Supply/Demand: Crude Shows Surplus, Brent Rallies on Products

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March delivered the first substantial crude supply surplus since the start of the pandemic. Preliminary data put the surplus at 2.2 million barrels per day. Balances are harder to forecast with high prices and the war in Ukraine, but the prediction now is that April and May will also yield surpluses. The Brent market is trading June barrels, and crude prices are again on fire even though releases from strategic petroleum reserves (SPRs) could keep the market close to balance through the summer. The driving force behind the crude price is the tight refined product market, especially for diesel and jet fuel, but also for low-sulfur fuel oil and gasoline. Refiners can buy all the crude they need and make a huge profit running it, but they don’t have the capacity.

Oil Supply, Oil Demand, Oil Forecasts, Oil Products, Crude Oil
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