Hi to all,
Here’s what I have for this week’s price changes:
*Heating and stove oil to increase by 3.2 cents a litre.
* Diesel fuel to increase by 2.9 cents a litre, and...
*Gasoline to increase by 2.4 cents a litre.
Chinese demand almost back?
Word from China tonight where demand for oil has just about returned to pre-pandemic levels.
China imported close to 9.8 million barrels a day last month just as the pandemic alerts were being lifted in chief manufacturing areas like Wuhan.
In the meantime, China had put 13.1 million barrels a day through refineries to meet demand in April, just over what they did for the same time-period last year.
China consumed 13.7 million barrels a day in December, 2019.
US EIA inventory data
The latest crude oil inventory data is out, and the EIA is reporting a very slight draw on crude oil inventories, down by 700,000 barrels the last week.
Gasoline inventories dropped 3.5 million barrels, while distillates increased 3.5 million.
Refiner capacity was reported at 67.9 percent.
US domestic production was down to 11.6 million, down another 300,000 as lower oil shut down rigs and spigots were turned off at oil fields.
How long this recovery?
Interesting question, and I’d be a millionaire if I had that one figured out, but here’s where I would start.
With oil prices rising, the question has to be asked is how fast can the US domestic number increase with oil prices on the rise.
No secret that the US has dozens of small producers who ventured and probably weathered the drop in oil-at least to this point. With oil rising, there’s a strong likelihood that some of these small producers will quickly re-enter the production fields again in an attempt to recoup some losses, and perhaps put more crude back into the system.
It will be worth watching the rig count this week and next for the signs that producers are venturing back into the oil patch.
That brings with it another complication: While OPEC and non-OPEC nations may have agreed to production cuts, then how likely is it, when producers go back, that OPEC would likely stick to their end of the cuts?
It’s my guess we won’t have long to wait.
That’s it for this week.