Coquest Daily Energy Report

Crude Oil Futures for May 2023 settled up $0.09 @ $80.70/bbl. trading in a $1.01 range including the overnight-RBOB settled down 0.68/cpg and Heating Oil settled down 7.05/cpg. Japan has begun purchasing Russian crude oil above the $60.00/bbl. price cap, breaking with Western allies thanks to an exception authorized by the United States. As many European nations attempt curtailing themselves off Russian oil in response to the invasion of Ukraine, Japan stepped up its purchase of Russian natural gas. Japan has almost none of its own fossil fuels, heavily relying on imports for much of its energy needs. Some analysts believe this dependency influenced Japan’s hesitancy to fully back Ukraine against Russia. To date, Japan is the only G7 member not to have supplied Ukraine with lethal weapons. Despite the concession, Russian natural-gas imports to Japan are relatively small, accounting for around one-tenth of Japan’s supply and a fraction of Russia’s output. Most of what Russia exports to Japan comes from the Sakhalin-2 project in Russia’s Far East.

Natural Gas Futures for April 2023 settled down $0.144 @ $2.011/mmbtu trading in a 0.189 cent range including the overnight session. Domestic natural gas prices last week plunged to a 30-month low, crossing below $2.000 per million British thermal units for the second time this year-even as some producers have cut drilling to stave off further declines. Since the start of the year, U.S. gas futures have dropped by about 50.0%, a record drop for a quarter on rising output and mostly mild weather so far this winter that kept heating demand low and allowed utilities to leave more gas in storage than usual. The amount of gas in U.S. storage, sits about 21.0% higher than is normal for this time of year, and that surplus will set up U.S. inventories to reach record highs before next winter’s heating season.


Receive the full Coquest Daily Energy Report by signing up today.

To send a question to the author, or to learn more about this topic, click here.

For assistance with brokerage or hedging services, please click here.


Disclosure: The risk of loss in trading futures and/or options is substantial. Past performance is not indicative of future results. The information in this message derived from third-party sources is believed to be accurate and reliable; Coquest does not guarantee the accuracy or completeness of the information. Opinions expressed in this material are subject to change without notice. This report should not be interpreted as a request to engage in any transaction of futures, options, and/or OTC derivatives. The information contained in this material is not to be relied upon in substitution for the exercise of your independent judgment. Seek independent financial, tax, legal, and accounting advice from your own professional advisers, based upon your particular circumstances.