Morning all. Brent futures were down 8 cents at $45.35/b at 7:26 GMT, while WTI futures were down by 4 cents at $42.62.
US Energy Information Administration data released on August 12 showed that US commercial crude inventories fell 4.51 million barrels to 513.08 million barrels for the week ended August 7 and narrowed the surplus to the five-year average to about 15%. Supplies at Cushing rose by 1.3 million barrels to the highest since late May. Total gasoline stocks also moved 720,000 barrels lower to 247.08 million barrels while nationwide distillate stocks fell by 2.32 million barrels to 177.66 million barrels for the previous week, snapping three consecutive weeks of builds.
US fuel demand rose to 19.37 million b/d last week, the highest since March, according to EIA data, while crude output fell to 10.7 million b/d from 11 million b/d. US refineries raised operating rates to above 80% for the first time since March. Meanwhile, India’s consumption of oil products fell 12% in July from a year earlier.
OPEC, in its monthly oil market report released on August 12, revised down its projection of global demand by almost 100,000 b/d to 90.63 million b/d for 2020, citing the “lower economic activity levels in a few major non-OECD countries” as the cause. Global oil demand for 2021 was unchanged at 97.63 million b/d.
These forecasts contrast the US EIA’s Short-Term Energy Outlook released a day earlier on August 11, where the EIA raised its outlook for global oil demand by 250,000 b/d from last month’s forecast to 93.14 million b/d for 2020 and by 280,000 b/d to 100.16 million b/d for 2021.
This highlights the heightened level of uncertainty in the short-term demand outlook for oil, especially as COVID-19 daily cases worldwide remain high and a potential second wave remains a lingering concern.
Global COVID-19 cases are exceeding 20 million, and in the absence of a meaningful progress on a COVID-19 vaccine and the increasing uncertainty over a stalemate in Washington on a stimulus package, traders are cautious about whether new lockdowns might be necessary.
On the supply side, according to Reuters US crude production is forecasted to decline by 990,000 b/d this year to 11.26 million b/d, steeper than the 600,000 b/d decline it forecast last month.
Still, market participants will look for further cues on the outlook of the global crude complex from the International Energy Agency’s monthly oil market report scheduled for release later today.
MARKETS NEWS:
* Oil Traders Watching Weekly Report See Recovery Signals
* Oil Giant Saudi Aramco Plans Huge Spending Cut for 2021
* Jet Fuel a Headwind for Oil Market as Other Fuels Take Off
* Gasoline Demand On the Rise in the Waning Days of Summer
* OPEC Sees U.S. Shale Rivals Benefiting From Price Rebound
* Kuwait Cuts August OSPs to Europe, Asia; Prices to U.S. Stable
* U.S. West Coast Oil Imports Highest Since March: EIA
* U.S. Oil Production Drop Reflects Re-Benchmarking: EIA
OTHER NEWS:
* India Bars China Ships From Oil Trade as Ties Strain Further
* Oil Tanker Giant Says OPEC+ Cuts Have Led to Huge Glut of Ships
* Drones and Mist Cannons Help India’s Energy Sector Fight Virus
* Venezuela, China Agree Grace Period on Oil-for-Loan Deals: Rtrs
PHYSICAL CRUDE NEWS:
* ASIA: Saudis Meet Buyers’ Needs; Qatar Sets Sept. Prices
* LATAM: Venezuela Oil Production; Trafigura Buys Oriente
* US/CANADA: PSX Refinery Shifting to Renewable Fuels Plant
* NSEA: Equinor Sells Oseberg to Vitol; Kinneil Restart
* MED: Trafigura Offers Urals; CPC Loadings to Stay Low
* WAF: HPCL Seeks Cargoes for October; Tupras Tender
OIL PRODUCT NEWS:
* U.S.: Gasoline Demand On the Rise
* EUROPE: Flow to Americas Rises; Total Feyzin CDU
* ASIA: India July Demand; Japan Aug. Usage Drops
ECONOMIC EVENTS: (Times are London.)
* 9am: IEA Oil Market Report
* Singapore onshore oil-product stockpile weekly data
* Insights Global weekly report on European refined product inventories in ARA region
ANALYST COLUMNS:
* PBF Seen as Beneficiary on Phillips 66 Plan, Credit Suisse Says
* New Fuel Exporter Brunei Facing Asia Glut Pain: Fitch Solutions
* Atlantic Coast Ships Bakken 1st Time Since 2018: ClipperData
OTHER FINANCIAL MARKETS:
* Global Stock Rally Builds in Asia; Dollar Slips: Markets Wrap
Singapore 380 INDIC
Sep20 257.75 / 259.75
Oct20 257.50 / 259.50
Nov20 258.25 / 260.25
Dec20 259.50 / 261.50
Jan21 261.50 / 263.50
Feb21 263.25 / 265.25
Q4-20 258.25 / 260.25
Q1-21 263.25 / 265.25
Q2-21 268.00 / 270.00
Q3-21 271.75 / 274.75
CAL21 269.00 / 275.00
Rotterdam 3.5% INDIC
Sep20 248.25 / 250.25
Oct20 246.00 / 248.00
Nov20 245.25 / 247.25
Dec20 245.50 / 247.50
Jan21 247.25 / 249.25
Feb21 248.75 / 250.75
Q4-20 245.50 / 247.50
Q1-21 248.75 / 250.75
Q2-21 252.75 / 254.75
Q3-21 255.50 / 258.50
CAL21 252.50 / 258.50
Singapore VLSFO 0.5% INDIC
Sep20 330.25 / 335.25
Oct20 332.00 / 337.00
Nov20 334.00 / 339.00
Dec20 336.25 / 341.25
Jan21 339.50 / 344.50
Feb21 342.00 / 347.00
Q4-20 334.00 / 339.00
Q1-21 342.00 / 347.00
Q2-21 348.75 / 354.75
Q3-21 355.25 / 361.25
CAL21 351.50 / 357.50
Rott VLSFO 0.5% INDIC
Sep20 310.00 / 315.00
Oct20 313.50 / 318.50
Nov20 316.25 / 321.25
Dec20 318.50 / 323.50
Jan21 322.25 / 327.25
Feb21 325.25 / 330.25
Q4-20 316.00 / 321.00
Q1-21 325.00 / 330.00
Q2-21 332.75 / 338.75
Q3-21 339.25 / 345.25
CAL21 335.25 / 341.25
Sing 10ppm GO INDIC
Sep20 50.25 / 50.39
Oct20 50.59 / 50.79
Nov20 50.93 / 51.13
Dec20 51.28 / 51.48
Jan21 51.77 / 51.97
Feb21 52.25 / 52.45
Q4-20 50.95 / 51.15
Q1-21 52.24 / 52.44
Q2-21 53.46 / 53.66
Q3-21 54.62 / 54.82
CAL21 53.80 / 54.20
ICE Gasoil 10ppm INDIC
Sep20 380.22 / 382.22
Oct20 384.59 / 386.59
Nov20 387.91 / 389.91
Dec20 391.58 / 393.58
Jan21 395.45 / 397.45
Feb21 399.14 / 401.14
Q4-20 388.05 / 390.05
Q1-21 398.87 / 400.87
Q2-21 406.67 / 408.67
Q3-21 416.92 / 418.92
CAL21 411.47 / 413.47