Goff Heating Oil Market Price Information
Oil Market, Exchange Rate and Heating Oil Price Information January 2021.
Brent Crude Dated ($ per Barrel)
Price at Start of Month: $50.29 Price at End of Month: $55.84
Highest Price in Month: $56.17 Lowest Price in Month: $50.29
Pound £ to US Dollar Rate $ Exchange Rate FT:
Start of Month: 1.3580 End of Month: 1.3732
Kerosene (Heating Oil) Cargo Price $ per tonne
Start of Month: $432.00 End of Month: $458.50
Highest Price in Month: $473.50 Lowest Price in Month: $432.00
Resulting in a Heating Oil Price (Pence Per Litre) Monthly range: 2.45 ppl
Vaccine brings recovery – recovery brings back oil demand!
Over the past six months, excess U.S. crude oil and product inventories have declined from their surplus at the start of the summer of 2020. Petroleum inventories have been slowly falling and are now at just single-digit-percent surpluses over five-year averages, compared to 20-30 percent excess over five-year seasonal averages last summer. Demand for gasoline and other petroleum products in the United States has recovered from multi-year lows in April and May, but the last leg of the recovery to pre-pandemic levels proves to be the most difficult and seems to have stalled at the end of 2020.
Sure, consumption has recovered from the spring of 2020, and the excess of inventories has been shrinking. This has come, however, at the expense of significantly reduced refinery utilization and crude oil processing since oil prices and demand crashed in March. Refiners are still processing crude at levels below normal, with refinery utilization across the United States at just 80.7 percent in the week ending on January 1, compared to 93-percent utilization for the same week in the previous year, EIA’s weekly petroleum report showed last week.
This latest report showed a major crude oil draw of 8 million barrels, but substantial inventory builds in gasoline and middle distillates.
Still, excess stocks of all types have been trending down in recent months, and middle distillate consumption such as diesel are back to pre-crisis level, Reuters market analyst John Kemp writes.
Over the past four weeks, distillate fuel product supplied—the proxy for demand—averaged 3.7 million barrels per day (bpd), down by just 0.3 percent from the same period last year, EIA’s report showed.
However, the largest component of U.S. oil demand—gasoline consumption—was still down by a double-digit percentage. Over the past four weeks, motor gasoline product supplied averaged 7.9 million bpd, down by 11.8 percent from the same period last year, EIA said.
This suggests that the last part of the oil demand recovery will be the hardest, with the most recent data pointing to a stall again due to reduced travel amid measures to fight soaring COVID-19 cases.
In the week to January 1, implied U.S. gasoline demand fell to levels last seen in May 2020, according to Bloomberg estimates of EIA data on motor gasoline product supplied.
There’s no evidence of a substantial pick-up in gasoline demand in the immediate term, and the still raging pandemic will continue to weigh on travel in coming weeks, analysts told Bloomberg last week.
In 2020, vehicle travel in the U.S. dropped to multi-year lows, with April vehicle travel the lowest on record dating back to 2000, according to the EIA. Average gasoline prices were also down last year to the lowest annual average since 2016.
End-December saw the highest U.S. gasoline price for nine months, but not because of high demand.
“Despite low demand, pump prices are more expensive because crude oil has seen steady gains,” AAA spokesperson Jeanette Casselano McGee said.
U.S. gasoline demand was at the lowest level for the last week of December in 23 years (since 1998)—at 8.1 million bpd, with holiday travel down by at least 25 percent, AAA said last week. As of January 4, AAA expected gasoline demand to dwindle in coming weeks as the holiday season ended.
This year, U.S. gasoline prices will rise compared to 2020, to an average of $2.44 per gallon, with a low point in January and a possible high point in July, according to GasBuddy’s Fuel Price Outlook. However, due to the pandemic, the margin for error is 19.8 percent, the highest level of uncertainty in predictions since GasBuddy started its forecasts in 2012.
“With the coronavirus in the driver’s seat, 2021 looks to be a very uncertain year for gas prices with a wide range of possibilities. Add in President-elect Biden and the potential for new policy adding into the equation, we could see gas prices coming into 2020 like a lamb and leaving like a lion,” said Patrick De Haan, Head of Petroleum Analysis at GasBuddy.
The biggest unknowns for U.S. gasoline and total oil demand, of course, will be the pandemic, how fast vaccines are being rolled out, and how fast they would allow a return to normality, analysts including GasBuddy say.
At least in the early months of 2021, U.S. gasoline demand will struggle to reach pre-crisis levels.
By Tsvetana Paraskova for Oilprice.com 11th Jan 2021
The Organization of Petroleum Exporting Countries withheld some 1.3 billion barrels of oil supply last year to keep prices from falling even further, the secretary-general of the cartel said.
“I am sure each and every one of us can recall the dire situation the industry was in, which was most dramatically illustrated on 20 April 2020 when the price of WTI went negative. It was a visceral day, and one often described as ‘Black Monday.’” Mohammed Barkindo said, speaking at the S&P Global Platts Americas Petroleum and Energy Conference.
“It was a time when the industry faced a potential crude oversupply of nearly 1.3 billion barrels. There were even deep concerns that some storage hubs could actually reach tank tops. Thankfully, this never came to pass, in part due to the decisive actions of the DoC [the Declaration of Cooperation]. Since then the DoC has shown great courage and flexibility and has adapted as and when necessary to changing market dynamics, particularly with the post-summer advent of second and third waves of COVID-19.”
OPEC+’s intervention into the global oil supply situation was indeed crucial for reversing the oil price decline that saw WTI dive below zero, even though the latter event was as much a result of speculator moves as of oil’s fundamentals, if not more so.
This intervention has reasserted OPEC as a factor to be reckoned with on oil markets after growing doubts about the organization’s relevance amid the rise of U.S. shale. Indeed, Barkindo noted that OPEC’s work is far from done as the pandemic is still around despite the good news about the start of mass vaccinations in most parts of the world.
“Vaccines offer some much-needed light at the end of the tunnel, but the ever-increasing number of COVID-19 cases, and sadly the human loss as well as renewed lockdowns, are a harsh reminder of how delicate the situation remains,” the official said.
By Irina Slav for Oilprice.com 28th Jan 21
Expanding refining capacity in the world’s largest oil importer, China, continues to support the global oil market and demand, even at times when demand elsewhere is tepid, participants said at the ongoing Argus Crude Live Virtual Conference.
The expansion of refining capacity in China—thanks to new refineries from state oil majors and from independent refiners, which were allowed to import crude oil under government-allocated quotas five years ago—has supported global oil demand, even at the price of exacerbating a fuel oversupply in China and increase Chinese exports to other Asian markets, depressing regional refining margins.
According to Argus and its conference participants, Chinese refining capacity is unlikely to shrink in the near term, because the government has price control to ensure refining margins for local producers.
Chinese authorities are not expected to give up control over the prices of refined oil products, the Argus conference participants said.
The capacity expansions and the guaranteed price for refined products in China supported oil demand in the world’s top oil importer even during the early onset of the pandemic last year, participants at the conference said.
After a pandemic-hit slow start to 2020, China’s refiners boosted production from April, thanks to ultra-low crude oil prices and a rebound in the Chinese economy and fuel demand, setting a new record for crude oil processing volumes. Crude oil throughput at China’s refineries averaged 674.41 million tons, or 13.51 million barrels per day (bpd), in 2020, a 3.2-percent increase over the previous year, according to data from the National Bureau of Statistics cited by Argus.
Last year, when international crude oil prices sank in March, April, and most of May, Chinese refiners took advantage of the lowest prices in years and stocked up on low-priced crude. For several months, China was smashing crude oil import records through the summer, and tankers had to wait for weeks to discharge the crude as port congestion was growing. Several new refining units also contributed to China’s record-high crude processing rates in 2020, as did the higher import quotas given to independent refiners—the so-called teapots—by the government.
By Charles Kennedy for Oilprice.com 28th Jan 21
Additional Oil Market commentary & Market Data available from the BBC here: Market Data
The Office for National Statistics record the price of heating oil and publish monthly updates on the average delivered cost of a domestic delivery of 1000 litres of kerosene in the UK . The information held by the ONS is freely available online and can be found here: ONS Price of heating oil