Dispatches from the Grapevine: AFPM Shenanigans, Economic Musings, and Oil Market Contemplations
Greetings from Grapevine, TX…..it was great to see the gaggle of midstream and downstream aficionados running around and getting lost like chickens with no heads at the Gaylord hotel. It was great to mix it up with the bent elbows as they not so humbly and endlessly wassailed about their refining and trading accomplishments of 2023. Kudos to the unsung heroes who planned and executed the well attended receptions where long time business buddies hugged and kissed and made new friends. Not to be outdone, The Tank Tiger threw an epic pre-AFPM bash at the Kirby Ice House in Houston last Thursday with industry folks swinging from the rafters and rapping storage chants all while doing The Tank Tiger roar (see picture below). There is nary a doubt that contango must be around the corner. If you willed it, it will come. Our team was delighted to have been in the midst of it. We’re wrapping up our AFPM meetings now, but we will be back Houston for a couple of weeks and then on to San Antonio for IPC AFPM at the end of the month. If you’re also going or around town, let us know and we’ll connect with you.
Last week’s February employment report was a little conflicted. New payrolls beat forecasts but there was an increase in the jobless rate and a decline of wage growth. Now Wall Street eggheads are betting that the first interest rate cut will be in June – just in time for Mass Appreciation Day! As Phil McCarthy would say – Holy Sheet! So now we keep an eye out for today’s consumer price report to determine if we are mired in inflation or if it is escalator down and disinflation. At the end of the day, Chairman Powell was emphatic in his testimony that there was no evidence the economy was falling into a recession. Heh heh cool.
Not willing to leave well enough alone, once again it was time for Congress to kick the sleeping dog as they are now calling on the FTC to investigate the recently established mega deals in the oil patch. In a letter penned by Congress to the FTC, they exclaimed “It is now even clearer that there is an anticompetitive pattern developing as Big Oil corporations race to consolidate the Permian Basin and other key American oil fields, and the FTC must take this pattern into account as it assesses each individual transaction.” Not a lot different from asking a middle schooler to clean their room. Brent futures for May delivery settled at $82.21 a barrel while WTI ended yesterday at $77.93 a barrel. Be mindful of the fact that U.S. crude stockpiles have risen for six weeks in a row perhaps due to low refining rates…or maybe…just maybe…contango…like the groundhog…is teeing up for a late spring resurrection.
