Crude Pushed Lower by Refinery Runs, Margins and Supply: Amrita Sen

The current downward trend on crude prices is driven by lower refinery runs, and weaker margins as well as higher non-OPEC supply, which is partly seasonal, Amrita Sen, Co-Founder of Energy Aspects said in an interview with CNBC.

• When asked what is driving the current downside on oil prices, Amrita Sen said: “It is a combination of factors. One of the things we are picking up that refineries that were supposed to come back from maintenance have been pretty slow in coming back. Runs are definitely underperforming expectations. We had a bit weaker refining margins that is part of it, part of it is more technical issues that we keep seeing since covid, that has been a big driver on the demand side.”
• “Supply seasonally always rises during this time of the year, Canadian production is at its peak in November, December. US production has surprised to the upside and that was contrary to our expectations”, Sen added.
• Brazil and Guyana’s output is also slightly higher than previously expected, she added.
• “We are seeing a softening of fundamentals but we are still seeing counter seasonal draws in Q4, the draws were meant to be a lot bigger, they are less now, price action suggests that there is a huge build of inventories, that is not there yet”, she said.
• “There is a bit of a mismatch between price action and fundamentals right now”, Sen said.