Energy Commentary

Monday, September 17, 2018


Today’s Market News


Iran: Iran’s crude exports continue to fall as more buyers look elsewhere for crude supply while US sanctions creep ever closer. Reports now show that India who is the second largest importer of Iranian crude has also started to cut imports. In a note from Bank of America Merrill Lynch to its clients they stated that Iranian crude exports have fallen by nearly 580,000 barrels in the past three months.


OPEC Meeting: Russian Oil Minister Alexander Novak said on Monday that all possible supply scenarios would be discussed that the OPEC and non-OPEC meeting in Algeria this month. When asked about increasing supply levels even further than where they raised them in June Novak said “I think we have the possibility to discuss any possible scenarios”. Novak also stated that Russia would be willing to discuss and cooperate with the U.S. in regards to supply but that no such discussions have taken place yet.


Hedge Funds: Hedge fund managers have continued their bullish stance on Brent but have turned away from WTI and refined fuels. Hedge funds and money managers have cut net long positions in the six main petroleum futures contracts by 29 million barrels. This comes after two weeks where they had boosted a bullish position by a total of 172 million barrels over two weeks.


Market Opinion: Prices are up this morning as traders are becoming worried about supply after US sanctions on Iran to take effect in November. Also keep in mind that harvest is beginning in the upper Midwest and will likely draw down US inventories, in which we could see higher local fuel prices through the early November.


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