It Biden’s way or the highway! Forget all that malarkey about working with allies, forget them. It’s America first or maybe Biden first. A meeting with our G7 allies failed to get President Biden to extend the deadline to rescue Americans and allies from the G7 and Afghanistan because he made the decision without their input and because he fears that his actions could lead to a terror attack if he does not adhere to the deadline the Taliban set. Joe Biden says that after he decided to abandon Afghanistan without our allies’ input, he now says that he will “stand shoulder to shoulder” in future action over Afghanistan and the Taliban. Though it might be too late for that, he now says that risk of terror attacks was too great to the 5,800 American troops at Kabul’s airport beyond the end of the month. Yet it was the his chaotic withdrawal that created this situation.
Oil came roaring back! The crude oil market regained most of its losses after the big 7-day swoon. Demand expectations are rising as the covid scare in China is passing and its ports are reopening. There are expectations that pent up demand in China may offset demand losses in Japan, another covid hot spot. Argus Media reports, “China’s airlines are starting to resume some previously suspended flights in a short-term boost for domestic jet fuel demand, as some Chinese cities reduce the number of higher risks Covid-19 regions to medium or low risk.
Oil prices also did get support from the platform fire in the Gulf of Mexico. Today Bloomberg is reporting that Petroleos Mexicanos plans to resume full crude production by Monday after an offshore platform accident that cut the company’s output by a quarter. About 71,000 barrels a day has already restarted.
From the supply side, things are still supportive. MarketWatch reports that the American Petroleum Institute reported late Tuesday that US crude supplies fell by 1.6 million barrels for the week ended Aug. 20, according to sources. The API report also showed inventory declines of 985,000 barrels for gasoline and 245,000 barrels for distillate supplies. Crude stocks at the Cushing, Ok storage hub, meanwhile, edged down by 485,000 barrels for the week, sources said.
Inventory data from the Energy Information Administration will be released Wednesday. On average, the EIA is expected to show crude inventories down by 3.2 million barrels, according to a survey of analysts conducted by S&P Global Platts. The survey also calls for supply declines of 1.5 million barrels for gasoline, and 400,000 barrels for distillates. October West Texas Intermediate crude CLV21, +0.13% was at $67.67 barrel in electronic trading, after settling Tuesday at $67.54 on the New York Mercantile Exchange.
Peak gas demand? Maybe but it won’t happen without much higher gas prices. Reuters reports that t the fourth-largest U.S. refiner Phillips 66.N) on Tuesday said it has put the smaller of its two Louisiana refineries up for sale amid continued losses and an uncertain future for motor fuels. The company is holding talks with a potential buyer on the sale of its 255,600 barrel-per-day (bpd) Alliance refinery in Belle Chasse, Louisiana, according to two people familiar with the matter.
The identity of the potential buyer could not immediately be learned. U.S. refiners have closed or sold oil processing plants as the COVID-19 pandemic slashed demand for gasoline and jet fuel, generating losses for the industry. Top automakers are accelerating their shift to electric vehicles, signaling tougher times ahead.” My advice is to fill up your tank.”
The China re-opening should give oil a big demand boost. OPEC is going to more than likely delay its production increase at its meeting next week. Keep an eye on OPEC plus news. The bottom for oil should be in so buy breaks.
Natural gas is looking good. Late heat wave along with subpar production should give futures a boost.
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