Energy Futures Saw A Big Pullback Overnight Turn Into Modest Gains This Morning

After a strong Monday session, energy futures saw a big pullback overnight turn into modest gains this morning. It’s been another wild ride for diesel prices, which have already seen a 24 cent price swing in the overnight session, as concerns over a systemic shortage of diesel globally keeps buyers engaged, while disagreements over European fuel sanctions seems to be giving some reason for prices to pull back after rallying 95 cents in the past week.

The overnight pullback may also have to do with reports that the US had sent patriot missile systems to Saudi Arabia to meet an “urgent request”. That delivery may serve to both protect energy infrastructure that’s been attacked by Houthi rebels, and to encourage the Saudi’s to play nice with the US and perhaps increase oil output where it can. 

Time for a do-over? The FERC seems to be re-considering the policy changes it published just a week before Russia invaded Ukraine that made the approval process for natural gas pipelines nearly impossible. A WSJ article from a former FERC counsel argues why the agency should take on a war-time stance to promote natural gas shipping, not hinder it.

The SEC has proposed new corporate disclosures that would require companies to report their direct carbon emissions, and estimate the indirect emissions from their operations, and estimate the risk of global warming on their operations. While the intent of this proposal is apparently to provide investors a gauge of the risk they’re investing in, it sounds like we’ll end up seeing more generic disclaimers in financial reports, like the forward Looking statements and other boiler plate risk disclosures included in most SEC filings already.

Is this why they’re moving to Texas? As retail gasoline prices in California approach $6/gallon, new attention is being put on the state’s LCFS and GHG programs that add 40-50 cents to each gallon of fuel.  Meanwhile, one of the dwindling number of refineries still operating in the state is now dealing with a worker strike. So far that doesn’t seem to be impacting local spot prices, which are easing after a huge spike last week as another refinery returns units from unplanned maintenance.

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