Iran may be ramping up the pressure on the global markets, but US refiners seem to be rising to the occasion. According to data compiled from the Energy Information Administration, Dow Jones News points out that US refiners boosted crude-oil processing by 2.2% last week to an impressive 14.7 million barrels per day barrels day, which was the highest level for the week since 2007.
This surge came as the demand for US diesel exports is going through the roof. Record cold temperatures in Europe helped send US diesel exports to a record high. Reuters News reported that according to IEA data, estimated distillate exports hit a whopping 1.124 mln bpd, up from 996,000 bpd in the previous record report. This of course led to a surprise drawdown in crude supply of about 171,00 barrels.
Yet it seems there are some small signs that Iran may try to restart talks and step back from the brink of war. Reports of supply cuts to Europe were denied yet in some ways the Iranians are acknowledging what already exist. We have seen many buyers of Iranian oil already stop buying, making it harder to sell their oil anyway. Still the Iranian premium in oil is still rising as the risk premium is probably close to $20 a barrel. In the meantime, we'll add to the mix a pipeline explosion in Syria and continuing pressure in Nigeria! Buckle Up!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.