August 28th, 2020
The key points from the video transcript are as follows:
- The recent increase in demand brings the US oil production in line with 2018 levels, but the average for 2023 is still expected to be below 15 million barrels per day.
- The demand is expected to continue increasing due to additional flows and seasonal factors like Juneteenth and July 4th.
- However, the support from the distillate side is expected to be underwhelming, keeping the average closer to 15 million barrels per day.
- Distillate inventories have seen a small build, but are still trending higher than last year.
- Diesel demand and gas oil demand are low, leading to more product being stored and pressure on exports.
- Refiners are expected to increase operations, but the question remains about differentials and shipping prices.
- Fuel inventories in Pad 1 are just above 2022 levels, with issues related to the Colonial pipeline impacting the East Coast.
- Pad 3 inventories are elevated, and as exports slow, the pressure on the distillate crack is expected to increase.
- Overall, demand is slightly above the five-year average, but it is expected to be below the five-year average and underwhelming.
- FedEx is shutting down more aircraft due to shrinking demand, which is not only affecting the aviation industry but also the ground transportation sector.
- The current situation is seen as more cyclical rather than solely attributed to COVID-19.
#energyindustry #oilproduction #demandtrends #distillate #fuelinventories #exports #refiningoperations #transportationindustry #COVID19impact
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