Trade War? What trade war? The fears that President Donald Trump’s threats of tariffs would plunge the globe into a devastating trade war is easing quite a bit. The Wall Street Journal reported that “'China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances,' people with knowledge of the matter said."
You can talk all you want about rising U.S. oil production, but the fact is that U.S. crude oil supply is below average. The Energy Information Agency, in its weekly report, said that U.S. commercial crude oil inventories fell by 2.6 million barrels to 428.3 million barrels, which the EIA says are the lower half of the average range for this time of year. This is happening even as U.S. oil production reportedly increased to 10.047 million barrels of oil a day.
March madness started early in crude oil as prices fell on relatively light volume and focused on bearish news about ignoring bullish news at its own peril. Traders sold oil off on a report that showed an increase in supply in Cushing, Okla., but it is about time. The Nymex Storage hub has seen supply fall at a record pace in recent weeks, and seeing that we are deep into refinery maintenance we should start to see the supply recover.
It’s "sunshine on the shoulder" season as U.S. refineries slow runs to 87.8% of capacity, running just 15.9 million barrels, the lowest level of the year as seasonal maintenance flips into high gear. The trade seemed disappointed that the overall 3-million-barrel build in crude oil supply was higher than expected. That is what should you expect when seasonal maintenance is happening.
From glut to shortages. During downturns in major commodity markets, there is a tendency to get all doomy and gloomy about the future and get locked into a lower than longer mentality. That kind of short-term thinking has engineered a major bottom in petroleum, and now that type of thinking may have an on impact natural gas.