Biden Asks About Reopening Shuttered Refineries
May 31, 2022
The number of oil rigs in the US was down by two in last week’s Baker Hughes oil rig count update. Total oil rigs are at 574 rigs and last year at this time rigs were at 359.
Bloomberg reported that more than 1 million bpd of the country’s (US) oil refining capacity – or about 5% overall – has been shut since the beginning of the pandemic. Elsewhere in the world, capacity has shrunk by 2.13 million additional barrels per day, energy consultancy Turner, Mason & Co. estimates.
President Biden has received a lot of push back by many for saying that the pain at the pump is all part of the incredible transition in America. The push back has been enough that the Biden Administration is considering reopening some refineries as Bloomberg reported that the administration has reached out to the oil industry to inquire about restarting shuttered refineries. This will not be an easy task and the market will have to see how this story develops moving forward.
The market is up big this morning as the news of the European Union’s plan to pursue a partial ban on Russian oil as part of the sixth package of sanctions. The market has been trading in a range and needed some news to move it out of that range. This news of a partial embargo has the market up and we will have to see how today progresses. The next step will be to get more of the details and then watch to see if the plan can actually be executed.
Crude oil inventories are 14% below the five-year average. Gasoline inventories are 8% below the five- year average and distillates are 21% below the five-year average.