When $40 a barrel crude was a bold call
My point, though, with bringing up oil prices from a year ago when most of the world thought we were entering an era of lower oil prices, was that they were wrong. Instead of looking at the big picture they got caught up in the emotion of the moment. That is the same reason that if you look at the big picture globally you might be more bullish oil and look beyond the current large increases in supply, globally inventories are already falling and we know oil imports in the U.S. will continue to fall at a time when exports will rise. Demand growth by any measure in 2017 and 2018 is expected to be above average. We may see demand growth hit a record as the world may buy more cars than ever before! Demand from India and Viet Nam and across Asia should be strong and the U.S. should start ramping up as well.
Don’t worry about the so-called drop in gasoline demand. Most of that is seasonal and weather related. We expect demand growth will hit another record in the U.S. this year. The EIA said that total motor gasoline inventories increased by 2.8 million barrels last week and are above the upper limit of the average range. Both finished gasoline inventories and blending component inventories increased last week. Distillate fuel inventories decreased by 0.7 million barrels last week but are above the upper limit of average range. Commercial petrol inventories increased by 11.1 million barrels last week. Total products supplied over the last four week period averaged about 19.4 million barrels per day, down by 2.0% from the same period last year.