Distillate Glut Challenges US Refiners -- RBN Energy -- October 27, 2020

OPEC basket, link here: holy mackerel. I knew it was bad. I didn't know it was this bad. OPEC, i.e., Saudi Arabia, is in deep doo-doo. So is Oman, not part of OPEC a reader tells me. LOL. Even Vladimir can read this chart.

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Back to the Bakken

Active rigs:

$38.93	10/27/2020	10/27/2019	10/27/2018	10/27/2017	10/27/2016
Active Rigs	14	57	67	53	35

One well coming off the confidential list:  

Tuesday, October 27, 2020: 22 for the month; 22 for the quarter, 687 for the year

• 32425, loc/NC, BR, Cleetwood 21-27TFH-A, Elidah, no production data, 

RBN Energy: distillate glut challenges US refiners but offers contango opportunity. Archived.

For the past several months, U.S. refineries have been producing more distillate than demand warrants, resulting in a glut of distillate fuels, especially ultra-low-sulfur diesel and jet fuel. The disconnect between supply and demand has been particularly stark in the Gulf Coast region, where just a couple of weeks ago distillate stocks sat 39% above their 10-year average after coming perilously close to tank tops in August. The culprit, of course, is COVID-19, or more specifically the effects of the pandemic on air travel and the broader economy. Demand for motor gasoline rebounded more quickly than demand for ULSD and jet fuel, and refineries churned out more gasoline to keep up, but that results in more distillate too. Now, finally, there are signs that distillate stocks may be easing back down. Today, we discuss the build-up in ULSD and jet fuel stockpiles, the ways they might revert to the norm, and the potential for storing distillate now and selling it at a higher price later.