I know I sound like a broken record but there is an ocean of oversuply of crude oil in this country and unless these traders plan on drinking it by the barrel, the price has to drop. Crude is down by $1.12/barrel to $58.36. Gasoline is down by 2.37 cents/gallon at the average rack in Selma. Diesel fuel dropped by 5.21 cents/gallon. Prices are:
Have a great day,
Here is a partial article from Bloomburg. It is saying what I have saying. There is no reason for crude to be rising. Tank inventories are filling up and the hidden inventory are drilled wells that have been drilled but are not pumping, as a backup kind of storage.
“Despite this perception of improving fundamentals, our updated supply and demand balance points to a still well oversupplied market in 2015,” Goldman analysts including Jeffrey Currie said in an e-mailed report dated May 11. “While low prices precipitated the market rebalancing, we view the recent rally as premature.”
The drop in oil prices since last summer is boosting the demand outlook, EIA Administrator Adam Sieminski said Tuesday. Global production will still be more than consumption in 2015 and 2016, the EIA said. That will increase inventories by 1.8 million barrels a day in the first half and 900,000 in the second.
U.S. oil production will grow each year through 2020, rising a total of 14 percent from this year, according to the EIA’s Annual Energy Outlook. Petroleum demand will gain less than 3 percent during the same period.
The record drop in rigs drilling for oil in the U.S. could bottom out this month, with operators already reviving operations in parts of Eagle Ford and Permian in Texas, Morgan Stanley said. The rig count dropped to 668 in the week ended May 8, the lowest since 2010, according to Baker Hughes Inc.
U.S. monthly production will decline in the third quarter from the second but will increase again in the last three months of this year, EIA forecasts.
“We’ll see some demand recovery because of lower prices over the long term, but demand is not going to grow as fast as supply,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Crude is down by $1.29/barrel to $60.04. Gasolines moved up by 1.20 cents/gallon at the average rack in Selma. Diesel fuel is up by 0.79 cents/gallon. Prices are:
Have a great day,