U.S. Economic Growth Boosting Fuel Consumption

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U.S. Economic Growth Boosting Fuel Consumption
U.S. Economic Growth Boosting Fuel Consumption

U.S. Economic Growth Boosting Fuel Consumption

As the latest data has come from the U.S. that the country has achieved 4.1 percent annualized gross domestic growth rate in the third quarter, the fastest pace in almost two years, experts believe that it is helping fuel consumption. In its latest report the Commerce Department said that the U.S. gross domestic product grew at a faster pace than expected.

After the positive outlook in the U.S. economy from the data by the Commerce Department, even the International Monetary Fund is raising its outlook for the country’s economy. In her statement IMF Managing Director Christine Lagarde said that as the U.S. economy is on the right track it is expected to fare better next year.

The Growth is Adding to Speculation Demand for Shipping

According to some experts, the growth is higher than expected growth in GDP, adding to speculation demand for shipping, and the oil to power ships. They believe that fuel sales in Singapore, the world’s top bunkering port, rose to 3.8 million tons in October and this according to them is one positive indication that will also help in appreciation of the crude prices which were at record low levels.

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Fuel Shipments to Expand

The latest reports show that Asian demand is set to pick up seasonally, while imports will recede from summer highs. Estimates are also there that European refinery runs remain low post-maintenance, tightening the supply of fuel oil. A major expansion in oil production has been in Russian oil fields wherein offline crude oil-refining capacity totaled 75,900 tons per day on December 11 this year.

Thus, Russia has seen an increase of 6.8 percent from the previous week. However, there is some trouble with the French oil production company as workers at Total SA (FP)’s refineries in France went on strike earlier this month over pay. The protests have disrupted production and according to reports the five plants can process about 60 percent of the nation’s output.

China Imports less Oil from Iran

China which has a huge requirement of oil was exporting a lot of oil from Iran; however, the latest data show that fuel oil imports from Iran fell to 30,000 tons in November which was 526,203 tons in May. The reduction is quite a lot as Iran was China’s biggest source of fuel oil in May. However, Russia is still the major seller of oil for China.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com