Mens der hersker betydelig usikkerhed om olieprisen, rettede iransk-støttede Houthi-oprøre i weekenden et droneangreb mod saudiarabiske olieanlæg. Et distributionsanlæg samt et gasanlæg og et raffinaderi blev ramt. Da lagrene er meget små i Saudi-Arabien, kan angreb let føre til forsyningsproblemer. Sårbarheden har fået de olieimporterende lande til at forsøge at reducere olieforbruget. Det er ikke kun krigen i Ukraine, der har skabt frygt for olieforsyningen, men også covid-udbruddet i Kina samt vanskeligheder under atomforhandlingerne med Iran. Forsyningsproblemer kan også opstå i fødevareproduktionen, fordi krigen i Ukraine kan reducere den ukrainske kornpropduktion.
The Commodities Feed: Drone attack on Saudi Arabia
Energy
Despite a strong end to the week, Brent settled lower for the second consecutive week. The market is struggling to balance the impact of self-sanctioning of Russian oil and the potential demand hit we are seeing in China due to the latest Covid outbreak. On top of this, the market is still waiting to see how Iranian nuclear talks will play out.
If this wasn’t enough uncertainty for the market, over the weekend, Iranian backed Houthi rebels attacked multiple targets in Saudi Arabia with drones. These targets also included energy infrastructure. A fuel distribution terminal in Jizan was attacked on Saturday, which was followed by attacks on a natural gas plant and a refinery in Yanbu on Sunday.
As a result, the 400Mbbls/d Yanbu refinery has temporarily reduced production, but there will be no supply disruptions to customers, as inventory will be drawn down according to the Ministry of Energy. The product markets are already tight, particularly for middle distillates. Inventories in most regions are at multi-year lows, so the market will be sensitive to any potential supply disruptions on the product side.
Gasoil stocks in the ARA region fell by 34kt over the last week to just 1.6mt. Inventory levels have fallen by around 850kt over the last year and are at their lowest levels for this stage of the year since 2008. In Singapore, middle distillate stocks are similarly low, also flirting with levels that were last seen in 2008 at this point of the year. Tightness in the middle distillate market suggests that cracks will remain well supported in the months ahead.
Given the tightness in the oil market, along with plenty of uncertainty over Russian supply, the IEA at the end of last week released a 10-point plan to help reduce oil demand in order to ensure that we do not see a supply crunch. The IEA believes that if advanced economies fully implement the measures, oil demand could fall by 2.7MMbbls/d within a four-month period. Some of the measures include reducing speed limits on highways, working from home up to 3 days a week and introducing a car-free Sunday.
Agriculture
CBOT grains traded softer last week despite supply risks amid the ongoing Russia-Ukraine war. Speculative activity was relatively quiet over the last reporting week as the situation remains volatile and speculators opted to wait and see. Managed money net longs in CBOT wheat increased by 2,737 lots to 22,945 lots for the week ending 15th March. Speculative net longs in CBOT soybean declined by just 1,024 lots over the week to 170,690 lots, whilst they increased their net long in CBOT corn by a marginal 4,125 lots over the week to leave them with a net long of 372,909 lots.
The Ukrainian spring planting season is approaching and the market will watch progress closely. In the face of raw material shortages including fuel and fertilizers, combined with logistical issues, it could be extremely challenging for Ukrainian farmers to complete the planting season on schedule. More importantly, a prolonged conflict could substantially reduce planting acreage in the country which would weigh on output for the next season.
