The world is running short on fuels—the warning was first issued by some **** ysts who were watching the physical market rather than futures charts. Now, Big Oil is joining the chorus of warnings, with Shell, Exxon and Chevron all saying that prices at the pump are set to stay higher, regardless of where crude oil prices go.
"The constraint pain point in the energy system is refining," Exxon's chief financial officer Neil Hansen told Bloomberg in an interview last week. This, according to him, is "something that perhaps the market isn't fully focused on."
Indeed, most oil market observers have focused exclusively on futures prices even when the gap between those and physical oil prices has been quite substantial as a result of the export flow disruption in the Middle East that has now spread from the Strait of Hormuz to the Red Sea as well. Futures prices are currently down from last week's peak on President Donald Trump's latest declaration of peace talks—but physical markets are in a very different place, and that is especially true of refined products.
Bloomberg reported last week that the wars in the Middle East and Ukraine, plus China's caps on fuel exports—and Russia's ban on diesel exports—have effectively slashed global refining capacity by as much as 10%. This may not sound like much at first glance, but it is a significant enough number to have some observers worried.
Related: Ukraine's Drone Campaign Drives Russian Oil Refining to 24-Year Low
#prices #last
"The constraint pain point in the energy system is refining," Exxon's chief financial officer Neil Hansen told Bloomberg in an interview last week. This, according to him, is "something that perhaps the market isn't fully focused on."
Indeed, most oil market observers have focused exclusively on futures prices even when the gap between those and physical oil prices has been quite substantial as a result of the export flow disruption in the Middle East that has now spread from the Strait of Hormuz to the Red Sea as well. Futures prices are currently down from last week's peak on President Donald Trump's latest declaration of peace talks—but physical markets are in a very different place, and that is especially true of refined products.
Bloomberg reported last week that the wars in the Middle East and Ukraine, plus China's caps on fuel exports—and Russia's ban on diesel exports—have effectively slashed global refining capacity by as much as 10%. This may not sound like much at first glance, but it is a significant enough number to have some observers worried.
Related: Ukraine's Drone Campaign Drives Russian Oil Refining to 24-Year Low
#prices #last
3 months ago
