Southwest Airlines is Canceling 40% of its Flights
April 1, 2020
The inventory report put out by the private firm API yesterday late afternoon called crude oil stocks up 10.5 million barrels as refineries cut run rates as demand has plummeted. Gasoline stock were up 6.1 million barrels and distillate stocks were down 4.5 million barrels.
Average estimated for today’s DOE inventory report as surveyed by Bloomberg is calling for crude oil stocks to be up 3.832 million barrels. Gasoline stocks are estimated to be up 1.115 million barrels and distillates up 238,000 barrels. Refinery runs are called down 1.3%.
Officials at the International Monetary Fund said some countries’ banking systems might have to be recapitalized or even restructured if their economies are severely damaged by prolonged disruption from the coronavirus outbreak.
Royal Dutch Shell slowed refining output and will write down up to $800 million in the first quarter of 2020 after a fall in oil demand due to the coronavirus. Shell said it expects “significant uncertainty” over oil and gas prices and demand as a result of falling consumption.
US officials are putting aside the idea to join an alliance with Saudi Arabia for now. President Trump said that he had good conversation with both Vladimir Putin and Mohammad bin Salman about support for oil prices. At this time a production cut for the US will not be put in place.
The US will put out offers to lease space in the Strategic Petroleum Reserve after the idea of just purchasing barrels was shut down due to a lake of funding after the big stimulus package for coronavirus relief. It is being reported that 77 million barrels of space could be leased.
Southwest is canceling 1,700 flights a day or more than 40% of US flights starting May 3rd through June 5th.
S&P Global Platts Analytics estimates road travel may be down 50% in “at risk” areas along the US East Coast, with nationwide gasoline demand being off 25% last week.
Bloomberg has reported that Plains All American Pipeline, one of the top US shippers, reportedly has asked producers to voluntarily scale back on their crude outputs because storage is rapidly being filled and supplies could overwhelm capacity.
The average estimates for today’s inventory update report on propane is calling for a 570,000 barrel decline to supplies.