Energy Futures Cautiously Coasting
Energy futures are cautiously coasting while OPEC+ closes in on a deal to either extend or ease output curbs into 2021. Today’s meeting should break the four-day impasse with some hinting at a compromise for a small production increase of 500,000 barrels-per-day (bpd).
Shell announced yesterday that the phased shutdown of its 240,000 bpd Convent, LA refinery began Monday evening. The permanent shutdown is anticipated to be completed by Christmas. The refiner plans to reduce its refining portfolio from 14 to around 6 plants by 2025 in an effort to reduce its carbon footprint and focus on products with lower emissions and alternative fuels. Shell is not alone in the pivot to lower carbon fuel, as other refiners are increasingly investing in renewable diesel.
Yesterday’s DOE report showed a moderate decline in crude stocks while distillate and gasoline inventories swelled as fuel demand continues to slide. Last week’s rise in distillate stocks broke its ten-week streak of drawdowns.
PADD 5 (West Coast) diesel inventories rested below its seasonal five-year range seemingly due to a surge in eastbound truck freight as more consumers choose to shop online versus brick-and-mortar stores.