About The Author

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

Oil prices are trying to recover from the banking fiasco that divorced petroleum prices away from supply and demand fundamentals. Now with reports that First Citizens Bancshares Inc. has agreed to buy Silicon Valley Bank, and the fact that chairman of Saudi National Bank, Ammar al-Khudairy, the man that started a run-on Credit Suisse bank said that he is resigning for “personal reasons”, it might give oil and product prices a reason to rally as we prepare for another week where we should see supply in storage drop significantly.

Oil and petroleum products have been down on a crisis of confidence not based on current supply and demand fundamentals and that could do huge damage long term, not only to the production side of oil but the refining side as well. The banking crisis may create a situation where we see tighter supplies than we normally would have in the coming weeks and months.

On top of that Saudi Arabia, that has been pushed closer to China by the Biden Administration, has announced a major deal agreeing to buying a 10% stake in a Chinese oil complex. Bloomberg News reports that Saudi Aramco will spend $3.6 billion in a deal to expand its refining presence in China. Saudi Arabia also pledged at least 480,000 barrels a day of crude oil to the Rongsheng Petrochemical refinery for 20 years. This story will come as a huge disappointment to energy secretary Jennifer Granholm as well as other Biden administration officials who have been touting China as a leader in green energy transition.

The resignation of Ammar al-Khudairy at Saudi National Bank, reminds us that we have to be careful about what is said especially when it comes to international banking. Care must also be taken if your  country holds a lot of money in a particular bank and you come out flatly and say absolutely not will you invest any more money if the bank gets in trouble. It kind of reminds me of Jane and Michael Banks and Mary Poppins. The only problem is I don’t think we’re going to see Mr. al-Khudairy flying any kites anytime soon.

We’re starting to see signs that confidence in the banking system is getting more solid even as concerns about which bank might be in trouble on Friday kept the market on edge. The bottom line is that the Federal Reserve is going to have to really reassess their messaging to the market as well as their interest rate increases to avoid more problems at regional and global banks.

Geopolitical risk factors are also supporting oil. China’s demand as well as the fact that Russia is going to put tactical nuclear weapons in Belarus is keeping the market on edge. Huge Chinese demand for oil and copper should keep those commodities very well supported. Reuters also reported that, “Iraq halted crude exports from the semi-autonomous Kurdistan region and northern Kirkuk fields on Saturday, an oil official told Reuters, after the country won a longstanding arbitration case against Turkey. The decision to stop shipments of 450,000 barrels per day (bpd) of crude relates to a case from 2014, when Baghdad claimed that Turkey violated a joint agreement by allowing the Kurdistan Regional Government (KRG) to export oil through a pipeline to the Turkish port of Ceyhan according to Reuters.

Bloomberg reports that, “Russia’s diesel exports are on course to hit a record this month despite European Union sanctions depriving the country of its biggest market. Moscow is so far shrugging off concern that the bloc’s recent import ban would force it to reduce exports amid a lack of alternative buyers. Instead, Turkey, Morocco and other nations have stepped up purchases — though some cargoes from Russia are also being held in floating storage.”

Natural gas looks weak. EBW analytics reports that, “The April contract repeatedly tested technical support last week, with intraday lows within a 2.5¢ range from $2.127-$2.152 from Tuesday to Friday. Supportive weather and a larger-than-normal EIA draw, however, proved sufficient to fend off downward pressure. A mildly bearish weekend weather demand loss and softening LNG feedgas demand prompted a swift retreat to the same level.

Stay tuned to the Fox Business Network as they are Invested in you!

Make sure you open your futures trading account and get a free trial of my Daily Trade Levels that gives entry, exit and stop points on most major futures markets. Call Phil Flynn 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 4399 (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 Phil Flynn

Questions? Ask Phil Flynn today at 312-264-4364        
Tagged with: