Russia Halts Pipeline Exports to Poland
February 27, 2023
Crude oil and refined product prices rose on Friday, except for the nearby RBOB gasoline futures contract which fell.
Baker Hughes reported that 7 oil rigs came offline and that brings the US total oil rigs to 600. The US now has 83 few rigs online than March 2020 when the pandemic started.
Russia halted pipeline exports to Poland over the weekend. The reports were that a pipeline operator didn’t receive the supporting documents for the shipment. Others speculated this was a retaliation of Poland delivering the first of their tanks to Ukraine.
The outlook for the Fed to continue raising interest rates continues to rally the dollar and puts pressure on energy prices.
Vitol forecast crude oil price to hit $90-$100 per barrel in the second half of 2023. Near term there appears to be some pressure on prices. JPMorgan said oil is more likely to drift toward $70 here in the near term as global growth headwinds strengthen and excess ”dark” inventory exacerbated by a flooding of Russian oil is worked off. The bank also said they expect OPEC to cut production in order to limit oil price declines. There is a lot of maintenance work that has begun on refineries, and this should back crude oil stocks up in the system which would lead to crude inventories continuing to build.
Crude inventories increased by 7.6 million barrels last week and are now 9% above the five-year average. Total gasoline inventories decreased by 1.9 million barrels and are now 5% below the five-year average. Distillate inventories increased by 2.7 million barrels and are now 12% below the five-year average.