*Gulf Coast Refineries Shut Ahead of Storm, Gasoline Soars
As 82% of the Gulf of Mexico production is shut down due to the storms and hurricanes that are battering the coastline which equates to nearly 1 million barrels a day, the gasoline futures rallied on the news of the shutdown. The day ended with the gasoline futures up 6.5%, the highest levels since May report Bloomberg. The market awaits eagerly the outcome of the scale of destruction that Storm Laura may bring, with it being tipped to be the first major Atlantic hurricane of the year, which could bring with it more pricing volatility as its course develops.
*S Korea Shuns US crude Amid Tepid Fuel Demand; WTI still expensive
South Korean imports of WTI and Eagle Ford are expected to be cut in half in Q3 of this year, with this being the largest decline in crude imports to the country since it began importing the north America product in 2015. This comes as consumption of domestic jet fuel and gasoline has stalled primarily in the aviation sector states S&P.
China is expected to overtake South Korea as the largest importer of crude, with over 30 million barrels expected to be delivered, making it the largest month of imports on record. A further 14 million barrels are currently on track to be delivered within the next 3 months.
*Hedge Funds Shift Focus from Crude to Fuels
Hedge funds have turned their attention away from crude say Reuters, favouring the products as they take the view that margins are too low to continue at current levels. Petroleum products were the most favourable product to be taken on at over 20 million barrels, while net sales for crude were at -8 million over the last 2 months. The previous optimism around crude and the recovering economies has quickly disappeared due to looming lockdowns and sluggish Asian demand for crude.
*U.S., China Reaffirm Commitment to Phase 1 Trade Deal
China has indicated its commitment to the US trade deal, after China’s commerce ministry confirmed the ‘constructive dialogue’ between the two nations offered much needed relief to the markets. The deal includes Chinese consumption of American goods, especially looking at the importation of US crude.