- Oil rose by 1.5% on Wednesday after reports of an escalation in the Russia-Ukraine war
- Putin ordered a partial mobilization to hold onto the occupied territory in Ukraine
- This escalation could cause further disruption to energy supplies
- The heightened tension comes before the Federal Reserve makes a decision on monetary policy later on Wednesday
- Analysts estimate the Fed to raise the interest rates by at least 75 basis points to tame inflation
- Putin declared a "partial mobilization" to maintain control of the occupied regions in Ukraine and called up 300,000 reservists to battle during a televised national address today (BBG, Reuters)
- Putin also reiterated his threat to use nuclear weapons, warning that “those who are trying to blackmail us with nuclear weapons should know that the wind patterns can also turn in their direction”
- The military buildup comes after a Ukrainian counteroffensive over the past two weeks dealt Russian troops their worst defeats since the start of the war and retook over 10% of the territory that Russia had held
- China began drawing down its crude oil reserves, which may be an indication that refineries are preparing to increase fuel exports as part of the government's initiatives to bolster the economy (BBG)
- Onshore crude inventories were at 909 MMBbl as of September 15, the lowest level since May 12, according to Emma Li, an analyst with Vortexa
- She added that around 1 MMBbl/d had been drawn from inventories over the past three weeks
- The drop in inventories may be seasonal, but it may also be a sign that refiners are increasing run rates in anticipation of producing and exporting more fuels
- Refiners and traders have applied for an extra 15 million tons (3.063) of export quotas, which, if approved, would raise allocations so far this year to a level similar to that seen in 2021
- BP’s Husky Toledo oil refinery in Oregon, Ohio, has been shut in after a fire occurred yesterday (Reuters)
- The refinery has a capacity of nearly 0.160 MMBbl/d
- On a daily basis, the refinery can produce 3.8 million gallons of gasoline, 1.3 million gallons of diesel fuel, and 600,000 gallons of jet fuel, according to the company’s fact sheet on the facility
- Workers finished a maintenance turnaround at the facility in recent weeks, and the plant had resumed operating, according to a source