Weekly Energy Prices Update

With the war in Iran re-intensifying, I have returned to preparing a weekly energy update.

Crude

Brent is heading back towards $100 USD per barrel in the front month futures market.

The forward curves suggest the market believes there is a reasonable probability that the war will be resolved relatively quickly (perhaps a few months) and then the supply of crude will be normalised. 

Natural Gas

The natural gas front month futures have risen more steeply than crude, and now sit close to their highs during this conflict. The forward curves suggest the pressure point is anticipating the northern winter.

Interestingly, Urea (a fertiliser made from natural gas) has not risen to the same extent. Perhaps because we are getting close to the end of the Northern growing season. 

Finished product

The mid level distillates (diesel and jet fuel) are under greater pressure than gasoline/petrol. 

Again, the forward curves appear optimistic that the current strife will be resolved over the next few months.

The cracks are not blowing out to the same extent they did in April. This suggests the bigger immediate fear is the supply of crude rather than the global supply of finished product (especially petrol/gasoline). 

Terminal gate prices in Australia

Prices in Australia appear to be rising inline with the finished product prices out of Singapore.