Apr 28, 2024

Demand Still a No Show

Oil prices have given back some of their gains as tensions have reduced from being red-hot to a simmer in the Middle East (chart OilJun24MA). Although expectations amongst most oil analysts are that demand will be strong in 2024, there is no bullish evidence, as of yet.

U.S. refining margins continue to trend weaker (chart ValRefMarg). Gasoline prices have been rallying (chart GasDslWTI). However, they have not yet hit the levels of last year, and already are showing signs of peaking. Diesel prices are visibly very weak. If demand was starting to pick up the pace, product prices would be showing some evidence of demand improving. Instead, gasoline and diesel prices continue to follow the weakness that has been progressively evident for several years.

Economists and analysts have been getting more and more bullish as the rotate out of the No Recession to the growth phase which they call Reflation, seems to rear its head. There is no evidence of any manifestation in oil demand yet.