Energies –
The crude oil inventory figure yesterday was once again deemed to be price-negative, yet once again futures mostly shrugged off this sentiment. I think we have to understand part of the “problem” leading to these surging inventory levels is a big downturn in refinery utilization, which is a very common occurrence at this time of year. Refinery runs typically start to pick back up in late Feb or early Mar.
It might also be worth pointing out that US crude oil exports averaged over 1 mbpd last week for the first time on record. The slowdown in refinery runs is aiding exporters’ ability to make shipments right now and it is worth noting that WTI prices are well under most other global benchmarks at the moment. Don’t be surprised if we see a strong export pace for another few weeks as refinery rates are slow. Additionally, the long term trend is most certainly higher for US crude oil exports going forward.
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