Coquest Daily Energy Report

Crude Oil Futures for December 2022 settled down $0.47 @ $84.58/bbl. trading in a $3.29 range including the overnight-RBOB settled up 6.82/cpg and Heating Oil settled up 8.78/cpg. The main concern among those watching SPR levels has been its replenishment. Because of the massive draws that the Biden administration implemented as a tool for keeping a lid on energy prices, inventories at the SPR are now at the lowest in almost 40 years, at 405 million barrels. “The Administration intends to repurchase crude oil for the SPR when prices are at or below about $67-$72 per barrel, adding to global demand when prices are around that range,” the White House said in a fact sheet this week. It went on to add that “This repurchase approach will protect taxpayers and help create certainty around future demand for crude oil. That should encourage firms to invest in production right now, helping to improve U.S. energy security and bring down energy prices that have been driven up by Putin’s war in Ukraine.”

Natural Gas Futures for November 2022 settled up $0.240 @ $5.199/mmbtu trading in a 0.509 cent range including the overnight session. The leaders of the European Union failed to reach an agreement on a cap on gas prices, ending the latest round of discussions in the late hours Friday with a decision to keep exploring options. The idea of a price cap on gas imports was floated earlier this year and supported by 15 EU members, including Italy, Spain, and Eastern European countries. Others, however, are strongly opposing it, notably Germany and the Netherlands. The concerns of those opposing the bill center on the possibility that a price cap will interfere with market signals and lead to higher consumption, which is the last thing the EU wants right now. Last night, however, Germany’s Chancellor withdrew his government’s opposition to a cap, potentially opening the way to an agreement.


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