• 4 mintues Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Forecasts for oil stocks.
  • 9 minutes Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 13 minutes European gas market to 2040 according to Platts Analitics
  • 12 hours Fukushima
  • 2 days America's pandemic dead deserve accountability after Birx disclosure
  • 17 hours Today Biden calls for Summit with Putin. Will Joe apologize to Putin for calling him a "Killer" ?
  • 1 day CO2 Mitigation on Earth and Magnesium Civilization on Mars – Just Add Water
  • 1 hour U.S. Presidential Elections Status - Electoral Votes
  • 7 hours Simple question: What is the expected impact in electricity Demand when EV deployment exceeds 10%
  • 10 hours Biden about to face first real test. Russia building up military on Ukraine border.
  • 13 hours Joe Biden's Presidency
  • 1 day New Chinese Coal Plants Equal All those in U.S.A
  • 4 days Does .001 of Atmosphere Control Earth's Climate?!
  • 3 days Oh the Dems!!! They cheer for helping people while stabbing them in the back!!! Enbridge asks Canadian government to support oil pipeline in dispute with Michigan
  • 3 days The coming Cyber Attack
  • 5 days NG spot prices hit triple digits for weekend delivery
Editorial Dept

Editorial Dept

More Info

Premium Content

The Big Oil Bet That Went Bad

1. Exploding distillate glut

- U.S. distillate stocks are soaring, jumping from 136 million barrels in mid-April to 174 million barrels at the end of May.

- Distillate stocks are only 1 percent below a record high last reached in 2010.

- “The latest inventory build happened even more quickly than during the 2008/09 economic crisis, as stocks soared now by 52 million barrels, i.e. 43%, in just two months,” Commerzbank said in a note. “This is attributable first and foremost to extremely weak demand, which at 2.7 million barrels per day has fallen to its lowest level since April 1999.”

- At the start of the pandemic, it was gasoline that was dragging down refiners. Now it is diesel and other distillates.

- Cracks for diesel in Europe have collapsed to an all-time low. “The situation looks awful,” an executive at a big European refiner told Reuters.

2. Petrochemical sector facing a bust

- The oil majors have made a large bet on plastics and petrochemicals as a hedge against long-term demand. But the market for polyethylene is facing overcapacity and narrowing margins.

- The buildout of petrochemical facilities in the U.S. over the past decade has led to a wave of new facilities, but prices for polyethylene – the building block of plastic – have nosedived.

- PE prices traded at about $1 per ton in 2011-2012 when Royal Dutch Shell (NYSE: RDS.A) planned its petrochemical…





Leave a comment

Leave a comment




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