Brent Crude nears $85 as WTI tops $75 – at four year highs – as the tight oil markets continue to send gas prices at the pump to the highest in four years…
WTI is up over 2.5% today – spiking from $73 to $75 intraday – despite a report from Genscape that shows an 800k barrel inventory build at Cushing.
The FT notes that analysts said that frantic deal making by Asian buyers normally reliant on Iranian imports at an annual oil conference in Singapore last week indicated how tight the physical market was.
“The market is incredibly tight,” said Amrita Sen, founder of consultancy Energy Aspects, who noted that financial players were just realising the severity of the impact of Washington’s Iranian sanctions.
“People are distracted by various comments from [European] governments trying to set up alternative payment mechanisms, but the refiners and other companies dealing directly on the oil markets are saying it’s not worth the risk,” she added.
As AAA reports, despite gasoline demand dropping to 9.0 million b/d and inventories growing to 235.7 million bbl, according to the latest Energy Information Administration (EIA) data, the national gas price average has increased three cents on the week to land at $2.88 – a pump price not seen at the national average since mid-July.
“The last quarter of the year has kicked off with gas prices that feel more like summer than fall,” said Jeanette Casselano, AAA spokesperson.
“This time of year, motorists are accustomed to seeing prices drop steadily, but due to continued global supply and demand concerns as well as very expensive summertime crude oil prices, motorists are not seeing relief at the pump.”
Today’s national gas price average ($2.88) is the most expensive for the beginning of October since 2014. The average is four cents more than a month ago and 32 cents more than a year ago.
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