![]() ![]() That has left the US structurally short of refining capacity for the first time in decades, analysts said. Refiners have been struggling to rebuild inventories which have dwindled, especially on the US East Coast, reflecting exports to Europe where buyers are weaning themselves off of Russian oil.Ĭurrently, refiners are utilising about 94% of their capacity, but overall US refining capacity has fallen, with at least five oil-processing plants shutting during the pandemic. Numerous companies have said they will avoid excessive investment to boost output due to investors’ desires to hold the line on spending, rather than respond to US$100-plus barrel prices that have persisted for months. Other majors, including Exxon Mobil and TotalEnergies, as well as US independent shale operators, reported strong figures that have spurred share repurchases and dividend investments. Be firm but kind in correcting disinformation, even if it's this shameless.' 'This is clearly a crime. Shell reported a record quarter in May and Chevron Corp and BP have posted their best numbers in a decade. 'That's why the correct response here is for us to hold the line in love. The high prices for drivers come as major oil-and-gas companies post bumper profits. Gasoline product supplied, a proxy for demand, was 9.2 million barrels per day last week, according to the US Energy Information Administration, broadly in line with five-year seasonal averages. “The US$5 level is where we could see very heavy amounts of gasoline demand destruction,” said Reid L’Anson, senior economist at Kpler.Īdjusting for inflation, the US gasoline average is still approximately 8% below June 2008 highs around US$5.41 a gallon, according to US Energy Department figures.Ĭonsumer spending has so far remained resilient even with inflation running at its highest level in more than four decades, with household balance sheets shored up by pandemic relief programmes and a tight job market that has fueled strong wage gains, especially for lower-income workers. Still, economists expect demand may start to decline if prices remain above US$5 a barrel for a sustained period. US road travel, however, has remained relatively strong, just a couple of percentage points below pre-pandemic levels, even as prices have risen. Yet fuel prices have been surging around the world due to a combination of rebounding demand, sanctions on oil producer Russia after its invasion of Ukraine and a squeeze on refining capacity. ![]() Biden has pulled on numerous levers to try to lower prices, including a record release of barrels from US strategic reserves, waivers on rules for producing summer gasoline, and leaning on major OPEC countries to boost output.
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