Energy Market Update – September 27, 2023
Crude and products are moving higher today. We are continuing to see a battle between tight supply and impacts of high interest rates and how they affect demand. Saudi Arabia and Russia’s plan to keep collective production cuts of 1.3 million barrels per day in place through the end of the year is also playing a role in higher market pricing. Recent discouraging economic data from Europe and the U.S. on Tuesday, the Bank of England indicated its intentions to keep rates at 5.25% until at least July 2024, a sign that like U.S. interest rates, seem destined to remain elevated for a longer period of time than expected a few months ago. Most economists are still predicting a soft landing for the U.S. economy, even though the Fed is likely to raise interest rates at least one more time in order to achieve its 2% inflation rate.
Crude inventory at the trading hub of Cushing, OK has dropped to 21.958 million barrels. This puts Cushing inventories at a 14-month low. Reports say the minimum operational level for Cushing is 20 million barrels. This is causing concern in crude markets resulting in a spike in crude price. The market is reacting to the situation raising prices to try and discourage crude exports and domestic demand while encouraging more imports and production. This could continue until the market sees some change in the disposition at Cushing. This week’s DOE report is below.
Propane prices are climbing today. This is due to a lighter than expected build for this week and the strong rally by crude oil. Propane exports jumped to 2 mbpd this week which led to the smaller than expected build, along with a draw in the Midwest region that could be a combo of retailer fills and flow of product into the Belvieu region to be exported. See this week’s DOE report above.
NuWay-K&H Cooperative Customer Portal
Through our portal, you can check billing, make payments, request a quote, check previous years product usage, see invoices and statements, and much more. We also offer digital contracting through the portal where you can sign and pay your energy contracts through our mobile app or desktop site. Click here to log in!