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Blue Lacy Advisors, LLC – Final January Oil and Products Commentary

Minneapolis, MN | February 1, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC


Crude Oil


Russia has so far been able to offload exports. January loadings to-date have averaged ~4.7mm bpd, in line with the six and 12-month averages and matching January 2022. Europe as a destination has fallen in prominence, claiming about half as much of that flow as it did in January 2022, but still importing ~1.5mm bpd. Asian buyers, namely China and India, have directly benefited from this realignment. Combined Russian flows into these two major demand centers have approached 2.5mm bpd in each of the previous two months, more than twice the levels observed during 1Q22. At the same time, refiners in these countries have ramped production of clean products and associated exports. As a result, they’ve exported nearly 3mm bpd of clean products, up from ~2mm bpd during the 1Q. (More on product realignment below.) These shifts are one reason why regional spreads have been useful market indicators. The model’s component analysis has consistently identified these as drivers of price changes, agreeing with the fundamentals we can observe.


*This summary is based off January 22, 2023


A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


 

Meet the Author!


Phone: +1-832-413-3124


Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.


He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.


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