- Oil extends gains to trade higher
- WTI is trading above $86/Bbl amid a weakening dollar
- The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of other international currencies) fell to its lowest in nearly three weeks
- A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
- Saudi Arabia’s energy minister defended OPEC+’s decision yesterday and criticized countries such as the U.S. for drawing upon their strategic reserves (Reuters, BBG)
- Prince Abdulaziz bin Salman, Saudi Arabia's energy minister, warned that " losing emergency stocks may become painful in the months to come " as some nations are using their emergency inventories to manipulate markets rather than helping to ease shortages
- The remarks follow President Biden's announcement that he will sell more crude from the SPR and outline a buyback mechanism for replenishing the SPR
- The diesel shortage that’s alarming the Northeast is spreading to the Southeast (BBG)
- “At times, carriers are having to visit multiple terminals to find supply, which delays deliveries and strains local trucking capacity,” said fuel supplier Mansfield Energy in a note to its clients
- “Because conditions are rapidly devolving,” Mansfield Energy is now requiring a 72-hour notice for deliveries in order to secure fuel and freight
- Fuel costs are 30 to 80 cents more expensive than the market average in the most constrained regions
- Diesel appears to be in short supply as the winter in the northern hemisphere sets in, which will raise fuel costs and confound policymakers who are concentrating on oil to control energy inflation, said Goldman Sachs in a note
- The bank added that underinvestment in the country's fuel-making capacity, which is being aggravated by refinery closures and disruptions, is leading to a shortage of refined products, particularly diesel, whose supplies are at “unprecedentedly low levels”