Oil Slump Not Over as Offline Refineries Add to Surplus

[Wiljor]

Oil prices will fall in the second quarter as refineries shut for maintanance, curbing demand for crude, according to forecasters at Societe Generale SA and Facts Global Energy.

Demand will slow because of planned shutdowns, sending Brent crude, the global benchmark, to as low as $35 a barrel, Fereidun Fesharaki, Facts Global chairman, told a conference on Tuesday in Fujairah, United Arab Emirates. The next few months will be “detrimental for oil” with Brent averaging $51.30 in the second quarter, Alain Bokobza, SocGen’s head of strategy in global asset allocation, said in a report e-mailed on Tuesday.

Refineries typically shut for maintenance in the second quarter before the driving season in the U.S. starts in May and demand for gasoline usually rises. Globally, offline refining capacity will jump to about 5 million barrels a day by April 15 from 3.4 million currently, according to data compiled by Bloomberg.

“From April we are likely to see a substantial drop in the price of oil,” Fesharaki said at the Fujairah Bunkering and Fuel Oil Forum.

Brent for May delivery rose 0.2 percent to $56.05 a barrel on the ICE Futures Europe exchange at 11:42 a.m. in London. The average of 24 analyst estimates compiled by Bloomberg and submitted since Feb. 3 is for Brent at $55.33 in the second quarter. Brent has dropped 48 percent in the past year amid a surplus that Facts Global estimates at 2 million barrels a day.

http://www.bloomberg.com/news/articles/2015-03-24/oil-slump-not-over-as-refineries-add-to-surplus-by-going-offline

[SocalDinar]

The Bigger problem is the lack of storage capacity.  The USA is at over 80% its capacity. Investors worldwide have filled every ship they can find and lease with crude oil.  Once we hit 100 % capacity oil will drop even further. could see $20-$30.00 a barrel no problem.

 

And Elan Musk comes out with his new revolutionary  battery next month. It could be a game changer . The refiners will be ok but it could severly hurt those depending upon crude oil.

[Adam Montana]

The Bigger problem is the lack of storage capacity.  The USA is at over 80% its capacity. Investors worldwide have filled every ship they can find and lease with crude oil.  Once we hit 100 % capacity oil will drop even further. could see $20-$30.00 a barrel no problem.

 

And Elan Musk comes out with his new revolutionary  battery next month. It could be a game changer . The refiners will be ok but it could severly hurt those depending upon crude oil.

 

Wasn't it George Bush that vowed to stockpile enormous quantities of oil after 9/11 so we wouldn't be at the mercy of the Middle East? If I recall correctly, he stated a specific goal of something like 800(M? B?) barrels... hmm.

 

And about that new battery, I've been itching to go solar but I've held off on making any investments just because of that battery. I'm very excited to see where that takes us!

But on the price of oil - I strongly doubt it will ever get down that far. There's simply too much money to lose, and the PTB simply won't let it happen.

 

[skeetdog]

I think it's just another move on the board by TPTB to cripple the Russia (Putin) and force them to concentrate on their next meal and not the next country they can ''Bully''.....I'm not really sure if Tanks can run on batteries....Where's ''tankdude'' when ya need him....