Start of Hurricane Season Less Active Than Expected
August 30, 2022
Crude oil prices rallied more than 4% yesterday supported by recent civil unrest in Libya’s capital city causing concerns that crude oil output could fall significantly. Also supporting crude prices is the idea that OPEC+ will cut production if an Iran nuclear deal gets done.
According to the Department of Energy crude inventories in the US emergency reserve fell by 3.1 million barrels in the week ending August 26th. Stocks in the SPR fell to the lowest level since December 1984. The 3.1 million barrel draw was the smallest draw since the end of April.
The current hurricane season has started with less activity than normal but there are currently 3 tropical disturbances in the Atlantic and we are entering the most active time of hurricane season from August 20th through October 20th.
Cheniere Energy, the biggest US exported of liquified natural gas, wants to expand its complex on the Texas coast to take advantage of surging demand for American gas around the world.
The head of the IEA, Fatih Birol, said nations that are members of the IEA could release more oil from strategic petroleum reserve if they find it necessary when the current scheme expires.
France is accusing Russia of using its natural gas as a weapon of war as Russia’s state-owned natural gas company cuts supply to France. Russia says the pipeline is being shut down Wednesday through Friday for maintenance. Europe is desperately trying to fill its natural gas storage for the winter, and this is pushing up prices.