103 rigs, or 15.8%, over this time last year.
There are true signs in the marketplace right now that the Biden administration’s unprecedented intervention of releasing Strategic Petroleum Reserve supplies is going to leave the market short later in the year. The market has become dependent on strategic reserve supplies like a drug addict is on drugs. It will start to be painful when they start to realize that there are no more supplies from the SPR. Losing the SPR release is like losing the 16th biggest oil producer in the world and that’s going to be felt especially when the US refiners start to come out of maintenance. The foolishness of these policies will be very apparent later in the year.
One of the most bullish factors for oil continues to be the reopening of the Chinese economy. S&P Global Platts reported that China’s small independent refineries doubled their fuel oil imports the month in February amid good refining margins and a tight supply of the alternative feedstock bitumen blend, refining, and trading sources told S&P Global Commodity Insights Feb. 27.
Make sure that you take the time to invest in yourself. Tune to the Fox Business Network! Invested in you!
Open your futures trading account and try the wildly popular Phil Flynn Daily Trade Levels. Call Phil Flynn at 888-264-5665 or email me at pflynn@pricegroup.com.
Phil Flynn
The PRICE Futures Group
Senior Market Analyst & Author of The Energy Report
Contributor to FOX Business Network
141 West Jackson Blvd., Suite 1920, Chicago, Illinois 60604
312 264 4364 (Direct) | 888 264 5665 (Direct) | 800 769 7021 (Main) | 312 264 4303 (Fax)
www.pricegroup.com
Please do not leave any instructions for orders in your message, as we cannot execute instructions left through email or voicemail. Orders must be entered via direct verbal communication with a representative of our firm. We cannot be held responsible for orders left in any other manner. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. Member NIBA, NFA.
Questions? Ask Phil Flynn today at 312-264-4364