Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Vladimir Zernov
Crude Oil

Oil Video 11.09.20.


U.S. Domestic Oil Production Rises To 10 Million Barrels Per Day

The latest EIA Weekly Petroleum Status Report, which was published on Thursday, indicated that crude inventories increased by 2 million barrels, 1 million barrels less than indicated by API Crude Oil Stock Change report which showed a crude inventory build of roughly 3 million.

Gasoline inventories decreased by 3 million barrels while distallate fuel inventories declined by 1.7 million barrels.

Imports increased by 0.5 million barrels per day (bpd) and averaged 5.4 million bpd, playing a major role in the total increase of crude inventories.

Meanwhile, the U.S. domestic oil production has started to recover from hurricane-related shutdowns.  Oil production increased from 9.7 million bpd in the previous week to 10 million. Production is still below the pre-hurricane level of 10.8 million bpd.

It should be noted that U.S. oil producers have significant experience with re-starting production after hurricanes so domestic oil production will soon come back closer to previous levels.

In this light, oil demand growth is required to avoid an increase in inventory levels which will be bearish for oil. Unfortunately for bulls, the latest data on gasoline demand is not inspiring.

Gasoline Demand Continues To Drop

EIA reported that U.S. gasoline demand declined from 8.79 million bpd to 8.39 million bpd in the week ending September 4, 2020. In the week ending August 21, 2020, gasoline demand was 9.16 million bpd so it suffered a very significant decline in just several weeks.

Some analysts believe that the previous decline in gasoline demand (from 9.16 million bpd to 8.79 million bpd) was caused by hurricanes and the related disruption, but the second significant decline in a row is very disturbing for the bulls.

A year ago, gasoline demand stood at 9.81 million bpd, so current demand is lower by as much as 1.42 million bpd.

At this point, oil is trying to stabilize after the major sell-off so it may temporarily ignore the developments on the gasoline demand front as it recovers from an oversold condition. Longer-term, the softness of gasoline demand may present a serious problem for the oil market.

While the gasoline demand data is alarming, it remains to be seen whether oil will be able to get below the recent lows in the upcoming trading sessions as oil did not have any material pullback since early June and many traders have likely waited for an opportunity to scoop oil futures contracts at lower prices.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.