The Blockage Of The Suez Canal Could Spell Trouble For The Global Economy

Some reports suggest that it might take until Sunday to finally reopen the Suez Canal
The EIA reported that U.S. crude oil refinery inputs jumped to an average of 14.4 million barrels per day
By late spring, bullish catalysts await natural gas

Anna Carpenter
Thu, 03/25/2021 – 13:42

Phil Flynn

Publication Date

The Energy Report

The Phil Flynn Energy Report 

Clogged Artery

The Suez Canal is still clogged up, cutting off circulation to the global oil market. The MV Ever Given container ship is still stuck, blocking the waterway: anywhere from 165 to 185 vessels are waiting to resume trips to their destinations. The longer it takes, the bigger the hit we may see to the global economy.

Bloomberg News reports: 

A back-of-the-envelope calculation shows there’s about $9.6 billion worth of daily marine traffic halted by the massive container vessel that lodged in the Suez Canal earlier this week, blocking transit in both directions. The figure is based on an assessment by Lloyd’s List that suggests westbound traffic is worth around $5.1 billion a day and eastbound traffic approximately $4.5 billion. The industry journal concedes that these are “rough calculations,” however. About 185 vessels are waiting to transit the waterway, data compiled by Bloomberg show, while Lloyd’s estimated 165.

Now some reports suggest that it might take until Sunday to finally reopen the canal— that’s when the tide rises. Oil traders bought on the news of clogged arteries, but many know that if that’s the only reason for buying, it’ll have a limited shelf life.

Already, new oil shipments will look at alternative routes and the canal at some point will reopen. Still, oil recovery was substantial, and it was also helped by strong record-breaking German manufacturing data and some bullish leading oil indicators in yesterday’s Energy Information Administration (EIA) weekly petroleum status report.

The EIA reported that U.S. crude oil refinery inputs jumped to an average of 14.4 million barrels per day (bpd). That was an impressive 1.0 million bpd more than the previous week’s average. We saw a big jump in runs as refineries operated at 81.6% of their operable capacity last week. Still, gasoline production decreased averaging 8.6 million bpd. Refiners have work to do. Distillate fuel production increased last week, averaging 4.6 million bpd. Bottom line, we should see crude draws going forward as refiners continue to increase runs and US imports fall.

Overall, the tally showed crude oil inventories increased by 1.9 million barrels from the “clogged artery” the previous week. At 502.7 million barrels, U.S. crude oil inventories are about 6% above the 5-year average for this time of year. Total motor gasoline inventories increased by 0.2 million barrels last week and are about 3% below the 5-year, the average for this time of year. 

Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 3.8 million barrels last week and are about 1% above the 5-year average for this time of year.

Today we also get the EIA natural gas report. The report may determine whether we have hit a bottom in the market. Andrew Weissman of EBW Analytics says that natural gas futures have managed to stave off further declines after closing just above $2.48/MMBtu twice last week. But continued weak, weather-driven demand and narrowing storage deficits may yet prove overpowering.

Much milder-than-normal weather forecasts may weigh on natural gas into mid-April, erasing most of the storage deficit vs. the 5-year average. Today’s Weekly Storage Report carries increased heft following 3 straight bearish reports and concerns over extended industrial demand outages. A supportive number could lend confidence in stronger fundamental footing for natural gas.

By late spring, bullish catalysts await natural gas: planned local distribution company injections, elevated LNG feed gas demand, weak natural gas production, higher chances for bullish weather, stronger industrial demand, seasonally greater power burn, and a likely economic boom. Futures will likely establish a firm bottom in the next 30-45 days and begin moving higher by early summer.

Reuters reports that U.S. utilities likely pulled a smaller-than-usual 25 billion cubic feet (bcf) of natural gas from storage last week even though temperatures were in line with normal, a Reuters poll showed on Wednesday. That will likely be the last withdrawal of the 2020-2021 winter heating season and compares with a decline in inventories of 26 bcf during the same week a year ago and a 5-year (2016-2020) average withdrawal of 51 bcf. 

Utilities withdrew 11 bcf of gas from storage in the prior week ended March 12. If analysts are on target, the draw during the week ended March 19 would take stockpiles down to 1.757 trillion cubic feet (tcf), 3.7% lower than the 5-year average and 12.5% below the same week a year ago.

Don’t miss out on my wildly popular trade levels on all major markets, as well as special subscriber-only updates. Call me at 888-264-5665 or email me at

Market Analysis

Hurricane season
Tropical storms
WTI crude oil
natural gas
Brent crude
Brent crude futures
WTI futures
renewable energy


Leave your vote

🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.

As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.