Welcome to The Distillate! Petroleum industry news for informed decisions for Tuesday May 20th, 2025. A product of Standard Petroleum Logistics (an actual fuel distributor). Paid subscribers get access to news that is only available to industry insiders. Want to know what’s really going on with in the oil industry and save money? You can do that, with a subscription to The Distillate.
Markets are calm this morning, with products largely flat.
EV sales on the decline. Recent reports show that sales of electric vehicles are starting to slide. Despite heavy subsidies and such coveted perks as being allowed to use the HOV lane without annoying passengers, most of America still finds them inconvenient. Charging infrastructure is a large part of the issue. Drivers still struggle to locate a working high-speed charger outside of their homes and there is no consistency or transparency in the rate you pay for the electricity. Operability issues in hot and cold weather and the overall expense of maintenance (which is much higher for EVs than traditional internal combustion engines) also rank high on the list of reasons “why not.” The EV tax credit is still in effect for now so there is potential for an uptick in sales at year end when those on the fence jump over hoping to grab that rebate before it expires.
Solving oversupply with fire. Major investment banks such as Goldman Sachs and Barclays have been projecting declining global crude oil prices based on expectation of supply glut. Peace talks between Russia and Ukraine, an Iranian nuclear deal and OPEC’s unwinding of voluntary production cuts are events poised to add barrels to market. Yet some of that may be balanced by the need for air conditioning in the Middle East. Saudi Arabia is expected to shift from natural gas to burning crude oil for electricity generation this summer, based on higher efficiency and lower prices. Analysts expect the Nation will consume as much as 470,000 bpd of crude to help deal with the relentless heat which is known to reach 130 degrees regularly in desert regions. Oil products are not just for heating; it takes a lot of oil (often in the form of natural gas) to generate electricity and cool buildings as well.
Rig count continues to slide. Despite crude prices marching upward, the number of active drilling oil rigs in America continues to slide. The trend in drilling rigs is considered a leading indicator of future oil and gas production. We currently stand at 473 operating rigs, 24 less than we had this time last year. The most expensive operations are the first to go and the last to restart. In the U.S., that’s rigs operating in the deepest waters farthest off shore.
Fuel emergency lifts HOS limits. Seemingly out of nowhere, the Midwest has a severe fuel shortage leaving companies traveling hundreds of miles to find gas and diesel. As this was a direct hit to America’s breadbasket, the fed stepped in. The Federal Motor Carrier Safety Administration issued a waiver of Hours of Service limits for commercial carriers involved in the transportation of gas and diesel until June 30th for Iowa, Kansas and Nebraska. Prolonged winter weather pushed early planting forward to align with spring refinery maintenance and later planting. That coupled with low terminal inventories due to market conditions created the perfect storm.
NACS Registration open. The National Association of Convenience Stores’ Annual Show – a veritable showcase of who’s who in C-Stores – has opened registration for their fall event. Over 430,000 square feet of education, vendor demonstrations and displays are on tap for the October event, held this year in Chicago. Any and all products related to the industry are on display – from reuseable straws to fuel pumps and food brands. Early bird pricing goes through June 13th. If you are a C-Store operator this is an excellent event to learn about new technologies, solutions for problems and the latest products. It is massive, however. You’ll need several days to get the full experience.
Solar panel drama. Officials have announced that undisclosed communication devices have been found in Chinese-produced solar panels. The panels typically contain hardware that allows for performance monitoring and remote access for maintenance. A full accounting of what is in the panels is included with purchase. However, “additional, undocumented communication channels that…allow firewalls to be circumvented” have also been discovered. This potentially allows the Chinese government to turn off the power remotely. And apparently, it’s happened before. In November solar power inverters in the U.S. and UK were disabled from China, showing a real risk with the technology and foreign control.
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