OPIS Insights

Barron’s Senior Energy Writer Laura Sanicola and OPIS Chief Oil Analyst Denton Cinquegrana discuss what’s ahead for oil this week.

Watch this week’s episode for insights into news coming out of NY Climate Week as well as what’s driving oil prices right now.

Transcript:

LAURA SANICOLA: Hi, everyone. I’m Laura Sanicola, author of Barron’s Energy Insider, and I’m here today with Denton Cinquecgana, chief oil analyst at OPIS. Denton, thanks for joining me.

DENTON CINQUEGRANA: Hi, Laura. How are you today?

SANICOLA: Good. Thanks. So, I’m very jealous here in New York for the Climate Week activity. And if you could just give us a sense of some of the conversations that you’ve picked up on. I know that The Wall Street Journal, part of the News Corp family, had several events that featured forecasting for oil, gas, and energy writ large.

CINQUEGRANA: Yeah. And, again, some of the stuff that we were hearing about again, not a surprise, but AI and the sheer amount of power that we’re gonna need to, for lack of better term, power AI. But everything seemed to be a lot more grounded in reality, whether that was the automobile industry and drive trains. And you’re not just gonna go to battery electric vehicles overnight.

You know, internal combustion engines are gonna be around for a long, long time. And, you know, now there’s a realization that the hybridization of the engine is kind of that next logical step. So that’s why I think you’ve seen a lot more of that kind of discussion that, you know, you just don’t go from internal combustion to battery electric overnight. So I think reality has set in for a little bit here, particularly along the auto supply chains.

SANICOLA: And, speaking of which, oil has picked up a little bit of steam, not too much. We’re still relatively range bound, but on the higher end, what’s driving oil prices?

CINQUEGRANA: Yeah. We’re at the kind of upper end of this range that we’ve kind of been in for the last couple of months, whether that’s WTI at about 65 dollars and Brent at about 68 or so, 68, 69. Really, it’s a lot of geopolitical tensions. It’s the Russia factor. That’s kind of been the bigger factor here because all the drone strikes from Ukraine, they’ve just become too many to ignore. These have been going on for quite some time, but, it’s starting to to pick up the pace. It’s starting to have a real impact. Russia has recently announced a kind of a moratorium on exports of refined products.

That should actually offer US refiners a bit of an opportunity. They could fill in some gaps with diesel, which some European countries import quite a bit of Russian diesel. It could be an opportunity for the US refiner to up diesel exports to places other than Latin America and South America where a lot of those exports go. So there might be some opportunities moving to Europe, and the most recent Energy Information Administration data did point to some strong distillate exports. So I would suspect that’s gonna continue.

SANICOLA: Alright. Well, thanks for the recap, and thanks everyone for joining. We’ll see you next week.

CINQUEGRANA: Thanks, Laura.