President-elect Donald Trump’s pick of U.S. Senator Marco Rubio for secretary of state could signal stricter enforcement of oil sanctions on Iran and Venezuela but concerns about retaliation by China could temper any efforts. Rubio, a longtime member of the Senate Foreign Relations Committee, has long pushed for a tougher U.S. policy on Iran and China. Rubio, whose parents immigrated from Cuba to the U.S., is also a critic of Venezuela’s socialist President Nicolas Maduro, whose two re-elections have been disputed by Washington, leading to oil sanctions on the OPEC nation. There is a very large concern with strict sanctions it puts the dollar at risk for its primary trading value, others could change to a different form of currency for trade as they move forward.
The planned closures of two U.S. refineries next year – LyondellBasell Industries 263,776 barrel-per-day Houston refinery and Phillips 66’s 139,000-bpd Los Angeles refinery – will help stop the slump in margins for plants that remain, the EIA said in its November Short-Term Energy Outlook. The closures will reduce U.S. refining capacity to 17.94 million barrels per day by the end of next year, the lowest since June 2022, according to EIA data. Capacity had grown over the past two years. The Houston refinery is closing its doors as a long-term initiative as pressure from renewables come into play. The Los Angeles refinery is closing its doors stating it’s one of the lower profit terminals vs their others. This came soon after the California Governor signed a bill to change the way the refinery needs to do business in that state.
Global oil supply will exceed demand in 2025 even if OPEC+ cuts remain in place, the International Energy Agency (IEA) said on Thursday, as rising production from the United States and other outside producers outpaces sluggish demand. “Rapid deployment of clean energy technologies is also increasingly displacing oil in transport and power generation, adding downward pressure to otherwise weak demand drivers,” the report added. The Paris-based agency left its 2025 oil demand growth forecast little changed at 990,000 bpd. At the same time, it expects non-OPEC+ nations to boost supply by 1.5 million bpd, driven by the United States, Canada, Guyana, and Argentina – more than the rate of demand growth. Next year’s surplus, as forecast by the IEA, could make it harder for OPEC+ to bring back production. Earlier this month, OPEC+ again postponed a plan to start easing output cuts amid falling prices.
This week’s DOE report can be viewed below.
Please contact your Energy Account Manager with any needs that you may have.
Propane
The EIA reported a draw of 2.141 million barrels for the week ending Nov 8th, down to 98.4 million bbls overall. The draw was higher than the industry expectation calling for a draw of 1.2 million bbls. Over the last five years inventories have averaged a draw of 784,000 barrels during week 45 of the year. Region specific, the Midwest posted a small draw of 100k bbls, while the Gulf Coast and East Coast regions each posted draws of 1 million bbls. While exports backed off about 22% from the previous week, the domestic implied demand category increased 85% from the previous week which could be related to volumes due to be exported out for this week or a delay in exports due to the tropical storm in the Gulf last week.
This week’s DOE and Midwest propane Inventory report are below. Propane is trading at 44.6% of the value of crude oil today.
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