Good morning all. Brent futures were up 17 cents, or 0.4%, at $45.07 per barrel at 5:05 am GMT, while WTI futures rose 13 cents, or 0.3%, to $42.95 per barrel.
US initial jobless claims for the week ended Aug. 15 was reported at 1.11 million, higher than analysts’ expectations of a 925,000 gain and the 971,000 figure reported in the previous week, US Labor Department data released on August 20 showed.
Global COVID-19 case counts stood at 22,539,975, while total daily infections worldwide shot back up to 273,374 cases, slightly lower than the record of 304,449 cases set on August 14, according data from John Hopkins University. Despite the slowing infection rate, the continued spread of COVID-19 worldwide continues to weigh heavily on economic recovery, reviving concerns of energy demand.
Meanwhile, the headline OPEC+ Joint Ministerial Monitoring Committee meeting August 19 proved to be supportive for prices as the coalition continued to put a strong focus on compliance and compensation cuts. OPEC+ members that had exceeded their production quotas in May, June and July will have to cut a combined extra 2.31 million b/d as compensation by the end of September. Notably, Iraq and Nigeria were the two biggest laggards, overproducing by 851,000 b/d over the three months, while Nigeria was over its limit by 315,000 b/d. Even the United Arab Emirates, which made additional voluntary cuts in June, overproduced by around 50,000 bpd over the May-July period.
According to Stephen Innes, chief global markets strategist at AxiCorp, approximately 1.2 million b/d of additional cuts through August and September are needed to offset oversupply to date, implying OPEC+ cuts should fall to 8.9 million b/d in the current phase instead of the 7.7 million b/d target. An OPEC+ internal report seen by Reuters flagged demand risks, showing that the cartel expects oil demand in 2020 to fall by 9.1 million b/d, 100,000 bpd more than in its previous forecast. Furthermore, it reported that in case of a prolonged second wave of infections hits China, India, Europe and the United States in the second half of the year, demand could fall by 11.2 million b/d in 2020.
As bearish headwinds are mounting, analysts are expecting demand to continue their bumpy path towards medium and long term recovery. Meanwhile, Exxon Mobil Corp.’s Baton Rouge refinery in Louisiana is idling one of two fluid catalytic cracking units due to low demand, according to Bloomberg.
The plant already idled one of three cokers earlier this month and poor margins may mean more U.S. Gulf refiners reduce coker runs, taking less heavy crude in August and September. On the supply side, Russia is set to be the swing supplier for Atlantic Basin crude oil in September, potentially helping the region increase its exports, even as overall shipments slip for the rest of the zone.
MARKETS NEWS:
* Nigeria Plans ‘Substantial Cuts’ to Meet OPEC+ Oil Obligation
* China Gears Up for Record-Breaking U.S. Crude Haul in September
* Trafigura Fixes Two VLCCs to Ship Asia Distillates to Americas
* OIL OPTIONS: Brent Put Spreads Imply $20 Drop Before Year End
* Glencore Moves Forties Crude Cargo on Rare Journey to Black Sea
* Crude Oil Vessels Line Up Off Chile Ahead of Refinery Restart
* Nigeria to Boost Exports of Agbami Oil Grade in October: Plans
* Newbuild Suezmaxes Booked to Ship Diesel West From Asia
* Equatorial Guinea Plans Steady Exports of Zafiro Oil in October
* Chad Plans Steady Exports of Doba Crude Grade in October
* ARA Jet Fuel Stockpiles Shrink on Unusual Exports to U.S.: IG
* Vitol Sends VLCC of North Sea Forties Crude on Voyage to Brunei
* Russian Oil Could End Atlantic Basin’s Export Slump in September
* Rosneft Starts Jet Fuel Sales to German Airport, Plans Expansion
OTHER NEWS:
* Mexico Political Elite Engulfed by Scandal With Damning Leak
* Shell Exploring Divestment of Norwegian Business Gasnor
* Gulf Faces First Double Storm Threat in More than 60 Years
* Giant Florida Methane Plume Probed by EPA as Possible Violation
PHYSICAL CRUDE NEWS:
* ASIA: Petronas Buys Oct. Murban; More ESPO Cargoes Sold
* LATAM: Coker Margin Weakness; Chile Restarts Refinery
* US/CANADA: Trump’s OPEC Push Fails to Avert Oil Breakdown
* NSEA: Litasco Bids Forties; Vitol Moves VLCC to Brunei
* MED: Shell Buys Urals; Hellenic Gets CPC From Vitol (1)
* WAF: Nigeria to Lift Agbami Exports; Angola Spot Offers
OIL PRODUCT NEWS:
* U.S.: Jet Fuel Glut in Europe Spills to U.S.
* EUROPE: ARA Jet Stockpiles; Rosneft Refueling
* ASIA: Ships Skip Hong Kong; Singapore Inventory Up
ECONOMIC EVENTS: (Times are London. )
* 6:00pm Baker Hughes weekly rig count report
* 6:30pm ICE Commitments of Traders report
* 8:30pm CFTC Commitments of Traders report
ANALYST COLUMNS:
* Oil Supertanker Utilization Falls to Lowest This Year: Vortexa
* Covid 19 Could Cut Canada Oil Output 600k B/D Permanently: CERI
* Canadian Oil Sands Recovery to Outpace U.S. Shale: ESAI Energy
* Citi Raises Renewable Diesel Outlook 17%, Sees Feedstock Issues
* Singapore’s Floating Fuel Oil Stock Has Slumped By 20%: Vortexa
OTHER FINANCIAL MARKETS:
* Stocks Push Higher With Futures; Dollar Dips: Markets Wrap
Rotterdam 3.5% INDIC
Sep20 250.25 / 252.25
Oct20 246.75 / 248.75
Nov20 245.00 / 247.00
Dec20 245.00 / 247.00
Jan21 246.75 / 248.75
Feb21 248.25 / 250.25
Q4-20 245.50 / 247.50
Q1-21 248.25 / 250.25
Q2-21 252.75 / 254.75
Q3-21 255.75 / 258.75
CAL21 252.75 / 258.75
Singapore 380 INDIC
Sep20 263.75 / 265.75
Oct20 260.75 / 262.75
Nov20 259.50 / 261.50
Dec20 259.75 / 261.75
Jan21 261.75 / 263.75
Feb21 263.75 / 265.75
Q4-20 260.00 / 262.00
Q1-21 263.75 / 265.75
Q2-21 270.75 / 272.75
Q3-21 274.50 / 277.50
CAL21 270.25 / 276.25
Rott VLSFO 0.5% INDIC
Sep20 306.75 / 311.75
Oct20 309.75 / 314.75
Nov20 312.50 / 317.50
Dec20 315.25 / 320.25
Jan21 319.25 / 324.25
Feb21 323.00 / 328.00
Q4-20 312.50 / 317.50
Q1-21 322.75 / 327.75
Q2-21 333.00 / 339.00
Q3-21 338.25 / 346.25
CAL21 333.75 / 341.75
Singapore VLSFO 0.5% INDIC
Sep20 327.50 / 332.50
Oct20 330.25 / 335.25
Nov20 333.00 / 338.00
Dec20 335.75 / 340.75
Jan21 339.25 / 344.25
Feb21 342.25 / 347.25
Q4-20 333.00 / 338.00
Q1-21 342.00 / 347.00
Q2-21 352.50 / 358.50
Q3-21 358.25 / 366.25
CAL21 354.25 / 362.25
Sing 10ppm GO INDIC
Sep20 49.60 / 49.74
Oct20 50.03 / 50.23
Nov20 50.46 / 50.66
Dec20 50.92 / 51.12
Jan21 51.47 / 51.67
Feb21 52.02 / 52.22
Q4-20 50.42 / 50.72
Q1-21 51.97 / 52.27
Q2-21 53.43 / 53.73
Q3-21 54.69 / 54.99
CAL21 53.80 / 54.20
ICE Gasoil 10ppm INDIC
Sep20 374.63 / 376.63
Oct20 379.80 / 381.80
Nov20 383.97 / 385.97
Dec20 388.07 / 390.07
Jan21 392.81 / 394.81
Feb21 397.44 / 399.44
Q4-20 383.95 / 385.95
Q1-21 397.01 / 399.01
Q2-21 410.08 / 412.08
Q3-21 421.50 / 423.50
CAL21 411.36 / 413.36
Rott Hi5 Sing Hi5
Sep20 57.76 65.26
Oct20 64.26 71.01
Nov20 68.76 75.01
Dec20 71.51 77.51
Jan21 73.76 79.01
Feb21 76.01 80.01
Q4-20 68.15 74.50
Q1-21 75.76 80.01
Q2-21 82.26 83.84
Q3-21 84.84 86.26
CAL21 82.00 85.00