The oil ministers of Iran and Qatar have suggested that OPEC’s production cut agreement may have to be extended beyond the June deadline, despite an almost 100-percent compliance rate.
The comments come a day after the American Petroleum Institute reported the second-largest crude oil inventory increase in history, at 14.227 million barrels, which added fuel to worries that production cut efforts are not enough to rebalance the market.
US oil production has turned a corner after a long period of weak petroleum prices, the government said, with volumes rising for the first time since early 2015.
The Energy Information Administration forecast that oil output from the US will increase 1.3 per cent to 9m barrels per day in 2017, abandoning an earlier prediction of a 0.9 per cent fall.
In the first forecast for 2018 in its monthly Short-Term Energy Outlook, the statistical agency said US crude production will rise another 3.3 per cent, or 300,000 b/d, to 9.3m b/d. Production hit bottom last September, EIA said.
“The general decline in US crude oil production that began almost two years ago is likely over, as higher average oil prices and improvements in drilling efficiency are giving a boost to output,” said Adam Sieminski, the EIA’s administrator.
US drivers burned through a record amount of petrol last month, according to industry data, showing the effects of cheap prices and a brightening labour market. Motor gasoline deliveries totaled 9.668m barrels per day in July, up 2.4 per cent from a year ago and surpassing a high notched in June, the American Petroleum Institute said.
The volumes sold — more than 10 per cent of global oil demand — came as American drivers enjoyed the lowest petrol prices in a dozen years, averaging $2.24 a gallon. July and August are the height of the US summer holiday driving season
The thirst for petrol did little to dent historically high US gasoline stocks that have dragged on oil markets. API said the stocks averaged 237.1m barrels in July, down fractionally from June and 8.7 per cent more than July 2015. In July US refiners upped gasoline output by 1.9 per cent on year to 10.2m b/d, while gasoline imports rose 10.5 per cent to 815,000 b/d, API said.
The damage on the Assam-Tripura national highway has led to Petrol being sold at Rs 300 for a litre and diesel at Rs 150 per litre. (PTI)
Extreme shortage of petrol and diesel in Tripura, due to poor road conditions, have hit the state even worse after torrential rains on Friday. People have come out on the streets and protesting against the shortage of basic commodities and hike in fuel prices. The damage on the Assam-Tripura national highway has led to Petrol being sold at Rs 300 for a litre and diesel at Rs 150 per litre. The bad condition of the roads, made worse by the rains, had also left the traffic disrupted. The repair work going on the highway has been stopped because of the rains. The already degenerating national highway which has been hit because of incessant rainfall is now filled with debris.
Carriers of essential commodities arriving from various places have been left stranded on the highway. In state capital, Agartala tyres were burnt in front of petrol pumps on Friday, while Trinamool Congress workers helped the public in blocking routes on the way to the state secretariat. The police arrested 50 people and ended the protest. The lack of fuel to even run buses have forced many schools to close. Taking cue from the Arvind Kejriwal-led Delhi government, Tripura had brought in the ‘Odd-Even’ system on Thursday and has also been forced to ration the fuel.
The headline in today’s 29-cent oil rally is that crude oil inventories have fallen for 9 consecutive weeks. That’s the most weeks in a row since data collection began in 1982 but it doesn’t come close to telling the story.
Oil inventories always fall in the June-August period, which is the peak driving season.
In the big picture, oil inventories are higher then they’ve ever been at this time of year. I’ve marked the first week of June on this chart for every year over the past decade. It shows total US oil inventories.
Even this understates the trend because there are huge inventories of gasoline building up because demand in the Summer driving season hasn’t been as strong as expected.
The Supreme Court-appointed green panel EPCA has recommended high pollution cess, of up to 25% on the cost of diesel cars above 2,000 cc, multiple times higher than the figure suggested by few automakers.
The Environment Pollution (Prevention and Control) Authority (EPCA) reasoned that imposition of steep cess was imperative to control air pollution in the national capital by making diesel vehicles “cost prohibitive”.
“The argument for a 1% cess therefore goes against the very grain of this,” EPCA said in a note to the apex court.
As per the note, the vehicles have to be divided into three categories — up to 1,200 cc, up to 2,000 cc and 2,000 cc and above — and an Environmental Compensation Cess of 10, 20 and 25% respectively should be imposed on them.
“Diesel car users cannot pay less tax per litre of fuel compared to petrol car and two-wheeler users. This needs to be equalised to control growing use of low tax diesel fuel (meant for farmers and freight) in cars that have cleaner substitutes,” it said.