Oil is standing still, beneath a darkened sky, gas is standing still, with the scenery flying by. Just standing still out of the corner of my eye, was that car passing me by just standing still.
Crude oil prices took a hit after the Energy Information Administration (EIA) reported gasoline and oil demand to seem to be standing still. Do those numbers matter when it is clear that Hurricane Delta heavily impacted the data?
We saw significant drops in refinery runs and oil productions, and with the weather being a significant factor, it kept many people at home. Still, there are real concerns about a second wave of the coronavirus.
The oil market may also have to worry about actions that may or may not be taken against Russia and Iran meddling in the U.S. election. The FBI said that Iran was responsible for an email campaign to intimidate Trump voters in swing states into voting for Vice President Biden. They promise punishment.
Iran favors a Biden President because President Trump has successfully isolated the country and clamped its sponsor of terror. Iran believes that a Biden Presidency will allow them to go back to business as usual, and they can resume their drive to get a nuclear weapon and their dreams of wiping Israel off of the face of the earth. Maybe Vice President Biden will give the more cash.
Reuters reported that:
“Democratic U.S. presidential hopeful Joe Biden’s promised return to diplomacy with OPEC-members Iran and Venezuela could cut a path for a return of their oil exports should he win, but not before many months at least of verifications, talks, and deal-making.”
What kind of deals? Should we be rewarding Iran for trying to hurt Trump? Maybe Hunter needs a new job. How would OPEC deal with more Iranian oil? Well, if Vice President Biden wants to hurt U.S. oil producers, lifting Iranian sanctions is one way to do it. President Trump, on the other hand, is keeping pressure on the Iranian regime.
Reuters says, “The timing of a potential resumption of shipments is crucial to world oil markets: U.S. President Donald Trump’s unilateral sanctions on the two countries since taking office in 2017 have blocked up to 3 million barrels per day (bpd), or 3% of world supply. Iran has taken the biggest hit, with exports shrinking by around 2 million bpd to approximately 500,000 bpd. The sanctions fit squarely with Trump’s energy dominance policy to boost oil exports from the United States, which in 2018 became the world’s largest producer of crude.
Russia working against Trump does not fit the narrative that Trump is a Russian agent. Someone should ask Congressman Adam Bennett Schiff if this is some double-secret Russian plan to pretend to help Biden, knowing full well they would get caught and thereby help Trump.
Still, demand fears are the issue. Even in a trading range as supplies globally tighten, slowing demand is a concern.
Bloomberg reports that, “Traffic congestion and actual vehicle counting station data signal fewer cars in the U.K. and continental European cities and inter-urban roads as more local lockdowns are imposed. The recovery to 95% of normal seen in late Aug-early Sep has fallen back now 85-90%. Reuters reports that gasoline supplied to the domestic market has fallen over the last two weeks, interrupting the previous recovery. It was -9% below the five-year seasonal average last week, down from -4% two weeks earlier.
If you missed the EIA, here it is. The EIA says that, “U.S. crude oil refinery inputs averaged 13.0 million barrels per day during the week ending October 16, 2020, which was 0.6 million barrels per day less than the previous week’s average. Refineries operated at 72.9% of their operable capacity last week. Gasoline production decreased last week, averaging 8.9 million barrels per day. Distillate fuel production decreased last week, averaging 4.1 million barrels per day. U.S. crude oil imports averaged 5.1 million barrels per day last week, down by 167,000 barrels per day from the previous week.
Over the past four weeks, crude oil imports averaged about 5.3 million barrels per day, 13.8% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 509,000 barrels per day, and distillate fuel imports averaged 152,000 barrels per day. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.0 million barrels from the previous week.
At 488.1 million barrels, U.S. crude oil inventories are about 10% above the five year average for this time of year. Total motor gasoline inventories increased by 1.9 million barrels last week and are about 2% above the five-year the standard for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories decreased by 3.8 million barrels last week and are about 19% above the five year average for this time of year. Propane/propylene inventories fell by 1.6 million barrels last week and are about 11% above the five-year average for this time of year. Total commercial petroleum inventories decreased by 7.2 million barrels last week.
Total products supplied over the last four-week period averaged 18.3 million barrels a day, down by 12.9% from the same period the previous year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, down by 8.7% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, down by 7.0% from the same period last year. Jet fuel product supplied was down 45.9% compared with the same four-week period last year.