• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 8 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 min Could Someone Give Me Insights on the Future of Renewable Energy?
  • 7 hours How Far Have We Really Gotten With Alternative Energy
  • 1 day "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 6 hours e-truck insanity
  • 3 days Bankruptcy in the Industry
  • 18 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 4 days The United States produced more crude oil than any nation, at any time.

Oil Prices Hit Hard By Lower Refinery Runs

Oil prices took a tumble on Wednesday post-EIA report, despite a favorable crude inventory report that showed oil inventories in the United States had shrunk by nearly ten million barrels.

The culprit for the downward price movement? Lower refinery throughputs for the week. In other words, the threat of refinery maintenance season.

Inventory levels are still above the five-year average for this time of year, and the summer driving season is now behind us. A new season now approaches: the dreaded maintenance season.

That fear sent oil prices tumbling despite today’s inventory draw. At 3:00 pm EDT, the WTI benchmark had fallen 3.32% to $41.34. The Brent benchmark had fallen by 2.83% to $44.29.

October WTI futures had also slipped, to $41.33—a $1.41 loss (-3.30%) on the day. WTI futures for the November contract were also down, by $1.42, at $41.66.

Refinery maintenance season is appropriately timed to coincide with the dip in demand as the summer driving season draws to a close, but for crude producers, it is a definitive sign that their refineries will be calling for less crude at a time when all eyes are on future oil demand.

Refiners are unlikely to balk at the downtime right now, as refinery margins have dropped off considerably, with some refiners looking to convert their facilities to biofuels. It is likely that instead, depressed margins and lower demand for gasoline will encourage refiners to take advantage of an extended maintenance period.

Gasoline margins, for example, have been about $1 per barrel in northwestern Europe for about the past two months—this is a drop from $12 per barrel just one year ago.

ADVERTISEMENT

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Maxander on September 02 2020 said:
    That suggests necessity of continuing crude oil production cut for much longer period than committed.
    & we are going to see continues drop in crude oil supply.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News