European Lockdowns Stifle Recovery Outlook
March 24, 2021
The American Petroleum Institute report had crude oil stocks up 2.9 million barrels and the estimates for today’s DOE report are for a decline of 300,00 barrels from the Reuters’ survey. Gasoline stocks on the API were down 3.7 million barrels and the estimates for today are for a build of 1.2 million barrels. Distillates inventories were called up 246,000 barrels by the API and the estimates are for them to be down 100,000 barrels.
If gasoline stocks in today’s report show a decline it should offer some support to prices, but a build is expected. With more people getting vaccines and another round of stimulus there are several sources reporting strong gasoline demand and if that is the case stocks at some point should decline.
The lockdowns in Europe has been a big negative to the demand recovery outlook and was the main cause of the recent pullback. Europe accounts for about 15% of global consumption and some are looking for it to take another hit with this next wave of coronavirus cases that some think could impact summer travel.
The dollar trading higher and the Euro under pressure as more restrictions begin in Europe has also pressured energy prices.
A large container ship the Evergreen has run aground in the Suez Canal, blocking most of the traffic. Reports indicated that 10 ships or 13 million barrels were backed up on this blockage and could impact refineries if the situation drags on. To reroute ships, it is estimated to add 15 days to get to Europe. Some reports are saying normal traffic could be resumed today or tomorrow.
Estimates for the propane inventory report today is for there to be a draw of 627,000 barrels. The five years average for this reporting week is a draw of 187,000 barrels.