No more exciting news, market pullback/correction completedNow let’s focus on fundamental and how much inventory will be gone in three months given that average 5 million barrels lost each week!
Why US crude inventory continues falling in winter:
Year over year:
1. production increased: 1m bpd; this is recovery rather than capacity increase. In other words, the next one million bpd will be much harder and cost much higher!
2. Export increased 900k bpd due world wide oil shortage by OPEC cut and increased demand.
3. Import decreased 500k bpd same due to the cut;
4. Much more fuel export requiring high refinery input;
5. Skyrocketing domestic demand increase: burn 10% more fuel this year over 2014 due to low gas price, quick economic growth, historically low unemployment rate, skyrocketing truck and suv sales.
Do you know China had 150m motor vehicles in 2015, and now the number is 200m and the number will reach 250m in 2020?
Do you know air plane burns 50m ton fuel this year in China and air transportation scale in China will double by 2025?
80 dollar oil is achievable!