Fuel Inventories Build as Viral Cases Grow
December 9, 2020
The API inventory update had crude oil stocks up 1.14 million barrels and the average estimate for today’s DOE update from the Reuters survey are calling for a decline of 1.42 million barrels. The crude oil stocks at Cushing, Ok were down 1.8 million barrels.
Gasoline stocks as reported by the API were up 6.44 million barrels and the estimates for today’s DOE number is for stocks to be up 2.27 million barrels. Distillates were up 2.32 million barrels and the estimate for today are for them to increase 1.41 million barrels. Builds across the board is a bearish report but traders will wait to see how this morning’s DOE numbers come out. Inventory builds on top of the latest round of rising cases of COVID-19 and more restrictions in California, Germany, South Korea, and New York should add some selling pressure to prices but the market so far continues to look at vaccine news and a better economic picture in the future and lean bullish.
Markets are trading a bit higher in early trading as the White House has entered into the stimulus talks adding to optimism that a deal gets done.
Iraq is working to sign a multibillion dollar contract with a Chinese oil company ZhenHua Oil Co., a bailout from Beijing for the cash-strapped government which will receive the first year’s payment upfront in exchange for long term oil supplies.
According to a report in Reuters, US oil field services sector lost 91,680 jobs due to pandemic-related oil demand destruction, according to a monthly report compile and published by trade group Petroleum Equipment & Services Association (PESA) on Tuesday.
The EIA’s Short Term Energy Outlook projects US petroleum demand to fall by 2.38 million bpd to 18.16 million bpd in 2020 but increase by 1.63 million bpd to 19.79 million bpd in 2021. Gasoline demand is expected to fall by 1.22 million bpd to 8.09 million bpd in 2020 but increase by 670,000 bpd to 8.76 million bpd in2021. Distillate demand is expected to fall by 310,000 bpd to 3.79 million bpd in 2020 but increase by 200,000 bpd to 3.99 million bpd in 2021. US oil production in 2020 is estimated to fall by 90,000 bpd to 11.34 million bpd and by 240,000 to 11.1 million bpd in 2021.