Jul 13, 2022
With the price of crude oil hovering around $96 per barrel we are at multi month lows for energy product costs. The main reason for this recent downside is potential economic recession and rising Covid uncertainty in China. We hear talk of OPEC needing to increase production to alleviate high energy pricing, at issue is the fact that OPEC only has room for approximately 3 mb per day extra capacity. Along with this issue is that Nigeria and Angola are currently producing 1 mb per day less than previously and per reports they cannot increase from that level. Today’s domestic inventory report was actually positive across the board with gas, diesel, crude, and propane seeing significant builds, lower demand explains these inventory builds. Some analysts are calling current conditions a “buy zone” keep that in mind as we edge closer to fall demand season when prices are expected to increase.