Tag: Crude

Consumer Demand and Refinery Run Recovery

COVID-19’s impact on the aviation industry has been significant, but the decrease in demand for jet fuel is a only drop in the crude oil bucket. With the media focusing so much of their attention on jet fuel decimation, market participants are associating this fact to the overall global demand picture. Until the media’s portrayal of oversupply in processed aviation fuels is corrected, the negative demand outlook for the oil industry as a whole cannot be fixed.

Crude Drawdowns and Price Disconnects

As crude oil demand was decimated at the start of the global coronavirus pandemic, storage around the world began to rapidly fill causing commodity prices to tank. The supply and demand imbalance was corrected when producers came together to make global production cuts thus stabilizing prices. When economies began to restart and consumers began to leave their homes, demand started to climb to outpace supply. As storage levels began to fall, prices remained constant but when there was a tiny inventory build at the beginning of September, prices went into a freefall highlighting the growing disconnect between free market principles of supply and demand and emotion driving the actual price of crude oil. Instead of following commodity principles, pricing has become largely influenced by market sentiment.

The Incoming Glut: Excessive Levels of Heavy Crude Supply in a Saturated Market

The worst of the coronavirus induced oil crash seems to have bottomed out as storage inventories saw fairly dramatic drawdowns in the final weeks of May, a reversal of events from the past several months. Such relief may be all but eliminated in the ensuing week as an influx of nearly fifty million barrels of foreign crude oil is about to reach the U.S. Gulf and West coasts. The volume of incoming crude may offset most of the production cuts generated by domestic operators and extend low oil prices until the inventories can be worked back down.

The Assault on the Petro-Dollar – Additional Information

President & CEO of RARE PETRO, Anthony D. McDaniels, sat down with Kathryn Mills of The Crude Audacity Podcast to discuss the assault on the PetroDollar LIVE on Facebook and YouTube. It was an energetic discussion on today’s Global Oil Market and what it means for the strength of the American Oilfield, American Energy Security, and American Global Influence. While their conversation was lively, it was not quite long enough to dive deep into the complex intricacies fueling this Oil War. Check out our analysis below!

Natural Gas Rebound Poised for Recovery Before Crude Oil: Why the Market has Priced Electricity and Liquid Fuel Demand into Commodity Prices

The dual black swan events of the COVID-19 pandemic and oil price war have created a unique analytical opportunity within petroleum products as the strip price for natural gas is showing larger percentage increases than crude or NGLs because the market is pricing in the assumption that continued electricity demand will not fall as quickly as the oversupply of natural gas.