The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil pushed higher (by $8.42 or +10.1%) to $97.13 per barrel in February. That increase occurred within the context of a virtually unchanged U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of December’s increase of 169,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.8 million BPD, and accumulated oil stocks that deviated below the bottom of the five-year-average range (February average: 413 million barrels).
Selected highlights from the 1 March 2022 issue of OilPrice.com‘s Intelligence Report include:
Once
again, a fairly sound idea of releasing 60 million barrels from strategic
inventories held by International Energy Agency (IEA) members went almost
completely unnoticed by the oil markets. Instead, Russia remains the number one
topic on the agenda -- after its central bank was sanctioned, several banks cut
off from SWIFT, new debt and equity was restricted even more than they used to
be, and the prospect of seeing some 4.7 million BPD of crude flows (Russia's
average crude exports this year so far) sealed off grows. Despite the
heavy-hitting sanctions and a string of oil majors hurriedly leaving Russia,
there are very few signs that the Kremlin's invasion of Ukraine will end soon.
Uncertainty remains rife in oil markets and the price of both WTI and Brent are
soaring.
IEA Greenlights 60 Million SPR Release. Facing the prospect of prolonged high oil prices,
IEA members reportedly
agreed on the release of 60 million barrels of oil from strategic storage, with
half of the given volume coming from the United States.
Goldman Sachs Sees a Commodity Rally Developing. An analytical
note by Goldman Sachs is predicting a tangible commodity spike for all things
Russia-relevant starting as we speak, including oil, gas, palladium, nickel,
wheat, and corn, lifting its one-month crude forecast to $115 per barrel
already.
OPEC Defends African Oil Investments. OPEC secretary Mohammad Barkindo stated
it would be a tragedy if African countries, still accounting for less than 3%
of global emissions, would not be able to tap into their plentiful oil
resources, saying the continent's development needs should take center stage.
EU to Connect Ukraine to Power Grid. The energy ministers of European Union members agreed
to urgently link Ukraine's power grid to the EU, as the East European country
decoupled its grid from Russia so that the former could not control technical
aspects such as grid frequency.
U.S. Supreme Court Questions Federal Emission Regulations. The U.S. Supreme Court is weighing the authority of the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from coal- and gas-fired plants under the Biden Administration's Clean Air Act, potentially restricting its authority.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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