Stimulus, Weak Dollar, & Increased Travel Support Energy Markets
March 11, 2021
The DOE report had crude stocks up 13.798 million barrels with Cushing, Ok crude stocks up 526,000 barrels. Gasoline stocks were down 11.869 million barrels and distillate stocks were down 5.504 million barrels. Crude oil stocks are well above the 3-year average high, gasoline stocks are well below the 3-year average low and distillates are just above the 3-year average high. Refinery runs were at 69% of capacity which was up from 56% last week but still at a very low level.
The energy markets continue to be supported by the stimulus, a weaker dollar, big draws to gasoline and diesel stocks, and more demand as Covid-19 restriction easy up.
There are signs of increased mobility, which is increasing fuel consumption. TomTom data showed that there was a 60% week-on-week increase in a measure of London congestion to the most since mid-December. Road fuel sales were still down 29% below a year ago nationwide in late February as the U.K. comes out of lockdown. Demand has recovered quicker in the U.S., where gasoline consumption was down only 11% on the year. Trucking activity has increased in the U.S, in the last week of February, with the number of miles traveled on interstate highway 10% higher than the equivalent week of 2019.
Propane stocks were down 47,000 barrels with Midwest showing a build of 236,000 barrels and the Gulf Coast a draw of 106,000 barrels. Total stocks are now at 41.199 million barrels compared to last year when stocks were 61.529 million barrels.
The $1.9 trillion stimulus has some worried that it will overcook the economy but for now the hope for the bill passage today is prompting buying. The release of the CPI data helps calm the inflations fears.