Supply Concerns Push Crude Prices Higher
July 25, 2023
The energy markets traded higher yesterday driven by news of some refinery issues and maintenance. RBOB was the market that traded up the most as news hit that ExxonMobil refinery in Baton Rouge may be idled for a few weeks of repairs. Also, there is an upcoming turnaround at Monroe Energy refinery in Trainer, PA. China is also talking about more stimulus for their economy keeping the hope alive that China demand will at some point show up, and support prices.
Crude oil was up more than 2% as the outlook for supply to be shorter than demand in the back half of the year gets more attention. Crude inventories are 1% above the five-year average. Gasoline inventories are 7% below the five-year average. Distillates are 14% below the five-year average. Propane is 24% above the five-year average.
Citi Research said its short-term momentum model is pointing to higher price levels heading into late July for most commodities. Citi sees some upside for crude oil this summer, with its 0–3-month target of $88 dollars per barrel and an average of $83 dollars per barrel for the third quarter.
From Bloomberg. Saudi Arabia’s receipts from oil sales abroad in May decline to the lowest level since September 2021 amid a sputtering recovery in energy markets.
The Fed begins their two-day meeting today and most expect the announcement tomorrow that they will raise the Federal funds rate 25 points.