*US – China Trade Deal Review Postponed
There is no new date for the commencement of the discussions between China and the United States over their trade disagreements after the review of phase one was put on hold. This delay will allow China to purchase more US exports before they conduct their review of the compliance to the agreement. Current levels of Chinese imports are well behind on farm, manufactures and oil products. Reuters noted that Chinese state-owned oil firms have tentatively booked tankers to carry at least 20 million barrels of U.S. crude for August and September, indicating a ramp-up in energy purchases. China’s imports of U.S. farm and manufactured goods, energy and services are well behind the pace needed to meet a first-year target increase of $77 billion over 2017 purchases.
*OPEC+ Cuts at 97% Compliance
It is being reported by Reuters that the level of cuts from OPEC+ countries is at 97% in figures to be confirmed by the cartel’s technical compliance group known as the JTC. They will be meeting later today to confirm the figure. Total production allowances were increased after OPEC+ relaxed their cuts by 2 million bbls last month.
*Asian Distillate-Jet Cracks Edge Up
Margins for Asian jet fuel moved up last week, despite an increase in the contango structure of the product as the aviation industry continues to struggle with the collapse in air passenger demand. Jet fuel stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub STK-JET-ARA jumped 8.5% to a record high of 1.03 million tonnes in the week to Aug. 13, data from Dutch consultancy Insights Global showed. China’s refinery output jumped 12% in July from the same month a year earlier, hitting the highest on record for any single month, as several major state plants resumed operations after maintenance overhauls.
*Second Thoughts Over Future Oil Explorations
With a collapse in price and demand, it seems that oil companies are losing their appetite for large investments in new oil explorations. One example of this takes us to the Falklands. The island looked like the next region to develop an oil industry after a discovery of 1.7 billion bbls of crude in surrounding waters a decade ago. Like many other new areas for oil exploration, the costs compared to the payback now make developments unaffordable, and with peak oil on the horizon they may never be developed.