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Oil settles higher with OPEC+ expected to extend output cuts and U.S. crude supplies down a second week

Oil futures settled higher on Wednesday as traders bet that the OPEC+ alliance will extend output cuts into the new year and U.S. government data revealed a decline in domestic crude inventories for a a second week in a row. A “tick lower in refining activity and an increase in imports and production” led to a “minor draw to crude inventories,” said Matt Smith, director of commodity research at ClipperData. A significant drop, however, “in implied demand over the holiday week has resulted in solid builds to both gasoline and distillate inventories, tilting the report bearish on the whole,” he said in emailed commentary.

U.S. crude inventories dip, fuel stocks build amid weak demand: EIA

U.S. crude oil stockpiles fell modestly last week, while gasoline and distillate inventories surged as refiners slowed production amid weakening demand, the Energy Information Administration said on Wednesday.

“A significant drop in implied demand over the holiday week has resulted in solid builds to both gasoline and distillate inventories, tilting the report bearish on the whole,” said Matt Smith, director of commodity research at ClipperData, said referring to the Thanksgiving holiday on Nov. 26.

As Thanksgiving Approaches, Travel Inches Up, But Fuel Consumption Is Still Way Down

The holidays are upon us which, in normal times, means a big season for travel, and for fuel demand. But things are a bit different this year. As COVID cases increase nationwide, many Americans are rethinking their Thanksgiving travels. Still others are pressing on with their plans, albeit against the guidance of health authorities who caution this isn’t the time to be moving about the country. “You’ve got travelers that were screened at U.S. airport security checkpoints, they topped one million last Friday,” said Matt Smith, director of commodity research at ClipperData. “That’s only the second time since March where we’ve seen it that high. So we are seeing that increased activity.” Still, Smith said, air travel is down 40% from this time last year. Gasoline, on the other hand, has seen higher demand than jet fuel, as more travelers avoid airplanes and opt instead to travel in personal vehicles.

Oil And Gas Industry Facing A ‘Sea Change’ Toward Renewable Fuels

As the pandemic continues to strain oil and gas companies, some are using it as an opportunity to more aggressively shift toward the development of renewable fuels. Matt Smith, director of commodity research at ClipperData, tells Texas Standard that the pandemic hastened what was already a “sea change” in the industry toward more renewable #fuels. “The drumbeat is building for peak gasoline demand,” Smith said. “So whether that’s due to the behavioral changes we’ve seen this year in terms of working from home, or if it’s technological advances due to greater fuel efficiency, or if it’s simply just that move towards more electric vehicles, there is that sea change underway.”

Oil skyrockets after Pfizer’s vaccine breakthrough

Oil prices skyrocketed Monday after Pfizer revealed a vaccine breakthrough that could clear some of the black clouds hovering over the energy industry. "Oil is rallying like a mad thing, joining the dots between a potential vaccine and a rebound in global demand growth," said Matt Smith, director of commodity research at ClipperData.

 Crude oil tanker rates likely to remain low until petroleum demand increases

"Data from ClipperData indicate that global crudeoil floating storage (defined here as a crude oil tanker that is within a designated storage zone for at least seven days, is anchored or drifting slowly, and is known to be loaded from a crude facility) increased from 65.9 million barrels on March 1, 2020, to 221.5 million barrels on July 9, 2020. As of October 13, global floating storage has fallen 19% from its recent high in July, and floating storage in China has fallen 41% from its recent high in August (Figure 3)."

In Huge Turnaround, Natural Gas Prices Have Doubled Since June

Much of the oil and gas industry has been hit hard by the pandemic. But some sectors, like liquefied natural gas exports, have rebounded quite significantly since last spring. Matt Smith, director of commodity research for ClipperData, told Texas standard that after LNG prices dropped in June to about $1.50 per mmbtu – the lowest in 25 years – they rebounded significantly in recent weeks. “We were knee deep in coronavirus lockdown, which meant the world was oversupplied with natural gas,” Smith said. “Fast-forward just a few months later and prices are just shy of $3 … and the winter months are looking considerably higher than that as well.”

Dallas Fed Survey Finds Oil Price Needs To Rise 25% To See Rig Counts Increase

“While we still could see further storms forming in the next few weeks, topical activity really should start dropping off sharply as we get into the latter half of October,” ClipperData's Matt Smith said. “That’s the good side of things. All that said, energy infrastructure is still being impacted particularly by Laura and Marco that happened back in August… We’ve got operations that are still trying to restart. Lake Charles refineries are still suffering from power outages there, and the Cameron LNG terminal in the same area which is struggling with the same issue.

The limits of the Special Tribunal for Lebanon and what Syrians can learn

We are often taught to believe that international judicial accountability is the ultimate resolution for crimes committed. Yet, after eleven years of adjudication and nearly $1 billion spent by different stakeholders, the Special Tribunal for Lebanon’s (STL) judgment on August 18 demonstrated that justice is not necessarily delivered by international courts. Indeed, like most international bodies and mechanisms, they can be subject to political whims, legal hurdles, technical bureaucracies, obstruction, protracted proceedings, and high costs. In the case of the STL, these obstacles hollowed the mandate of the Tribunal and ultimately resulted in a deficient verdict unable to influence Lebanon’s increasing social, political, and economic woes. Authored ClipperData Geopolitical Analyst Bachar EL-Halabi.

The Energy Industry is Bracing For Yet Another Hit From Tropical Activity

It’s been a busy season so far and now several offshore drilling platforms are hunkering down for their second potential hurricane in less than a month, as a strengthening Tropical Storm Sally heads toward the Louisiana coast. “September 10th – the peak of Atlantic hurricane season – on the same day it was announced that weather conditions had flipped to La Niña,” said Matt Smith, director of #commodity research at ClipperData. “It means below normal sea surface temperatures in the Pacific Ocean… it could lead to more frequent and stronger hurricanes for the end of the Atlantic Hurricane season. We’ve already had a record and it loos like that could extend into October.”