Refineries Still Yet to Recover from Texas Freeze
March 15, 2021
The market continues to hang around as it appears to have lost its momentum. One of the biggest factors giving crude oil a pause is the reports that Iran’s crude oil production is making into the market. As of right now, most traders are looking at this a just a temporary pause, or if there is more downside a near-term correction in a market still in an uptrend. RBOB futures are dragging the rest of the energy complex along with it. Stocks are low and the outlook for demand continues to be robust giving futures its upside push. Oil prices did fall last week for the first time in two months.
Baker Hughes reports that crude oil rigs were down 1 to a total of 309, down 374 from the same week last year.
US crude oil inventories are 6% above the five-year average for this time of year. Gasoline inventories are 6% below the five-year average for this time of year and distillates are 4% below the five-year average for this time of year. Refineries are running at 69.0% a much-reduced amount from 84.9% prior to the Texas freeze.
JP Morgan analysts said sustained higher oil prices are expected to spur higher US oil output this year. The bank now forecasts US crude oil production to average 11.78 million bpd in December 2021, up 710,000 bpd year-on-year. The bank projects US tight oil (shale) to average 11.36 million bpd in 2021, compared with 11.32 million bpd last year.