A Downhill Slope Only Skiers (and Consumers) Could Love

By: Daniel Guttman / February 15, 2016

After hitting historical lows last week, WTI finished the week strong. A 12 percent rebound on Friday was the biggest rally seen in seven years, yet crude is still down under $30 a barrel, and to make matters worse, winter is almost over.

Why is that bad? Well, historically global oil demand has declined roughly 1.4 million barrels a day from February to May, primarily on the distillate side. Yes, this seasonal trend is already factored into the market and planned for ahead of time, however, with this year’s El-Nino winter pattern in addition to several large winter storms severely cramping gasoline consumption in Q1, it is inevitable that we will see more downward pressure on crude prices as well as refined products.


Additionally, planned refinery maintenance typically takes place between February and April. Refiners shut down either parts of or entire refineries for upgrades, cleaning, maintenance, and some just cut runs when margins are soft. In doing so, crude inventories rise even more, adding another bearish log into the already blazing global-surplus fire.


Will our domestic rail and truck freight slowdown pick up the pace to catapult distillate demand? Will spring weather arrive fast enough to spark travel, vacations, and motor vehicle gas consumption? Will 2016 bring prosperity, economic growth, and the ability for motorists to purchase larger vehicles with bigger engines? Time will tell. 



Categories: Daily Market Update

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

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