War in Eastern Europe continues to impact global energy markets:
WTI futures jumped 7% yesterday to close above $110/bbl, the highest price in over a decade. Brent settled the day at $112.93/bbl, up 7.6%.
European gas futures surged to a new all-time high Wednesday before easing slightly. U.S. natural gas futures rose to a four-week high:
Energy futures fell in mid-day trading today, with WTI down 0.6% at $109.90/bbl, Brent down 0.2% at $112.70/bbl and U.S. natural gas 1.6% lower at $4.69/MMBtu.
Despite the dramatic rise in oil prices, OPEC+ decided on Wednesday to stick with a modest 400,000-bpd monthly output increase for April.
Wintershall Dea, a backer of the failed Nord Stream 2 gas pipeline from Russia to Germany, will write down its investment in the pipeline and refuse to pursue new energy ventures in Russia.
International commodities trader Trafigura, one of the largest traders in Russian oil, halted all investments in the nation and indicated it may pull out of current projects.
U.S. crude stocks dropped 2.6 million barrels last week, driving key storage hubs to multi-year lows. Meanwhile, the nation’s strategic reserves fell to the lowest level since 2002, even before the White House unveiled a plan to release 30 million barrels to help cool prices.
Chicago futures for ultra-low sulfur diesel spiked nearly 22 cents to $3.15/gallon yesterday, the largest single-day rise in 14 years.
U.S. drillers are struggling with a fracking sand shortage as they try to scale up crude output.
Marathon is taking steps to convert a refinery in Martinez, California, into a renewable diesel facility with 2.1 million tons of production capacity by 2023.
Supply Chain
The logistics fallout from the Russia-Ukraine crisis continues to spread:
Air and seaborne cargo rates between Europe and Asia are rising sharply. The EU and U.S. are considering blocking all Russian ships from entering their ports.
Japanese automakers pulled out of Russia in a wave on Wednesday, with Toyota and possibly Mitsubishi halting production and sales in the country; Honda suspending exports; and Mazda ending car part sales. Autos and auto parts made up more than half of Japan’s exports to Russia in 2020.
Farmers across the globe will see higher fertilizer prices due to lost production from Russia, a major supplier. Prices for staples such as corn and wheat are surging.
The average refrigerated spot trucking rate hit a record $3.59 per mile in January, up 12 cents from December and almost a full dollar from the same time last year.
The price of aluminum rose to an all-time high of $3,552 per tonne Wednesday. Steel prices are also on the rise.
Colorado’s Ball, the world’s largest manufacturer of aluminum cans, is dropping smaller customers as it struggles to fill orders from large brewers.
Per-mile insurance premiums for U.S. trucking companies are up 47% the past decade, industry experts say.
About 3,000 workers at Canadian Pacific Railway voted for a plan to strike on March 16, if necessary, threatening the movement of commodities within the Canadian supply chain.
CMA CGM is testing the use of different biofuels on 32 of its vessels, with expectations that alternative fuels will account for 10% of its energy mix by next year.
Domestic Markets
The U.S. reported 52,355 new COVID-19 infections and 2,095 virus fatalities Wednesday. Total hospitalizations have fallen 70% over the past month, while healthcare staffing shortages remain high.
Starting next week, American households can order another round of free at-home COVID-19 tests supplied by the federal government. Free anti-viral pills will be available at pharmacies later this month.
COVID-19 vaccines tailored to specific strains could be developed, approved and mass-produced within 100 days, health officials say.
Payroll giant ADP said the U.S. added a larger-than-expected 475,000 jobs in February, one of the strongest readings since the early days of the pandemic.
New jobless claims in the U.S. fell for a second consecutive week for the week ending Feb. 26, dropping by 18,000 to a seasonally adjusted 215,000.
On Wednesday, Ford announced a major restructuring that will separate the electric-vehicle (“Ford Model E”) and combustion-engine (“Ford Blue”) sides of its business, as the automaker projects electric vehicles to account for one-third of global sales by 2026 and half of global sales by 2030.
Net sales at Nordstrom rose 23% last quarter, beating market expectations as demand grows for upscale goods.
ONE, an electric-vehicle startup based in Michigan, claims a new battery it developed can deliver more than 750 miles on a single charge.
Amazon-backed electric-vehicle startup Rivian raised its selling prices by 20% — including on existing pre-orders — citing inflation and higher component costs.
The Russia-Ukraine conflict could cut $1 trillion from global GDP and add about 3% to inflation this year, British economists say.
More than 1 million people have been displaced by the Russia-Ukraine conflict in less than a week.
Hong Kong reported over 55,000 new COVID-19 cases Wednesday, the latest in a string of daily records. Key services on the island, including transport and supermarket retail, are curtailing operations.
Yesterday, single-day COVID-19 cases in South Korea topped 200,000 for the first time during the pandemic.
China’s ultrastrict COVID-19 controls may not be eased until next spring, although some cities could see loosened restrictions starting this summer, new reports say. Economic consequences of the nation’s zero-COVID approach are growing, with services activity falling to a six-month low in February.
Italy saw 178,000 excess deaths since the start of the pandemic, suggesting official COVID-19 fatality counts are too low.
Skyrocketing energy prices pushed European inflation to 5.8% year over year in February, the fourth straight month of record highs.
Canada’s central bank raised its benchmark interest rate a quarter-percentage point to 0.5% yesterday, its first rate hike in over three years.
Stellantis unveiled plans for its first battery-electric Jeep vehicle and announced it will build a hydrogen-powered heavy pickup truck in the coming years.
Hyundai is ramping up its electric vehicle plans and will invest $16 billion to create 17 new all-electric models by 2030.
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