Russia-Ukraine Tensions Could Disrupt Oil Market
January 26, 2022
The energy markets continue to rally and price in concerns about supply disruptions related to Russian and Ukraine tensions, the UAE and Iran Houthis missile attacks on the rise, and OPEC+ struggling to increase output to meet their production targets.
The API inventory report called crude oil supplies down 875,000 barrels, Cushing, Ok crude stocks were down 1.0 million barrels. Gasoline supplies were up 2.4 million barrels and distillate supplies were down 2.2 million barrels.
The US Department of Energy announced a loan of 13.4 million barrels of crude oil from its strategic reserve as part of a renewed effort by the Biden Administration to contain oil prices. The awards to seven companies are the second-largest release of oil from the SPR and bring the total amount of oil released from the reserve to nearly 40 million barrels.
Senior Biden Administration officials said they were in talks with energy-producing countries and companies around the globe to avoid a potential supply disruption to Europe from Russia if the situation escalates between Russia and Ukraine.
The Federal Reserve will conclude its two-day meeting today and is not expected to announce any immediate change to its policy, but they are likely to signal a rate hike in March.
The average estimate for today’s propane inventory update is for supplies to decrease by 3.43 million barrels. The five-year average for this reporting week of the year is a 3.907 million barrel decline in inventory.