This is why oil prices are up today. If the active rig count continues to fall, we should soon see draws from storage. Refiners are gearing up for the spike in demand that comes each summer. They are now drawing much more crude from inventory than they did a month ago.
CRUDE OIL INVENTORY/’000 bbls (Week Ended 4/10/15)
Current: 483,687
Actual Build/(Withdrawal): 1,294
Economist Average Estimate: 3,540
Previous: 482,393
Also, the IEA's monthly "Oil Market Report" contained this little note: "The forecast of global oil demand for 2015 has been raised by 90 kb/d to 93.6 mb/d, a gain of 1.1 mb/d on the year. The notable acceleration on 2014's 0.7 mb/d growth follows cold temperatures in 1Q15 and a steadily improving global economic backdrop." Demand will top 95 million bbls per day by year-end. See chart at https://www.iea.org/oilmarketreport/omrpublic/
As I have been saying for months: IEA is going to raise their global demand forecast month after month. Low fuel prices do have an impact on demand. In 2009, demand for refined products increased by a record 3.3 million bbls per day from the previous year and it was because of lower fuel prices. The same thing is going to happen. Combine increasing demand with falling U.S. production and we have the makings of a rally for oil prices during the back half of this year. - Dan
Oil Storage Report - April 15
Oil Storage Report - April 15
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group