• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 10 minutes Phase One trade deal, for China it is all about technology war
  • 12 minutes Trump has changed into a World Leader
  • 6 hours Indonesia Stands Up to China. Will Japan Help?
  • 5 hours Shale Oil Fiasco
  • 6 hours Might be Time for NG Producers to Find New Career
  • 20 mins We're freezing! Isn't it great? The carbon tax must be working!
  • 9 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 11 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 3 hours Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 10 hours Beijing Must Face Reality That Taiwan is Independent
  • 10 hours China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 5 hours Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 1 day US Shale: Technology
  • 2 days Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
Alt Text

The Hottest Energy Investment Niche Of 2020

Most energy analysts are very…

Alt Text

U.S. LNG Booms As Natural Gas Prices Crash

Despite the recent collapse in…

Alt Text

The Complete Guide To Hydraulic Fracturing

The complete guide to hydraulic…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Premium Content

Fear Driving Energy Markets

Crude oil demand in the United States is down to its lowest level since the onset of the global economic recession. A lackluster economic recovery, coupled with cautious consumer sentiment, is keeping demand for petroleum products suppressed. Nevertheless, lingering concerns over geopolitical tensions with Iran has prompted some governments to raise the possibility of releasing strategic petroleum reserves. Fundamentally, it seems, markets are well supplied, though it may be emotional factors driving certain aspects of the energy market.

The American Petroleum Institute, in its report for July, finds that crude oil demand is down to its lowest levels in roughly four years. U.S. petroleum deliveries for July declined to around 18 million barrels per day, the lowest level for the month since 1995 and the lowest overall since the onset of the global economic recession in 2008. Oil production in the United States, however, reached 6.2 million bpd, the highest for any July figure since 1998 and total refinery inputs grew 2.3 percent in July to reach their highest level for the year.

John Felmy, the API's chief economist, said lower consumer demand was in large part a reflection of the lackluster U.S. economic recovery and lingering pessimism in the eurozone.

"While retail sales for July are up and housing has improved, the weak petroleum demand numbers are a strong indication the economy is still faltering," he said.

Oil for September delivery retreated 0.1 percent Monday to $95.88 on the New York Mercantile Exchange, ending four days of advances. Outside of the United States, the Joint Organization Data Initiative reports that crude oil production from Saudi Arabia in June reached its highest level in more than 30 years. Crude oil futures began declining last week on talk by some Western governments of a possible release of strategic petroleum reserves. White House spokesman Josh Earnest confirmed that a release from SPR "is an option that is on the table" in Washington.

The last time governments tapped into their strategic reserves in 2011, Libyan oil production was shuttered by civil war. When oil prices hovered about $100 per barrel early this year, however, most of the market was concerned by tensions with Iran more than a physical disruption, as was the case last year.

API said much of the decline in oil demand was because of lower gasoline usage in the United States. Refinery closures in California and the U.S. Midwest, coupled with a July oil spill in Wisconsin, pushed retail gasoline prices above the $4 per gallon mark. Consumers react strongly to that benchmark, but with fuel efficiency improving, it may be more of an emotional reaction despite lingering unemployment and personal financial concerns. Nevertheless, with the last U.S. holiday before the Christmas season approaching, political maneuvering may be more of a reflection of public sentiment than a legitimate concern about physical shortages in the energy market. Energy markets, said one analyst, are responding to "just about everything except oil news right now."

By. Daniel J. Graeber of Oilprice.com




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play