US Lifts Travel Restrictions on 33 Countries
November 10, 2021
The API report had crude down 2.485 million barrels, Cushing crude stocks up 234,000, gasoline down 552,000 and distillates up 573,000. The Bloomberg estimates for today’s DOE inventory report are for crude to be up 1.6, gasoline down 1.2 and distillates down 1.1.
The US lifted travel restrictions on 33 foreign countries which should be an immediate boost to jet fuel demand.
The EIA in their Short Term Energy Outlook did report that they expect gasoline prices to decline over the next several months. This is crucial because the Biden Administration is using the STEO to determine whether or not to release crude from the Strategic Petroleum Reserve. This report will buy President Biden time to wait and say he is looking for these bearish influences to take place without having to take any action now. This report from the EIA helped to offer support to price yesterday.
Global oil spare production capacity could diminish next year as air passengers return to the skies, removing an important cushion that the market is currently enjoying, Saudi Aramco Chief Executive Amin Nasser said.
Vitol’s CEO, Russell Hardy, said world destocking commodities is the biggest feature of 2021. He said the market is still in a tight situation and will remain reasonably tight for the next 12 months.
Goldman Sachs reiterated its prediction of a commodities super cycle driven by a recovery from the COVID-19 pandemic and stimulus measures which will increase demand. Jeffrey Currie, Goldman Sachs global head of commodities research, said “we expect a structural bull market in commodities, very similar to what we saw in the 2000s or the 1970s”.
Phillips 66 said it would convert its 225,600 bpd Alliance refinery in Belle Chase, Louisiana, to an oil terminal, after a short-lived attempt to sell the hurricane-damaged facility. Three other US Gulf Coast refineries have been offered for sale this year. The planned conversion would bring to six the total number to have stopped processing oil or that have closed during the COVID-19 pandemic. According to Reuters, US refining capacity is about 17.9 million bpd, down about 5.8% since 2019 from closures.
The average estimates for today’s propane inventory update is for there to be a draw of 770,000 barrels. There are a wide range of estimates from a draw of 3 million to a build of 880,000.