Towards the end of July, oil prices fell slightly as signs indicated that the recent tightness in the markets may be loosening, giving some relief from high energy prices.
On the demand side, the use of gasoline in the United States has stalled due to high prices at the pump. Despite retail prices falling recently, gasoline consumption has remained below what it was in summer 2020, when COVID-19 kept many drivers off the roads. There are also concerns that high COVID-19 cases in China and the country’s zero-COVID approach may slow the country’s consumption of oil products. On the supply side, Libya is expected to soon return to about 1.2 million barrels per day (bpd) of crude oil production, following a resolution to the blockade that hit its production.
Concerns about market shortages have clearly eased somewhat, as reflected in the futures market. An Oanda Corp Senior Market Analyst, Ed Moya, said to Bloomberg about the feeling among traders:
“Exhaustion is settling in on the oil trade. Oil is no longer the easiest trade on Wall Street and that has many traders abandoning their bullish bets.”
While any relief from high energy prices is welcome news for households and businesses, improving energy efficiency can still be a significant way to cut energy bills. At TrAchem, our expert team can help explore advanced lubrication options. For example, if you suspect you’re getting poor performance in a compressor, switching to a synthetic product like Kluber Summit can yield as much as a 5% efficiency gain. Speak to us to learn more.