Diesel Demand is High
February 4, 2022
WTI crude oil has been running into resistance at the $89 level for the last few days, and then yesterday, it broke through and ran higher. It went through $90 per barrel and settled above that level opening it up for the chance to test higher. That run higher continues as it opened higher in overnight trading as is currently up to $2.00 this morning at this writing at $92.29.
Goldman Sachs stated that while there was no upside to surprise in the OPEC+ increasing its output by 400,000 BPD, the decision was in line with their global oil supply-demand balance. Goldman Sachs forecast Brent crude surpassing $100 per barrel in the third quarter.
Demand for diesel is at its highest level for this time of year in at least three decades, with stockpiles on the US east coast at their lowest levels since April 2020.
Russia’s natural gas giant company Gazprom signed a new deal to supply 10 billion cubic meters of natural gas to China.
The jobs number out this morning beat expectations as most were looking for growth of 125,000 and the jobs number was 467,000.
Crude oil, ULSD and RBOB NYMEX futures are all in extreme backwardation. This means the current front month price is higher than the next month out into the future. This is a sign of tight inventories as the current prices rally higher and higher trying to encourage products to come out of storage, producers, and refiners to make more and slow demand.