Rebounding USA Refineries to Counterbalance the Firm Crude Oil Demand, Prices to Take a Reverse Gear

The petrochemical sector continues to pose a strong demand for crude oil with a surge in the consumption of the downstream products in the end-user industries as the economies revive from the pandemic restrictions. The market fundamentals, which had been under supply pressure for the past six months, now appear to be bullish with the crude inventories starting to pile up on improved domestic output.

The USA’s crude oil production kept on struggling to satiate the increasing demand due to back-to-back blows from the COVID19 pandemic followed by the Ida hurricane that struck three-quarters of the oil facilities housed at the Gulf of Mexico. Low crude oil supplies led to an unambiguous hike in the crude oil prices in the USA which rippled to other territories as well. According to the ChemAnalyst Database, the crude oil price in the USA rose to USD 70.34 per barrel in November 2021 after registering a 7% hike from the price recorded in August 2021, and an 18% hike from the price recorded in April 2021.

Fortunately, the soaring price trends in the USA shall soon take a downward course as the recent twirl in crude oil supply outlook indicates toward a positive future. The supply of crude oil is considerably improving as the major oil refineries belonging to key players like Shell, Marathon Petroleum, Exxon Mobil Corporation, etc. have resumed operation after undergoing speedy damage repairs.

Crude Oil is a hydrocarbon constituted liquid fuel that is extracted from the deep-seated oil rigs through the drilling process. Crude oil is a major feedstock for producing a number of extremely important fuels like gasoline, diesel, heating oil, etc. used in heating, transportation, generating electricity. It is also used as a raw material for producing performance chemicals like plastics, pharmaceuticals, and fertilizer products.

As per ChemAnalyst, the improvement in crude oil supplies with recovering oil refining activities is expected to instil hope among the producers, suppliers and the downstream market stakeholders who had been undergoing severe losses and losing competitiveness in the international markets. The improved supplies are expected to lower down the price of crude oil after a long period of upheaval and is also anticipated to boost the export of crude oil and related downstream products.