• 8 minutes U.S. Shale Oil Debt: Deep the Denial
  • 13 minutes WTI @ $75.75, headed for $64 - 67
  • 16 minutes Trump vs. MbS
  • 11 hours Dyson Will Build Its Electric Cars in Singapore
  • 1 hour Iraq war and Possible Lies
  • 2 hours Why I Think Natural Gas is the Logical Future of Energy
  • 6 hours Despite pressure about Khashoggi's Murder: Saudi Arabia Reassures On Oil Supply, Says Will Meet Demand
  • 10 hours China Opens Longest Mega-Bridge Linking Hong Kong to Mainland
  • 2 hours How Long Until We Have Working Nuclear Fusion Reactor?
  • 8 hours The Balkans Are Coming Apart at the Seams Again
  • 4 hours Can “Renewables” Dent the World’s need for Electricity?
  • 6 hours Satellite Moons to Replace Streetlamps?!
  • 52 mins The Touching Story of a First Nation that Sued Trans Mountain
  • 6 hours World to Install Over One Trillion Watts of Clean Energy by 2023
  • 9 hours These are the world’s most competitive economies: US No. 1
  • 13 hours Aramco to Become Major Player in LNG?
  • 2 hours A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
Alt Text

China Turns Its Back On U.S. Oil

As the ongoing trade war…

Alt Text

Europe’s Gas Game Just Took A Wild Twist

Despite the advantages of Russian…

Alt Text

Canadian Oil Patch Grapples With Cannabis Legalization

Canada has officially legalized recreational…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

End of Driving Season Could Send Oil Back to February Lows

Summer driving season: it’s the season to be traveling, what with long weekends, annual leaves and short getaways from the banalities of everyday life at the office. The summer season in the Northern Hemisphere is when demand for crude oil invariably picks up, because fuel consumption increases. In Europe, there’s greater hunger for diesel and in the U.S. there’s a pickup in gasoline demand. Usually.

This year’s driving season, however, is shaping up to be a very disappointing exception to the usual seasonal patterns in fuel demand. People are not traveling now as much as analysts expected back in May. Back then, the outlook was rosy, with some analysts forecasting an oil rebound to as much as $60 a barrel. Instead, we got WTI slipping into bear market.

The driving season ends next month, which is when most refineries shut down for maintenance after operating at near-full capacity during the summer months. This is—historically—when gasoline demand subsides. The end of summer travels is also when gasoline stockpiles in the U.S. could increase, further pushing down crude oil prices.

In the week ending 22 July, the EIA reported, gasoline production averaged 10.1 million barrels a day, more than in the previous week. Inventories of the most popular fuel also went up—by 500,000 barrels—after a 900,000-barrel buildup in the week ending 15 July. That buildup took the market by complete surprise—few seemed to have expected anything but a decline in fuel stockpiles in the very middle of driving season. Yet, they got the opposite.

It’s become a widely, though grudgingly, accepted truth that it’s impossible to predict what will happen in the oil market even in the nearest terms, what with all the supply disruptions that can happen here and there, and with the unpredictability of consumer behavior. However, looking at the most likely scenario for oil prices in September when refineries start shuttering operations for their regular maintenance, it would be safe to say prices will go further down.

They will go further down even if there are new supply outages in Nigeria or Libya – the market has basically gotten used to these as evidenced by the lack of any huge effect on international prices off the latest news from either Nigeria (new pipeline attacks) or Libya (plans to reopen four export terminals). While it’s true the latter could pressure international prices significantly if the plans announced come to fruition, the immediate effect has not been that great.

In the absence of any unforeseen events, crude oil might fall to lows last seen in February, especially when we factor in the behavior of Saudi Arabia, which seems to have no intention of curbing output and losing market share, and Russia, which is still pumping at record highs, despite a gaping budget deficit created by falling oil revenues.

By Irina Slav For Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment
  • Joe on August 02 2016 said:
    Thanks for the article. We know a lot abot seasonal gasoline consumption in the USA. How much do we we know about seasonal gasioline use in a China and India? Might be interesting.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News