Oil Prices Continue To Climbs Despite Resistance

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OilPrice.com 25 June, 2021 - 02:00pm 44 views

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

Biden supports Line 3. The Biden administration supported the contentious Line 3 pipeline in Minnesota in a court filling. 

Amazon buys up renewable energy. Amazon said it would purchase 1.5 GW of renewables from 14 different solar and wind projects. Amazon is the largest corporate purchaser of renewables worldwide. 

U.S. LNG grows costlier. Even as U.S. LNG exports have expanded, supplying liquefied natural gas to the growing Asian market has become more expensive for US producers this year, a Rystad Energy report reveals. Rystad Energy estimates that the short-run marginal cost (SRMC) of US LNG exports to the Asian market has risen to about $5.60 per MMBtu as of June 2021, up 65% from $3.4 per MMBtu in mid-2020 and 30% higher than last year’s average of $4.30 per MMBtu.

Venezuela’s Descent Into Anarchy Is Fueling Maduro’s Desperation. After more than 15 years of U.S. sanctions which caused Venezuela’s one mighty petroleum industry to collapse, the crisis-driven Latin American state now appears on the verge of failure.

Chevron won’t cut oil and gas production. Unlike European supermajors, U.S. Chevron doesn’t have any plans to reduce its oil and gas business to invest in solar or wind power, chief financial officer Pierre Breber said at a Reuters conference on Thursday.

BP to stick with oil and gas for decades. BP will continue producing oil and gas for decades to come and will benefit from rising oil prices even as it reduces output as part of its shift to low-carbon energy, Chief Executive Bernard Looney told Reuters on Tuesday.

Japan restarts nuclear reactor. Japan restarted the first nuclear reactor in more than three years, restarting a unit that has been offline for a decade. Only 10 of Japan’s 33 operable nuclear units have resumed operations under the regulatory regime created in the wake of the Fukushima nuclear disaster.

Court shoots down FERC permit for pipeline. A rare rebuke of FERC occurred in federal court this week. The court nixed a permit for a gas pipeline, saying that that the pipeline company did not show that its project was needed, and FERC should have scrutinized it more. The decision could have broader implications for pipeline permitting.

Uncertainty looms for Canada’s oil sands. Just one of Canada’s five biggest oil companies, Suncor Energy has a plan to cut emissions. Reuters looks at the tough road ahead for Canada’s oil sands.

Indian utility goes big on renewables. India’s largest power generator, NTPC Ltd., doubled its long-term commitment to renewables, promising to build 60 GW by 2032, up from a 32 GW goal it announced last year. 

Judge closes case against Dakota Access, for now. A U.S. district court closed a long-running case against the Dakota Access oil pipeline on Tuesday, but allowed for Native American tribes and other opponents of the line to file additional actions against it, according to Reuters.

Honda goes all-in on electric. Honda Motor Co. has become the first of Japan’s automakers to state publicly it will phase out sales of gasoline-powered cars completely, setting 2040 as the goal

400% increase in fracking crews. Even a more than 400% jump in the number of fracking crews working the U.S. shale patch isn’t enough to send oil output soaring, according to Bloomberg

Gas infrastructure in Europe leaking methane. The potent greenhouse gas methane is spewing out of natural gas infrastructure across the European Union because of leaks and venting, video footage made available to Reuters shows.

Army Corps to review Line 5. The U.S. Army Corps of Engineers said Wednesday it would conduct an extensive review of Enbridge Energy's plan to build an oil pipeline tunnel beneath a Great Lakes channel in Michigan, which could significantly delay the project.

Gas inventories down, global gas prices rising. A rebound in demand for gas and LNG is pushing up prices, just as heat waves hit parts of North America and Europe. Now there is a danger of not enough supply to go around. Prices are up sharply in Europe, resulting in more coal burned. 

EU to tighten carbon market. The EU is set to remove some allowances in its carbon market in an effort to slash emissions. The decision is still in flux and will be part of a suite of new policies to be revealed in mid-July, but the move could raise the cost of carbon, pushing out coal and imposing higher costs on gas. 

Oil companies see shortfall by 2023. A new Dallas Fed survey finds that three out of four oil and gas industry executives see a global supply shortfall by 2023.

Refiners win at Supreme Court. Oil refiners won a major court case at the Supreme Court regarding federal biofuels blending requirements. The court said that the EPA has broad authority to issue waivers to refiners.

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

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Oil Price Rises Further On Tight Supply Outlook, Eyes On OPEC+

TVC News Nigeria 25 June, 2021 - 07:10pm

19 U.S. Oil & Gas Pipelines Moving To Completion This Year | OilPrice.com

OilPrice.com 25 June, 2021 - 05:30pm

Charles is a writer for Oilprice.com

Two pipelines have already been completed so far in 2021, while 17 projects are either in the construction stage or announced, according to the latest data in EIA’s Liquids Pipeline Projects Database.

Last year, the U.S. saw a total of 24 petroleum liquids pipeline projects completed, including 11 crude oil projects, 12 HGL projects, and 1 petroleum product project. In 2020, a total of 11 projects were new pipelines, and another 11 projects were expansions of existing systems, the EIA data showed.

The record year for petroleum liquids pipelines was 2014, when as many as 35 projects were completed, followed by 30 projects completed in 2019, according to the EIA data.

More natural gas pipelines have entered into service in recent months to carry gas from the Permian basin to Mexico, boosting U.S. gas exports to America’s neighbor to the south and reducing the wide discount at which gas is traded at the Waha Hub in Texas, the EIA said earlier this month.

The increased gas pipeline takeaway capacity raised the gas prices at the Waha Hub and narrowed the discount of the gas price in West Texas to the U.S. benchmark at Henry Hub.

In the years before the 2020 crisis, prices at the Waha Hub even flipped to negative at times amid pipeline constraints and occasional issues at compressor stations.  

Charles is a writer for Oilprice.com

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Oil climbs to highest since 2018 on demand growth, OPEC+ caution

Al Jazeera English 25 June, 2021 - 03:10pm

Global benchmark Brent futures rose 62 cents, or 0.8 percent, to settle at $76.18 a barrel, while United States West Texas Intermediate (WTI) crude rose 75 cents, or 1.0 percent, to $74.05.

Those were the highest closes for both benchmarks since October 2018 and put both contracts up over 3 percent for the week.

“Crude prices rallied on an improving demand outlook and over expectations the market will remain tight as OPEC+ is likely to only deliver a small boost to output at the July 1st ministerial meeting,” said Edward Moya, senior market analyst at OANDA.

All eyes are on the Organization of the Petroleum Exporting Countries, Russia and allies – together called OPEC+, and due to meet on July 1 to discuss further easing of their output cuts from August.

“The producer group has ample space to boost supply without derailing the drawdown in oil stocks, given the rosier demand outlook,” said Stephen Brennock of oil broker PVM.

On the demand side, the key factors OPEC+ will have to consider are strong growth in the US, Europe and China, bolstered by coronavirus vaccine roll-outs and economies reopening, according to analysts who said this was countered by rising COVID-19 cases and outbreaks in other places.

The prospect of sanctions on Iran being lifted and more of its oil hitting the market anytime soon has dimmed, with a US official saying serious differences remain over a range of issues over Tehran’s compliance with the 2015 nuclear deal.

The lack of an interim agreement between the United Nations nuclear watchdog and Iran on the monitoring of atomic activities is a serious concern that has been communicated to Tehran, US Secretary of State Antony Blinken said on Friday.

Iran has not responded to the UN nuclear watchdog on extending a monitoring agreement that expired overnight, the agency said on Friday, hours after Washington warned that not prolonging it would harm efforts to revive the 2015 Iran nuclear deal.

“If an Iran agreement is not reached by July 1, we anticipate OPEC+ returning to month-by-month quota setting and announcing a modest production increase for August at its meetings next week,” analysts at ClearView Energy Partners LLC said in a report.

Meanwhile, the number of US oil rigs, an early indicator of future output, fell by one to 372 this week, according to energy services firm Baker Hughes Co. Despite that small decline, the rig count gained 13 in June – its 10th monthly rise – and increased 48 in the second quarter, its third consecutive quarterly rise.

We round up the numbers from the week’s key economic stories to keep you in the know. 

President Nayib Bukele offered $30 worth of Bitcoin to any citizen who signs up for a digital wallet.

Investors bullish about a quick recovery in global oil demand even as concerns ease over the return of Iranian crude.

CEOs, speaking at the Qatar Economic Forum, said lack of investment will curtail future crude supplies.

Oil & Gas Execs Are Struggling To Attract Investors And Blaming Clean Energy For Their Woes

CleanTechnica 25 June, 2021 - 03:00pm

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The Federal Reserve Bank of Dallas has released its Q2 2021 Energy Survey, and one thing is clear: oil and gas companies are struggling to find investors. The new report included special questions about expectations for a global crude oil gap, current and expected investments in renewables by oil and gas firms, and more. Oil and gas executives who responded to the survey noted that this sector “continued to grow strongly” in Q2 2021. However, two comments stood out.

“We have relationships with approximately 400 institutional investors and close relationships with 100. Approximately one is willing to give new capital to oil and gas investment. The story is the same for public companies and international exploration. This underinvestment coupled with steep shale declines will cause prices to rocket in the next two to three years. I don’t think anyone is really prepared for it, but U.S. producers cannot increase capital expenditures: the OPEC+ sword of Damocles still threatens another oil price collapse the instant that large publics announce capital expenditure increases.

“The inability to access credit from reserve-based lending is a current issue affecting our business.

“Our biggest fear is the administration’s executive actions. Inflation will cause higher oil prices. That will hurt demand over time. Dollar values will help domestic producers. Our foreign policy looks very weak. That may create issues that invite higher oil prices.”

These comments were from a survey of respondents whose identities were not mentioned in the report. Another comment mentioned that the Federal Reserve was leaning on banks to address climate change in their lending decisions — something that is not helpful to the oil and gas industry.

Another commenter referred to President Biden’s stance on clean energy as “the current mess in Washington,” and noted that this added an “unacceptable and adolescent level of challenge to strategic planning.” They claimed that the economy is dependent on the oil and gas industry to provide the energy to fuel it.

One executive stated that they have been monitoring potential changes to the tax code that could negatively impact the industry. They noted that they are “especially concerned about the elimination of intangible drilling cost deductions and flow-through entity taxation.”

Another oil and gas executive was so upset with President Biden that their company will not hire employees or contribute to economic growth. In essence, they are punishing the American people and themselves because they are upset with the current administration. The exec said that they were getting increasingly uncomfortable with what is being “forced” on American businesses — especially the oil and gas industry.

“With the environmental, social, and governance ‘green’ stuff — and now the federal government using the Treasury Department, the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, and others to essentially ‘wage war’ against a legitimate and legal American industry — I’m pulling back on all investments in all businesses. I am beginning to take all of my chips off the table and sit this out as I do not like what I see Washington doing and planning on doing more of against the free-enterprise system.

“Rather than growing my businesses and hiring, I will not be hiring during this administration and will just maintain. I will not be investing in any industry during the rest of this administration. We’ll be spectators and start enjoying time that otherwise would have been put into growing our portion of the American economy.”

Another executive claimed that the Biden administration has not been a friend to the petroleum industry. Another one said that his company is barely hanging on, also noting that they own a Ford F-350 and a 28-foot flatbed trailer. They’ve only had one call since January and most companies are demanding more insurance. He’s applied for loans but hasn’t had any luck.

Honestly, my heart goes out to the smaller businesses that are struggling, but I’ve said this time and again. They need to find a way to evolve. This means considering renewables and creating a business that incorporates clean energy into its models.

One thing is clear: the oil and gas industry has noticed that clean energy is in high demand and it is terrified. Expect a rise in disinformation campaigns and lobbying over the coming months.

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Oil prices are rising at a historic pace, and they are likely to get even higher and more volatile

CNBC 25 June, 2021 - 11:58am

Oil prices have doubled since last fall, and they are expected to continue to move higher in a volatile and unusually bullish period for the commodity.

While there are some calls for $100 oil, not all industry analysts agree the crude price per barrel will soon reach that milestone or stay there for long if it does. But they do agree there is more than one wildcard that makes calculating the future price very difficult.

Those unknown factors include the fate of U.S. oil producers, how "OPEC+" uses production controls and how demand recovers in places hard hit by the pandemic, like India.

The market is currently experiencing a surge in demand but production is not running at the same pace, and inventories are falling.

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Oil: Saudi Minister Hopes To Keep Producers, Consumers Happy At These Prices | Investing.com

Investing.com 25 June, 2021 - 06:21am

When Saudi Oil Minister Abdulaziz bin Salman holds a Zoom call next week for the sixth time this year with his peers from 22 countries, he’ll probably not be thinking of new schemes to get the market higher, but rather about how to stop the group before him from pumping more crude than they ought to at these prices.

It can, of course, be argued that this is a daily job for AbS, as the minister is also referred to at times, by his initials. 

Since he came to office a little less than two years ago, each AbS-chaired meeting of the 13-member OPEC, or Organization of the Petroleum Exporting Countries, and its 10 allies led by Russia—who come together as OPEC+— began with calls for significantly higher production quotas. He deftly shot each one down, reminding the output hawks in the group that there’s something else more important: the price of oil itself. And, of course, demand and market share.

As a result of AbS’ efforts, OPEC+ compliance to Saudi-led production cuts has reached an unbelievable 122% since the COVID demand destruction that took US crude to minus $40 per barrel in April 2020.

I say unbelievable, because anyone who has tracked OPEC for a decent portion of its 60 years will know of its legacy of cheating, where output quotas are concerned. And while the Russians only started working earnestly with the cartel five years ago, they’ve become the new villain of the piece (as far as the Saudis are concerned) for over-production within the enlarged OPEC+. Russian Oil Minister and Deputy Prime Minister Alexander Novak habitually pushes AbS to the edge on quotas at each OPEC+ meeting, before walking away with a deal that appears to work to Moscow’s advantage more than Riyadh’s. 

In fact, the 2020 oil market collapse was precipitated by the very-public-and-ugly breakdown in output talks between the Saudis and Russians, just before the onset of the pandemic. The lion’s share of OPEC+ cuts since has been shouldered by Riyadh, though AbS deserves credit for handing out production limits to the other 22 in the coalition and ensuring that they stick to them.

But with each passing month of oil market recovery, the Saudi minister’s challenge to get the Russians—as well as legacy cheaters in OPEC such as Iraq and Nigeria—to respect the quotas he draws has only increased. And the reason, ironically, is the same price of oil that AbS once pointed to as the reason why deep cuts should continue. That price is now more than triple where it stood on Apr. 13, 2020, when OPEC+ first announced that it will withhold some 9.7 million barrels per day from the market.

At an average of $26 a barrel then—and a world practically swimming in oil, with no takers—it was easy to understand why OPEC+ nations bought so strongly into the production cuts. 

Now, at $73 a barrel for US crude and $75 for Brent, it’s also easy to understand why those same nations are itching to produce more, in order to add desperately needed revenue to their coffers starved by a year of pandemic distress.

More than anyone else, AbS understands this. The Saudi coffers would also benefit from more production at these prices. But the minister is also aware of  the risk of turning on OPEC+ taps more than necessary now, especially in a world where COVID-19 vaccinations are severely imbalanced and where another variant of the virus, Delta, has begun raging.

This explains AbS’ mantra each time he was asked about oil demand over the past few months:

“I will believe it when I see it.” 

Yes, despite global inventories back at five-year seasonal trends; despite the market virtually draining all of the excess supply from the COVID-triggered glut; despite US drillers pumping 2 million barrels less per day now than before the pandemic; and despite a barrel trading three times higher today than 14 months ago, the Saudi minister is still not convinced about oil demand.

But AbS also knows the danger of allowing the price of oil to continue ripping the way it has since November, when breakthroughs for the first COVID vaccines were announced. 

At some point, ramping oil prices are going to hurt the global economy—if they haven’t already, judging by the persistent complaints of India, the third largest importer of crude, and the 7-year high in US pump prices of gasoline.  

Apparently taking heed of these, AbS said on Thursday:

“We have a role in taming and containing inflation, by making sure that this market doesn’t get out of hand.” 

Hence, AbS has a dual problem: He needs to raise production by just enough to placate OPEC+, who want to put out some extra barrels this summer, and he needs to cool the red-hot oil rally; yet he has to make sure that the hike he authorizes doesn’t weigh too heavily on the psyche of crude traders.

For the record, OPEC+ has said it was considering a 500,000 barrels per day hike in its August output, after agreeing to a 440,000-bpd increase in July. 

But nothing is certain until the group meets on July 1. It would not be surprising to hear Russia and some others demanding for as much 700,000-800,000 bpd more for August, given that OPEC+ is still withholding 5.8 million barrels daily from the market.

The Paris-based International Energy Agency, which looks after the interest of Western oil importing nations, has urged OPEC+ to start tapping its spare production capacity to bolster supply as demand rebounds. Wall Street trading behemoth Goldman Sachs estimates the oil market is running a deficit of 3 million barrels a day, and has predicted a Brent price of $80 before July—a prophecy that looks likely to happen. Not to be outdone, Bank of America has forecast $100 a barrel.

All these combine to make AbS’ production maneuvers a high-wire balancing act that gets increasingly dangerous with each OPEC+ meeting, says Tariq Zahir, who runs the oil-centric Tyche Capital Advisors fund in New York.

“People are talking about $100 oil, thinking that’s what the Saudis want. They could not be more wrong. AbS doesn’t want $100 oil. He’s probably very happy with the current price. What he’s worried about is keeping OPEC+ together at these prices, instead of letting everyone out to produce crazily like before.”

Zahir also reminds us that once the summer consumption of oil is over, there’ll be a seasonal slowdown that will affect all travel, including flights.

"There’s also a chance of the Delta variant of the virus screwing up the global recovery in coming months, and the likelihood of Iran getting a nuclear deal in the fourth quarter. None of these is friendly to oil demand.”

Disclaimer: Barani Krishnan uses a range of views outside his own to bring diversity to his analysis of any market. For neutrality, he sometimes presents contrarian views and market variables. He does not hold a position in the commodities and securities he writes about. 

When I recommended a long position in natural gas two months back, many readers were annoyed to go long at $2.614. Some of them even posted abusive comments which I had to take on...

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WTI reaching for $75 suppy zone

FXStreet 24 June, 2021 - 06:16pm

Oil prices have been elevated into the end of the week and WTI ended up some 0.1% at $73.23 in the New York session.

Spot travelled from a low of $72.35 to a high of $73.58, close to its highest levels in almost three years where the price consolidates in Asia so far, at $73.25.

A drawdown in US inventories and accelerating German economic activity has underpinned the black gold for a fifth consecutive day of higher closes.

 In futures markets, both Brent and WTI contracts benchmarks hit their highest since October 2018.  

Meanwhile, in data overnight, Germany showed the largest upward leap in retail conditions since German reunification more than three decades ago, not far below the 2017 record high, stoking expectations European fuel demand will recover. 

Germany’s June IFO Index reaffirmed the message from the PMI data that the economy is growing strongly at present. Overall, the business climate sub-index rose to 101.8 vs 99.2, the current assessment rose to 99.6 vs 95.7 and expectations firmed to 104 vs 102.9.

Meanwhile, data in the EIA US crude inventories dropped to their lowest since March 2020 while US gasoline stocks also posted a surprise draw.

There are also doubts about the future of the 2015 Iran nuclear deal that could end US sanctions on Iranian crude exports. 

Looking forward to next week, OPEC+ is faced with some pressing issues as it reviews its production agreement in a meeting that traders will be highly attentive to. 

''The market is calling out for more crude oil, while others are concerned about the inflationary impact of higher prices. India expressed 'deep concern' over spiralling energy prices, with Oil Minister, Dharmendra Pradhan, calling on OPEC Secretary General, Mohammad Barkindo, to revive halted production,'' analysts at ANZ Bank explained. 

''Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said earlier this week that he maintains a cautious approach but doesn’t rule out action.''

The weekly charts shows that the price is on the verge of breaking into supply territory. 

A correction back to test prior highs could well be the first port of call, however, where it meets a 50% Fibo retracement. 

The daily chart shows that the price is steadily approaching the target still with the price closing above the prior day’s close once again. 

The focus is on the upside for the forthcoming sessions following a significant retracement to the prior resistance structure that has proved to be a solid support structure in 72.50.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

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EUR/USD is consolidating as traders wait for the market to make the first move. Below the weekly 10 and 21 EMAs, EUR/USD is trading in a bearish weekly territory as it retests a dynamic counter-trendline resistance.

GBP/USD bears are seeking a break from 4-hour resistance structure. A downside extension targets a 1.3725 area and beyond. The bears could well start to engage at this juncture with the price meeting the 21-EMA.

EUR/USD is consolidating as traders wait for the market to make the first move. Below the weekly 10 and 21 EMAs, EUR/USD is trading in a bearish weekly territory as it retests a dynamic counter-trendline resistance.

Shiba Inu price did test the May 19 low again earlier this week but did rebound before testing the June 11 low, establishing the low point of a potential inverse head-and-shoulders pattern. 

Overall goods orders rise, April's total revised higher. Business spending slips, inhibited by product and material shortages. Manufacturing output scarcity, restrictions contribute to inflation.

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The Energy Report: No More Glut | Investing.com

Investing.com 24 June, 2021 - 01:05pm

Do you remember the oil glut? Oh, sure you do. The COVID-inspired oil glut that many people said was so large that we would never see it fully disappear. Just one year later, supplies of oil are falling at the fastest pace they have since the pre-COVID-19 days.

Now there are concerns that there will not be enough oil around to meet growing demand. The under investment in fossil fuels is starting to rear its ugly head as demand is mounting a comeback faster than supplies can keep up. We are seeing production fall as there is not enough new drilling to offset the decline rate from existing wells.

Those concerns were magnified when the Energy Information Administration (EIA) released their weekly report that showed U.S. crude oil inventories fell by 7.6 million barrels last week.

That drawdown in crude inventory was the 5th in a row and would have been larger if it weren’t for 1.7 million barrels released from the US Strategic Petroleum Reserve. Currently, at this rate, U.S. oil inventories are falling at a pace that exceeds over 1,000,000 barrels a day. That pace is likely to continue, further cutting into the U.S. oil supplies that are already 6% below average for this time of year.

There is also a lot of concern about the dramatic decreases that we’ve seen in the Cushing, OK storage hub. If you remember at the height of the COVID-19 supply glut, there were fears that the Cushing storage hub would be unable to store crude as its storage was tapped out. Now there is a concern on the other side of the equation that supply is falling so fast that the hub could fall below their minimum operating levels by the end of next month.

U.S. energy production fell last week to 11.1 million barrels a day which means we are going to be more dependent on oil imports from other countries. U.S. crude oil imports last week averaged 6.9 million barrels a day and that was up 197 thousand barrels from the previous week. We expect that U.S. oil imports are going to have to rise to meet growing demand.

The EIA reported a big jump in U.S. gasoline demand as it hit 9.440 million barrels a day last week, that was up big from the week before. Gasoline demand is up 14.1% from the same period  a year ago. The uptick in demand helped crude oil inventories fall by 2.9 million barrels last week and gasoline supplies overall are just 1% below the five year average for this time of year.

Gasoline imports in the aftermath of the Colonial Pipeline hack have been solid. Last week the U.S. imported 840,000 barrels of gasoline a day but that was down from the week before where imports were over a million barrels a day.

Distillate fuel inventories did increase by 1.8 million barrels last week and believe it or not are still 4% below the five year average for this time of year. Demand for all distillates are on the rise yet fuel demand hit 3.9 million barrels a day which is up 18.9% from the same period a year ago. Jet fuel demand was up 97.5% compared to a year ago which shows very clearly that air travel is rebounding.

Despite all this bullish news, the market did restrain its enthusiasm a bit as it appears that OPEC plus is laying the groundwork for a 500,000 barrel a day increase. While the market may see this as bearish, it actually could be bullish because 500,000 barrels a day isn’t going to be enough to meet demand. OPEC plus plans to meet July 1 just ahead of the U.S. 4th of July holiday.

As far as price action for the oil market, we expect to be in a situation where we could see a really strong rally as we head into the 4th of July holiday and it is only 10 days away.

There is a lot of times where we can see a rally into the 4th of July, and we can hit a seasonal peak and prices will cool off a bit. So, while we expect a continued strong move upward into next week, we are concerned that we may see a correction closer to the holiday. Yet before we get to that correction, we should see oil prices trade sharply higher than they are today.

Reuters is reporting that Russian oil prices from the Volga river region for domestic market supply in July have reached a record high, rising by around 11% from the previous month thanks to stronger oil prices on global markets, Reuters monitoring showed on Thursday. 

Traders said oil for July delivery at the regional metering points jumped to between 36,700-37,100 rubles ($507.60-$513.10) per ton, up from 32,900-33,600 rubles a month earlier. At the same time, crude oil inventory in America’s largest storage hub could fall to historically low levels by the end of September as the demand rebound continues to outpace production.

Natural gas is placed to continue its strong bowl trend as demand is strong both domestically and overseas. Today we get the Energy Information Administration report and we expect to see a smaller than normal injection into supply for this time of year.

Look to buy brakes on natural gas going into the 4th of July holiday. We normally see a drop in demand and that could cause some natural gas prices to sell off, but if we do get a 4th of July sell-off, we would look at that as a great opportunity to put on some hedges as we expect the market to tighten even further as we get into late summer.

Storage levels going into winter are going to be below the five-year average and that, of course, means that our heating bills next winter are, more than likely, going to be more expensive.

Hey, who are we kidding. Gasoline’s going to be more expensive, diesel’s going to be more expensive, your heating bills are going to be more expensive, energy is going to be more expensive.

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