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The
monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil stepped
higher in April, increasing by $3.53 (+5.6%), to $66.25 per barrel. The advance
coincided with an essentially stable U.S. dollar, the lagged impacts of a 842,000
barrel-per-day (BPD) drop in the amount of oil supplied/demanded during February
(to 19.6 million BPD), and a very modest increase in accumulated oil stocks (monthly
average: 430 million barrels).
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From
the 30 April 2018 issue of Peak
Oil Review:
“With
only two weeks to go before President Trump decides whether the US will
withdraw from the Iran nuclear treaty, the oil market’s chief concern is about
what could happen if the US reimposes sanctions. Even though Washington would
have few, if any, allies helping to reimpose sanctions on Iran, the US carries
considerable weight in the world banking system by threatening to deny access
to the US to anyone doing business with Tehran. Conventional wisdom holds that
renewed sanctions would slow Iranian oil exports and drive prices higher. ...
“As
production from the Permian Basin increases, the US should be facing a glut of
light, sweet crude which cannot be processed efficiently in Gulf Coast
refineries. As could be expected, low US
crude prices have sent exports to an all-time high of 2.3 million b/d last
week. US exports are expected to remain around this level over the summer or
possibly climb even higher. ...
“Total
US crude and petroleum exports also hit a record high of 8.3 million b/d the
week before last. Much of the increase in oil products is due to the near
collapse of Venezuela’s refining capacity and other refining problems around
the Caribbean leaving US refiners to pick up the slack.”
The foregoing comments represent the
general economic views and analysis of Delphi Advisors, and are provided solely
for the purpose of information, instruction and discourse. They do not
constitute a solicitation or recommendation regarding any investment.
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