However, U.S. refiners are missing out on the boom: File Image/Pixabay
Oil futures rose as much as 1.03 percent on Wednesday after the U.S. Energy Information Administration reported that crude supplies slid to the lowest since January 2020 and distillate stockpiles posted the biggest decline since April.
While fuel inventories also fell by more than 2 million barrels last week, arguably the most uplifting IEA news was that jet fuel demand rose in the U.S., with the moving average climbing to about 1.5 million barrels per day (bpd), the highest since March 2020.
The figures once again demonstrates that although the Covid Delta variant is bothersome to health officials, it's something Americans are coping with until the pandemic finally draws to a close (which, in the U.K. according to some scientists, will be this fall).
Brian Kessens, portfolio manager, Tortoise
The Delta variant "hasn't had any impact on mobility at all."
Brian Kessens, a portfolio manager at Tortoise, said demand is "pretty healthy from an inventory perspective," and he added that while rising infections bear watching, to date the Delta variant "hasn't had any impact on mobility at all."
But as noted by Bloomberg on Wednesday, U.S. refiners are missing out on the fuel boom due to a confluence of headwinds: some are unable to source cheaper grades of oil and are resorting to more expensive imports.
Further, some refiners are paying record amounts to comply with the U.S. biofuel mandate, and the still substantial glut of jet fuel due to lingering international travel restrictions is curbing what would normally be a much bigger source of revenue.
Meanwhile, the robust crude market is hardly confined to the U.S.: official data from Saudi Arabia on Wednesday showed that the value of the kingdom's oil exports in May increased 147 percent to just over 60 billion riyals ($16 billion) from a year earlier, while non-oil exports rose by 70 percent.
The General Authority for Statistics went on to note that "Overall merchandise exports increased by 120.1 percent in May 2021 compared to May 2020."