Energy Market Update: July 14, 2023

Production shutdowns in Libya and Nigeria have led to strain on inventories and strengthened demand for US crude. Libya is shut down due to protest at some of their oil fields. This has resulted in halting nearly 370K barrels per day. Shell shut down Nigeria’s loading into a terminal. They did this as a precaution for a possible leak. This outage is affecting 225K barrels per day of crude oil production.

The US dollar value has been dropping compared to a basket of other currencies. This in turn gives support to the commodity prices and other assets. The US dollar has dropped 13% against the referenced currencies, putting the US dollar at its lowest level in 15-months. Treasury yields have eased in recent sessions, which has made the dollar less attractive to other currencies, in particular the Japanese Yen.

Trading today appears to be flat at the time of this writing. Heading into the end of the week, markets are digesting a lot of items, expected increase in demand, tightening of supply toward the end of the year. The DOE report earlier this week showed large builds (see chart below). The complexity of the global market is showing through with the US dollar value tumbling adding more support to the market.

 

Propane

We have seen some strength in the propane market the last couple of days. On the EIA report Wednesday of this week (Chart pictured above) we saw a build of 2.7 million barrels, which was spot on with the industry expectations. Propane Exports were up 1.612 million barrels per day. Last week exports were at 1.25 million barrels per day. That is an increase of 362,000 barrels per day. Domestic demand was down 528,000 which is normal in the middle of summer.

We are currently offering contracts for this coming heating and drying season, please contact your Energy Account Manager with any needs or questions that you may have.

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