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Tidbits, Crude Oil, Fuel, Broilers & Ethanol, Markets & Rain Days Update 3/16/23

Highlights


Crude oil traded 80¢ to $1.22 higher most of Tuesday evening to about the start of the business day in Europe. Crude oil prices lost $6 before recovering almost $2 on the settlement. It traded lower than any time since early December of 2021 and is 50% of its price just 53 weeks ago.

The reason for the weakness in crude oil was the irrational fear of a world-wide bank failure as the troubled Credit Suisse Bank was once again in the spotlight when Saudi Arabia’s main bank said they cannot not buy any more shares of Credit Suisse because of regulatory constraints (they already own 10% of Credit Suisse). However, Swiss banking regulators pledged cash infusion for Credit Suisse after the flagship Swiss bank shares declined 30% on Wednesday.

Even though the Biden Administration said months ago it would begin buying crude oil to restock the nation’s Strategic Petroleum Reserve (SPR) when crude traded below $70, there was not a peep about the SPR even though crude traded to the mid-$65 range.

Yesterday’s Producer Price Index (PPI measures inflation at wholesale level) was down one-tenth of a percent in February. The market expected an increase of three-tenths of a percent. For the past 12 months, the inflation rate was 4.6%, the lowest 12-month inflation rate in two years and way below the 5.4% expected by the market.

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