WTI is up $4.98 at $72.00 RB is up 11.72 cents at $2.4027 ULSD is up 35.94 cents at $2.9554 (these prices reflect the change from the April futures settlements from Friday)
Overview Energies are much higher today, gapping up over the weekend on the back of the US/Israeli attacks on Iran and the fallout from the attacks.
A wave of attacks on the Mideast region stretched into a third day, resulting in the suspension of most oil production in Iraqi Kurdistan and several major Israeli gas fields, throttling exports to Egypt. (Reuters) As one analyst quoted by Barron's said :" the Strait of Hormuz is effectively closed". Although Tehran maintains that the waterway remains open, several shipping companies have begun rerouting vessels away from the narrow passage as a precaution. (Trading Economics)
US Defense Secretary Hegseth said today that "this is not Iraq; this is not an endless war." Hegseth further stated that the US' objective is to "destroy Iran's missiles, Navy and deny Iran nuclear weapons." (Bloomberg) Iran’s Supreme National Security Council Secretary, officially declared on Sunday : "We will not negotiate with the United States". (Al Jazeera)
Saudi Aramco shut its Ras Tanura refinery after a drone attack. The refinery is Saudi Arabia's largest with a capacity of 550 MBPD. (Reuters) Asia's jet fuel and diesel cash premiums rose to 3 1/2 year highs today amid concerns over supply disruptions.
The US and Israel launched attacks on Iran on Saturday, killing Iran's Supreme Leader and many key military officials. Iran retaliated, striking several different targets in the region. Ports in Dubai and Oman were hit by drones as Iran has launched missile and drone barrages at Gulf states. (Al Jazeera) Vessels in the area were instructed on Saturday by Iran's Islamic Revolutionary Guard Corps, the country's leading military intelligence force, over the radio that "no ship is allowed to pass the Strait of Hormuz," according to Reuters. At least three ships have been attacked near the Strait of Hormuz. At least 150 tankers have dropped anchor in open Gulf waters beyond the Strait of Hormuz.
Indian refiners may revert to buying Russian crude oil amid the events unfolding in the Mideast.
Technicals-- The energies have gapped up over the weekend. The RB gapping up over the weekend is also a function of the nearly 21 cent premium that April had over the expired March futures contract. The spot RB and WTI futures saw their session highs on the opening of the market last night, while the ULSD & Gasoil have since made fresh highs. The energies are trading over their DC chart upper bollinger bands. Momentum for the RB and Gasoil are near overbought. Brent and WTI DC chart based momentums have turned positive with today's rally. ULSD DC chart based momentum is trying to turn positive from a neutral condition.
Natural Gas --NG is up 13.6 cents at $2.995---NG prices have risen in tandem with the other energies after a tepid opening last night and are supported by the news from Qatar of a force majeure on LNG deliveries. TTF European prices have risen dramatically.
Qatar today has declared force majeure on LNG deliveries. (Bloomberg) Qatar's government said an energy facility belonging to gas giant Qatar Energy was attacked by two Iranian drones on Monday, with authorities still assessing the damage. (Reuters) About 20% of global LNG exports come from the Gulf, primarily Qatar, and are shipped through the Strait of Hormuz, according to data from energy consulting firm Kpler. (CNBC)
TTF European spot futures have risen dramatically, gapping higher over the weekend. Currently the TTF spot futures are trading up almost 50% from their Friday settlement.
Money managers added a lot of net short positions in NG futures/options on the CME in the week ended Tuesday February 24. Net short positioning rose by 48,866 contracts to a total net short of 75,706 contracts. The increase was due to over 40,000 contracts of new shorts having been added.
Technically the NG DC chart's bollinger bands have tightened even further from what we saw last week, thus signaling a breakout is likely from the recent range. Momentum on the DC chart has turned positive.
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