Week Ahead In Oil: Earnings Season Will Provide Clues About Demand

The US earnings season is beginning to provide some useful glimpses into where real oil demand is positioned. According to the US Energy Information Agency, 69% of all the petroleum bought in the US (or 14.16 million barrels a day) are used in transport. In that respect, an update of Tesla’s earnings and the level of sales for electric cars will be key to see how the balance of oil-fuelled versus electric cars is changing.

In Europe, the sight of cars being plugged into the sides of houses charging up for the night is becoming more and more common, particularly as the climate change protests have gathered steam, but the number of electric cars on the road still constitutes a relatively very small percentage of the overall cars.

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Source: Dept of Energy / Argonne National Laboratory

Another useful gauge of petroleum demand are other resources companies, such as metal producers who have their finger on the pulse of industrial production, which makes up 25% of total oil demand. This week aluminium giant Alcoa, which sells aluminium to car producers and other major industries worldwide, warned that weakening economic conditions and trade tensions between China and the US will cause a decline in global industrial production, particularly in the car industry. Next week look out for results from miner Freeport McMoran on Wednesday for an insight into the copper market, construction and electronics industries:

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Results from Conoco Phillips are due on Thursday and will show how the company handled the last quarter of fluctuating oil prices which were pushed and pulled by crises in the Persian Gulf on the one hand and signals of declining Chinese demand on the other. More information about the state of the domestic US oil industry will be provided by an update from US Well Services, a specialist in electric fracking services, which reported a slight quarter-on-quarter reduction in its Q2 net loss to $21.5m.  

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