Crude Pricing Rises As China Reopens Borders to Travelers
January 16, 2023
There is no forward contracting available today as the energy markets are closed.
Crude oil prices were up 1.5% on Friday and up roughly 8% on the week. The rally in prices was mainly driven by the fall in consumer price index (CPI) from last month which in turn pushed the US dollar index lower and crude prices higher. The continued idea that China’s reopening of its borders to travelers and lifting their Covid-19 restrictions is expected to increase China’s oil demand in 2023.
The Beaumont Exxon Mobil refinery is expected to increase gasoline, diesel, and jet fuel production by 250,000 bpd once an expansion is completed. The new Beaumont crude distillation unit will make up for lost US refinery capacity later this year when Lyondell Basell Industries shuts a 263,776 bpd refinery. Since the pandemic, 6 crude oil refineries have closed down greatly reducing capacity.
US oil rigs increased by 5 to a total of 623 this past week the largest build since November. Last year at this time there were 492 oil rigs online.
The Federal Reserve Bank of Philadelphia President, Patrick Harker, said he sees mixed conditions in the year ahead.
From Bloomberg. European traders are rushing to fill tanks with Russian diesel as the clock runs down on a February 5th European ban expected to tighten supplies, re-draw global shipping routes and increase price volatility.