# Energy Markets Being Fear Driven

- Link: https://greenlivingguy.com/2012/09/energy-markets-being-fear-driven/
- Published: 2012-09-01T03:07:08-04:00
- Author: greenlivingguy

Crude oil demand in the United States is down to its lowest level since the onset
of the global economic recession. A lackluster economic recovery, coupled with cautious
consumer sentiment, is keeping demand for petroleum products suppressed. Nevertheless,
lingering concerns over geopolitical tensions with Iran has prompted some governments
to raise the possibility of releasing strategic petroleum reserves. Fundamentally,
it seems, markets are well supplied, though it may be emotional factors driving 
certain aspects of the energy market.

The American Petroleum Institute, in its report for July, finds that crude [oil demand](https://greenlivingguy.com/2019/08/the-fed-is-driving-down-oil-prices/)
is down to its lowest levels in roughly four years. U.S. petroleum deliveries for
July declined to around 18 million barrels per day, the lowest level for the month
since 1995 and the lowest overall since the onset of the global economic recession
in 2008. Oil production in the United States, however, reached 6.2 million bpd, 
the highest for any July figure since 1998 and total refinery inputs grew 2.3 percent
in July to reach their highest level for the year.

John Felmy, the API’s chief economist, said lower consumer demand was in large part
a reflection of the lackluster U.S. economic recovery and lingering pessimism in
the eurozone. 

“While retail sales for July are up and housing has improved, the weak petroleum
demand numbers are a strong indication the economy is still faltering,” he said.

Oil for September delivery retreated 0.1 percent Monday to $95.88 on the New York
Mercantile Exchange, ending four days of advances. Outside of the United States,
the Joint Organization Data Initiative reports that crude oil production from Saudi
Arabia in June reached its highest level in more than 30 years. Crude oil futures
began declining last week on talk by some Western governments of a possible release
of strategic petroleum reserves. White House spokesman Josh Earnest confirmed that
a release from SPR “is an option that is on the table” in Washington.

The last time governments tapped into their strategic reserves in 2011, Libyan oil
production was shuttered by civil war. When [oil prices](https://greenlivingguy.com/2005/05/dow-closes-down-46-on-surging-oil-prices/)
hovered about $100 per barrel early this year, however, most of the market was concerned
by tensions with Iran more than a physical disruption, as was the case last year.

API said much of the decline in oil demand was because of lower gasoline usage in
the United States. Refinery closures in California and the U.S. Midwest, coupled
with a July oil spill in Wisconsin, pushed retail gasoline prices above the $4 per
gallon mark. Consumers react strongly to that benchmark, but with fuel efficiency
improving, it may be more of an emotional reaction despite lingering unemployment
and personal financial concerns. Nevertheless, with the last U.S. holiday before
the Christmas season approaching, political maneuvering may be more of a reflection
of public sentiment than a legitimate concern about physical shortages in the energy
market. Energy markets, said one analyst, are responding to “just about everything
except oil news right now.”

Source: [http://oilprice.com/Energy/Energy-General/Fear-Driving-Energy-Markets.html](https://oilprice.com/Energy/Energy-General/Fear-Driving-Energy-Markets.html)

By. Daniel J. Graeber of [Oilprice.com](https://oilprice.com/) 

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 The Green Living Guy, Seth Leitman is an independent power producer, a green living
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