Chinese announced retaliatory tariffs to go into effect on Sept. 1 and Fed Chair Powell disappointed...
U.S.-Iran Dispute Heats Up; Energy Risk Rises with Demand
06/24/2019 12:26 pm EST
U.S. Government will target Iran with more sanctions, says Phil Flynn.
The U.S. government says it will hit Iran with more sanctions. Secretary of State Mike Pompeo said that the U.S. will announce “significant” sanctions on Iran. Get ready to pay more for pistachios.
This comes as Iran lashes out promising to shut down more U.S. drones, an event that almost led to a U.S. air strike. Bloomberg news reports that “State-backed Iranian hackers have stepped up cyber-attacks on the United States according to the Department of Homeland Security’s Cyber Agency. There has been a “recent rise in malicious cyber activity directed at U.S. industries and government agencies by Iranian regime actors and proxies,” Christopher Krebs, the director of the Cybersecurity and Infrastructure Security Agency, said Saturday in a statement.
Oil prices are on the rise as demand is strong and risk is high. We expect to see big draws this week. Three million barrels down on crude, gasoline down two million barrels and distillates down two million barrels. Not only is demand near records it will get better with low rates. Farmers are working hard still planting and we should get support for geopolitical issues. While we are getting a bit overbought after last week’s run, we like the long side.
In the meantime, U.S. oil demand is on fire and the East Coast may have some gas price fallout after the Philadelphia Energy Solutions fire. Reuters reports that “The alkylation unit involved in a massive fire on Friday at Philadelphia Energy Solutions Inc. oil refinery has been completely destroyed, which will hamper the supply of gasoline from the U.S. East Coast’s largest refinery, sources familiar with the matter said on Sunday.
The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day refining complex, could force the 200,000 barrel-per-day Girard Point section of the two-section complex to remain shut for an extended period. Even when the Girard Point section restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday.
Natural gas is trying to bottom but still faces weaker than normal power generation demand.
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