August 19, 2022

Await New Oil Buyers

The (U.S. Department of Energy’s Energy Information Administration) Weekly Petroleum Status Report showed an enormous increase. In commercial petroleum inventory of 19 million barrels vs. a forecast calling for 11 million. Refinery utilization also fell to 69 percent, A level not seen in quite a while – possibly as a mixture of lower gasoline demand and seasonal turnaround. And, U.S. boring for the week ending April 10 was only right down to 12.7 million barrels per day (bpd), indicating that U.S. Producers haven’t yet crop on current supply despite historically low prices.

Andrew Goldstein, President, Atlas Commodities LLC

Andrew Goldstein, President, Atlas Commodities LLC: WTI petroleum is down 20 percent week-to-date. Which might are expected had OPEC not agreed to a 9.7 million-bpd production cut. OPEC hoped that the cut, which was prescribed earlier in the week. Would have given spot prices a lift . However, the continued lack of demand thanks to COVID-19 has played a way larger role in spot pricing. As we glance out one year on the curve, prices are closer to the $35 level.

Steve Blair, Senior account representative. RCG Division of Marex Spectron: there have been several non-surprises within the market over the last week or two – beginning with the assembly cut agreement between global producers. Which cut a record amount of crude out of the market but still not enough to offset the large decline in global demand. OPEC’s own monthly report indicates that a 20 million-bpd decline in global demand will occur in April. With the general demand decline expected to be 6.8 million bpd over the whole course of 2020. Despite these cuts the market is nonetheless continuing its specialise in the ever-dwindling storage picture because the over-production and lowering demand still move storage facilities to the max. OPEC’s report also indicates that tanker rates for crude transport rose 69 percent in March, also as seeing a rise in options purchased for floating storage.

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