Market Comments: Energies are trading mixed this morning.

AAA reported yet another record-breaker at the pump for both gasoline and diesel. AAA put the national average for regular unleaded gasoline at $4.955 and the national average for diesel at $5.719 per gallon.

After more than a year of pressure from the U.S. and other oil-consuming nations, OPEC+ finally agreed to accelerate oil supply increases last week to try and tame fuel prices and slow inflation. However, this could leave producers with minimal spare capacity and almost no room to compensate for a significant supply outage. Tight spare capacity is likely to keep oil prices volatile and sensitive to any disruptions in output, such as a big hit from a hurricane to Gulf of Mexico production during the Atlantic storm season or a further decline in exports from Russia. The most conservative estimates forecast OPEC's spare capacity dropping to below 1 million bpd later this year, representing about 1% of global demand and barely one-twentieth of U.S. demand.

Goldman Sachs increased its Brent Oil price forecasts by $10 to $135 a barrel between the second half of 2022 and the first half of next year, citing that a structural supply deficit was still unresolved. Analysts at the bank said that prices would need to rise to the forecast level for supply to normalize by late 2023.

In an update posted Tuesday, the Atlanta Fed's GDPNow tracker points to an annualized gain of just 0.9% for the second quarter. Following a 1.5% drop in the first three months of the year, the tracker shows the economy doesn't have much further to go before it slides into what many consider a recession. GDPNow follows economic data in real-time and uses it to project the way the economy is heading. Tuesday's data, combined with other releases, resulted in the model downgrading what had been an estimate of 1.3% growth as of June 1 to the new outlook for a 0.9% gain.

Russia is ramping up oil exports from its major eastern port of Kozmino by about a fifth, aiming to meet surging demand from Asian buyers and offset the impact of European Union sanctions. The EU announced its embargo last week on Russian oil, saying it would stop importing 90% of oil and products from Russia by the end of the year.

During the first four months of 2022, the U.S. exported 74% of its LNG to Europe, compared with an annual average of 34% last year, according to the EIA. Asia had been the primary destination for U.S. LNG exports, accounting for almost half of the total exports. Since December 2021, the EU and the United Kingdom have been importing record levels of LNG, mainly because of low natural gas storage inventories. Higher sport prices for natural gas at the European trading hubs incentivized global LNG market participants to deliver more LNG supplies to Europe. Additional LNG imports in Europe and a mild winter offset lower natural gas pipeline imports from Russia.

LyondellBasell Industries plans to shut its Houston oil refinery by the end of next year, but they could close it sooner if an equipment failure hits its major units. In April, the chemical maker said it would cease operating the 263,776 bpd refinery by the end of 2023, exiting motor fuel production, citing the cost of needed overhauls.

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