Energy Prices (Daily Change)
| Up/Down | Price | Change | |
|---|---|---|---|
| Crude Oil | ↓ | 89.55 | -2.09 |
| Heating Oil | ↓ | 3.7154 | -.1017 |
| RBOB Gasoline | ↓ | 2.6059 | -.0885 |
| Natural Gas | ↑ | 9.127 | +.085 |
All prices updated at end of day using CME settlements.
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European gas and power prices continued to pull back from the extreme highs set last week. WTI has joined the party with prices falling below $90, although more critical near-term support is around $85.
US gasoline prices continued lower as well. With 2.75 support broken charts look pretty weak for gasoline.
Demand Destruction
Gasoline prices had begun to pull back before last week, however, having put in a top on June 10.
What happened here is more straight forward, people stopped driving.
And now entire economies are joining the demand destruction trend.
“It is not a success, but the expression of a massive problem.”
+German companies halt production to cope with rising energy prices – FT
I mentioned just yesterday how Germany was successfully building its gas reserves in preparation for winter. But this isn’t what they were hoping for to put the market back in balance.
Beware the Supply Shock
While reduced demand may be giving relief to energy prices, there is an underlying tension with depleted reserves.
There is just no cushion, which leaves the market prone to price shocks.
+EIA estimates show a decrease in global surplus crude oil production capacity in 2022 – EIA
+Russia deepens Europe’s energy squeeze with new gas halt – FT
Russia’s Opportunity
Extreme price dislocation has also kept Russia’s economy afloat despite crushing sanctions due to the war in Ukraine.
Energy is a non-negotiable item, and countries will get it where ever they can get the most for their buck.
+Russia confounds the West by recapturing its oil riches – WSJ
+Russia just exported the most oil in any August on record – Markets Insider
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Macro Energy
+Iran seeks stronger US guarantees for revival of 2015 nuclear deal – Reuters
+Analysis: Surging energy prices create perfect storm for UK bonds – Reuters
Macro Economy
+Stocks fall for fourth day to end lower for month – WSJ
+Eurozone inflation rises to record 9.1% – FT
Other News
+UK pubs warn of mass closures as energy crisis deepens – NDTV
