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Following the price rally seen last week, oil prices have retreated to slightly lower levels, below $70 (Brent) and $64 (WTI). The main drivers of this correction have been the build-up in US oil inventories for a second consecutive week by 13.8 million barrels w/w, which is attributed to the continued closure of many refineries on the Gulf coast. The outages continue even this week as refineries on the gulf coast continue to operate below their full capacity. Refineries on the gulf coast are currently 2.59 million bpd below their processing levels a year ago, the hardest affected among refineries elsewhere in the US. Furthermore, total crude input to refineries is 3.39 million bpd below its levels a year ago which was attributed not only to the COVID-19 pandemic but also to the oil freeze seen in Texas last month. For instance, we can see that gasoline and diesel inventories declined by 11.9 million barrels w/w and 5.5 million barrels w/w , respectively. Currently, US commercial oil inventories are 46.6 million above their levels before the pandemic. Furthermore, US production rose by 900,000 bpd w/w to stand at 10.90 million bpd. Prices were also affected by the concerns of […]
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