The trading arm of French supermajor TotalEnergies is gobbling up U.S. crude, pushing WTI crude for delivery at Cushing to its highest premium since November, Bloomberg has reported, citing unnamed sources.
Dubbed Atlantic Trading and Marketing Inc., the company appears to be taking advantage of high refining margins created by tight supply and strong demand for fuel.
The report suggests, however, that more U.S. oil will be staying at home at these price levels, as it becomes too expensive for overseas buyers from Asia and Europe. This won’t help keep prices at the pump low, however, Bloomberg’s authors noted. On the contrary, even as it stays at home, U.S. crude, thanks to its higher price, will drive fuel prices higher.
Another interesting aspect of these developments that the Bloomberg report notes is that demand for U.S. oil has jumped despite the fact it cannot replace the lost Saudi and Russian barrels. The latter are cutting heavier, more sour crude grades while WTI is light and sweet.
Even so, physical demand for U.S. crude is on the rise and why would it not be, when refining margins are hovering around $30 per barrel? This could prompt a shorter maintenance season for some refiners as they would look to capture as much of the high margin as possible.
The U.S. oil benchmark topped $90 per barrel earlier this month as demand concerns and tighter global inventories began to weigh on traders’ bearishness.
A week after Saudi Arabia and Russia announced the extension of their production cuts, Brent crude and WTI hit 10-month highs with more analysts and industry executives now forecasting oil’s return to $100.
The post The Trader That Sparked A Surge In U.S. Oil Prices appeared first on Energy News Beat.
Energy News Beat