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- 12 Feb
Oil prices, gasoline futures, and diesel futures decrease as stockpiles increase
According to the Wall Street Journal today, the US Energy Information Administration announced Wednesday that US crude stockpiles are at another record high. Oil companies are cutting back on their drilling investments and drilling activity has slowed, but the effects are not likely to be felt until the second half of this year, so say many experts.
The total quantity of oil in storage by companies such as refiners and traders is at the highest level in roughly 80 years. The US EIA stated in their weekly report that US oil production rose again to 49,000 barrels a day to 9.2 million barrels per day in the latest week, the highest level in reports dating back to 1983.
Oil prices dropped below $50 again to $48.84 per gallon on NYMEX. Gasoline futures fell by .91% while Diesel futures fell by 1%.
What does this mean from a fuel price management perspective? This is the season when refineries shut down plants for maintenance in anticipation of the higher demand months of summer. Usually that means refinery supplies lower and wholesale prices rise. Perhaps this year the inventory surplus will keep that wholesale increase at lower levels than years past, and lower oil prices will help suppress fuel price increases.
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