US Heating Oil Prices Up 65% YoY
November 18, 2022
According to the EIA, US heating oil prices were 65% higher this October than they were in October of last year. Residential heating oil prices increased to an annual high of $5.90 per gallon on November 7th, because of tight inventories, low imports, and limited production capacity.
John Hess, CEO of Hess Corporation spoke to investors recently and warned US shale growth is slowing. He said Hess is looking for growth in Guyana, where an Exxon Mobil Corp-led consortium is growing production from 1.2 million bpd to 3.6 million bpd by 2027. He said that OPEC is back in the driver’s seat as the top swing producers amid slow US shale growth. He said, US shale oil output is slowing due to investor pressure to focus on returns over growth, inflation and inventory depletion.
The Biden administration has asked Congress for $500 million to modernize the US Strategic Petroleum reserve. If approved by Congress the request issued by the White House on Tuesday, provides the Department of energy with funding to improve the four SPR sites along the Texas and Louisiana coast.
A State Department official said the US government plans to issue guidance in coming days on a Russian oil price cap taking effect on December 5th and is ready for some “hiccups” in its implementation.
WTI crude oil futures have flipped into a contango for the first time since December 2021. This means that front month December WTI is less expensive than the second month January WTI. The market is still worried about a recession and lower demand. COVID cases in China are making fresh highs worrying traders about demand from China and potential of an economic slowdown. WTI crude oil over the last ten trading session has gone from a high of $93.74 to a low so far today of $79.53. Over these ten days roughly 14 dollars has come out of crude oil prices. Most traders are calling this decline long liquation as the funds worry about the economy and demand.