- U.S. crude production will stay below pre-Covid levels according to the Energy Information Administration (EIA) said in its monthly Short-Term Energy Outlook (STEO)
- U.S. production will be down the next two years from record highs of 12.25mm bbl/d in 2019 but will rise to 11.1mm bbl/d in 2021 and 11.5mm bbl/d in 2022, with most of the growth occurring in the Permian basin
- WTI will average $49.70/bl in 2021, up by nearly 9c from the previous forecast
- Global consumption of petroleum fuels averaged 92.2mm bbl/d in 2020, down by 9.0 mm bbl/d from 2019. The EIA expects global liquid fuels consumption will grow by 5.6mm bbl/d in 2021 and 3.3mm bbl/d in 2022
- Winter freeze in Asia prompt utility companies to acquire spot supplies of fuel oil
- Goldman estimates oil demand will see a 1MMBbl/d boost in the coming weeks, with potential for 1.5 MMBbl/d if TTD prices reach $10/MMBtu
- Fuel oil shipments at Japanese ports have risen about 38% year-over-year, thus far in January
- Saudi Arabia reduced crude shipments to at least 11 refiners in Asia
- The kingdom cut supplies by 20-30% in some instances, as new compensatory cuts begin to take place
- The move comes as Asian refiners near their peak refinery maintenance or turnaround season, reducing the need for supplies. Additionally, a resurgence in COVID-19 cases has weighed on demand
- EIA weekly data is due at 9:30 am CST
- U.S. Crude Inventories: - 1,930 MBbls (Avg. Bloomberg surveys)
- U.S. Gasoline Inventories: + 2,609 MBbls
- U.S. Distillate Inventories: + 2,242MBbls
- U.S. Refinery Utilization: + 0.00% change