RE: Brent back above 7022 Jul 2021 19:07
Thursday, July 22, 2021 9:14 AM EDT
It is also notable that we saw an increase in distillate demand last week. The increase in demand was probably due in part to the jet fuel sector of the distillery inventory which is seeing demand jump as air travel has hit the highest level since the covid 19 shut down. This is key to the oil demand recovery because this is the only sector, as far as demand is concerned, that hasn't hit pre covid levels. The EIA reported that distillate fuel inventories decreased by 1.3 million barrels last week and are about 4% below the five-year average for this time of year.
The way things are happening with all the stimulus in the global economy, it's clear that unless the delta variant starts to shut the economy down we're going to see oil demand around the globe hit record highs. This is coming at a time when governments are trying to reduce their investment in fossil fuels and trying to get more green. The combination of less investment and surging demand is going to have an obvious outcome. The price of oil is going to be strong and it's going to continue to drive higher so we are in a super cycle