Energy Futures Higher To Start The Day With ULSD Leading The Way

Energy futures are green across the board so far this morning with ULSD leading the way higher with +2% gains. Gasoline, WTI and Brent crude oil futures are trailing behind, each drifting higher by about 1% to start the last trading session of the week.

If WTI can stay above the $75 dollar mark today, this will be the fourth consecutive week the American crude oil benchmark has risen. While weaker-than-expected Chinese economic data initially spurred the week’s rally, it's expected Beijing will step in with stimulus programs to get things going again, post its COVID lockdown policy. The tightening of Russian and Saudi crude oil exports is what the buyers are citing today as the reason to finish the week higher.

The Wall Street Journal published an interesting article highlighting the prominence of Corpus Christi Bay when it comes to oil exports. Being the closest deep-draft port to the Permian Basin makes Corpus the dominant hub for exporting U.S. produced crude oil, but the pipelines supplying the Bay are nearing capacity. While some companies like Enbridge are focusing on infrastructure expansion, the City of Corpus Christi is attempting to future-proof its energy export economy, applying for grants aimed at hydrogen energy research.

Our fledgling disturbance in the Atlantic Ocean is now given a 40% chance of development over the next week as it heads westward towards the Lesser Antilles. While this year’s El Nino was anticipated to keep a lid on cyclonic development, the extremely warm water in the Atlantic may override the effects of strong vertical wind shear. We will keep you posted on El Nino vs Hot Tub as the season progresses.

Click here to download a PDF of today's TACenergy Market Talk