Fed Chair Calls Economic Crisis “worst of our lifetime”
July 30th, 2020
Crude oil prices were higher yesterday as the biggest weekly decline in stocks this year was reported by the DOE. Crude stock were down 10.61 million barrels putting total stocks at 525.97 million barrels. Cushing stocks were up 1.309 million barrels and as stocks here have increase in the last few weeks the market has shifted attention elsewhere. Production was unchanged at 11.100 million bpd. Gasoline stocks were up 65,000 barrels putting total stocks at 247.39 million barrels. Distillate supplies were up 50,000 barrels putting total stocks at 178.39 million barrels. Demand for gas was at 9.25 million bpd up 22,000 bpd on the week. Distillate demand was up 20,000 bpd to a total of 4.859 million bpd.
Propane inventories were up 2.016 million barrels putting total stocks at 84.404 million barrels. The stocks of propane in the Midwest were up 962,000 barrels putting Midwest stocks at 21.962 million barrels 2.078 million barrels less than last year at this time. Gulf Coast stocks were up 849,000 barrels putting total Gulf stocks at 49.529 million barrels 6.461 million more barrels than last year at this time. Propane production remains solid up 118,000 barrels to a total of 2.332 million bpd.
The Fed made no changes and at chairman Powell’s press conference he again stressed that the Fed has no plans to raise rate for a long time. Chairman Powell also called the current economic crisis the “worst of our lifetime”.
Today we get another round of jobless claims and the survey by Bloomberg is for initial jobless claims to be around 1.4 million and continuing claims are estimated to remain over 16 million. Also, from Bloomberg the estimates for the first look at second-quarter GDP, which is forecast to plunge an annualized 34.5%, the most on record going back to the 1940s. Claim have been releases now this morning and they were 1.434 million and continuing claims were 17.018 million. The second quarter GDP was down 32.9%.
As oil major report earnings, most have taken big write downs on assets indicating that they have a weak outlook for oil and gas prices. Royal Dutch Shell took a write down of $17 billion and Total showed a $8 billion write down.
From the EIA: U.S. petroleum consumption fell from 20.1 million barrels per day (b/d) in April 2019 to 14.7 million b/d in April 2020, a 27% decrease and the lowest monthly petroleum consumption in the United States since May 1983. Stay-at-home orders and other travel limitations caused petroleum product supplied (a proxy for consumption) for fuels such as motor gasoline and jet fuel to fall to their lowest levels in decades.