Energy Futures Prices Are Rebounding This Morning

Energy futures prices are rebounding this morning, mirroring yesterday’s move in the opposite direction. While the distillate contract is leading the way higher in pre-market trading, its gasoline and crude oil counterparts are keeping up closely as the whole complex trades 1.2%-1.7% higher.

“You’re firing me? Then I quit.”: Moscow’s Deputy Prime Minister issued a statement this morning announcing 500,000 barrel per day production cut in response to the sanctions/bans/price caps the West has placed on Russia’s oil exports. The reduction is expected to remove around 5% of the nation’s total oil output and is taking credit for the higher prices we are seeing this morning.

The combination of China relaxing their COVID policy, the continued war in Ukraine, and the trimming of Russian production has some analysts calling for $100 per barrel oil by the end of the year. Its difficult to refute that possibility given WTI prices hung out above that level from February to July last year, at the height of Shanghai’s coronavirus outbreak and subsequent lockdown.

Remember Environmental, Social, and Governance? It seems the once-popular corporate framework has taken a back seat since the outbreak of war early last year. While ESG falling out of favor has several financial and political implications, the push for mainstream adoption of renewable energy for the US’s industrial consumers has also taken a hit. While some tout progress being made in the way of reducing the global carbon footprint, others find it infeasible to replace fossil fuels in the foreseeable future.

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