Good morning all. Brent futures were down 36 cents, or 0.8%, at $45.01 a barrel by 4:42 am GMT, WTI futures were down 38 cents, or 0.9%, at $42.55 a barrel.
The US Federal Reserve released the minutes of its July Federal Open Market Committee meeting on Aug. 19 that highlighted the COVID-19 pandemic “posted considerable risks to the economic outlook over the medium term.” However, its reluctance to provide further clarity on rate guidance and more accommodative monetary policy stances pushed the US dollar higher in the US trading session, reversing the past weeks trend.
As there is a strong inverse correlation between the US dollar and crude prices, a stronger US dollar means less support for the global crude complex.
US commercial crude inventories fell 1.63 million barrels to 512.45 million barrels and gasoline inventories fell 3.32 million barrels to 243.76 million barrels in the week ended August 14, according to US Energy Information Administration data released on August 19. It was the fourth consecutive week of drawdown in US commercial crude stocks, but fell short of the American Petroleum Institute’s expectations of a 4.26 million-barrel draw.
On the supply side, OPEC+ concluded its Joint Ministerial Monitoring Committee meeting on August 19 with the Saudi Arabian and Russian co-chairs urging counterparts to remain disciplined in adhering to their committed production cuts. The 23-country OPEC+ coalition exceeded its production quota by 357,000 b/d over May-July despite overcompliance by Saudi Arabia, according to Platts reports.
Members that violated their production quotas in May, June and July are required to make additional cuts beyond their already committed cuts in August and September to make up for their excess production. Notably, Iraq has pledged to make 400,000 b/d in extra cuts for August and September in a plan endorsed by Saudi Arabia and its Gulf allies. Furthermore, according to a draft OPEC+ statement seen by Reuters, the cartel is wary about a second extended wave of the pandemic which might pose a major risk for the oil market recovery. The next JMMC meeting is scheduled for September 17, with a delegate level technical advisory committee due to meet the day before.
Meanwhile, crude shipments exported from Saudi Arabia are seen increasing month-on-month, according to tanker-tracking data compiled by Bloomberg. Furthermore, according to the same source, five VLCCs carrying a combined volume of about 9 million barrels of North Sea crude are floating off China and Singapore.
MARKETS NEWS:
* OPEC Compliance Seen at 70% in August as Exports Higher: Kpler
* Saudi Oil Min Sees Demand at 97% of Pre-Pandemic Level in 4Q
* Global Oil Inventories Have Started Shrinking: Russia’s Novak
* Saudi Prince, Iraqi Prime Minister Discuss Oil Markets: SPA
* Venezuela’s Maduro Extends Commission to Boost Oil Production
* Five VLCCs With North Sea Crude Float at Sea in Asia
* Haftar to Allow Limited Libya Oil Exports to Ease Power Gap
* U.S. Crude Stockpiles Fall; Big Draw on Gasoline: EIA Takeaways
* Pemex’s Top Oil Platform Struggles to Load Supertankers to Asia
* Benchmark VLCCs Steady; Mideast-Japan Clean Tankers Extend Gains
OTHER NEWS:
* Trump’s OPEC Push Fails to Avert U.S. Oil Industry’s Breakdown
* U.S., China to Plan Resumption of Delayed Trade Deal Talks
* Cnooc Sheds Costs as China Prepares for a Low Oil-Price Future
* Baker Hughes, Chevron, GE, Honeywell Sign Iraq Energy Deals
* Petronas Said to Show Interest in Buying Permian’s DoublePoint
* Occidental Sells Land Rights in Rockies for $1.3 Billion
* Mass Offshore Oil-Servicer Busts Imperil $30 Billion of Debt
* Biggest Oil Fund and Its CEO Face Impending SEC Action
* Fossil Fuels Face No ‘Wholesale Assault’ From Biden, RBC Says
PHYSICAL CRUDE NEWS:
* ASIA: Physical Cargo Prices Dip; Saudis Keep Up Pressure
* LATAM: More Venezuela Sanctions; Pemex’s FPSO Troubles
* US/CANADA: Trump and OPEC+ Couldn’t Stop Oil’s Breakdown
* NSEA: BP Sells Ekofisk Lower; Five VLCCs Float in Asia
* MED: Shell Bids Urals Higher; Neste Wins Surgut Tender
* WAF: NPDC Raises Oil Output; Nigeria Loading Plans Awaited
OIL PRODUCT NEWS:
* U.S.: No Gasoline Reckoning, But Watch This Gauge
* EUROPE: Pernis Unit; Tupras Delays Work to 2021
* ASIA: Spot Naphtha Slumps; Jet Demand Seen Weaker
ECONOMIC EVENTS: (Times are London. )
* JODI oil output data
* Singapore onshore oil-product stockpile weekly data
* Insights Global weekly report on European refined product inventories in ARA region
ANALYST COLUMNS:
* China’s Sinopec, PetroChina to Boost Diesel Exports in Aug.: JLC
* U.S. Oil Output Seen Between 11m-11.5m B/D in 2H: Macquarie
* Drop in Natural Gas Volume Outpaces Virus-Fueled Demand Decline
OTHER FINANCIAL MARKETS:
* Stocks, U.S. Futures Drop; Dollar Extends Gain: Markets Wrap
Singapore 380 INDIC
Sep20 264.75 / 266.75
Oct20 262.25 / 264.25
Nov20 260.75 / 262.75
Dec20 261.00 / 263.00
Jan21 262.75 / 264.75
Feb21 264.75 / 266.75
Q4-20 261.25 / 263.25
Q1-21 264.50 / 266.50
Q2-21 269.75 / 271.75
Q3-21 273.25 / 276.25
CAL21 268.50 / 274.50
Rotterdam 3.5% INDIC
Sep20 250.50 / 252.50
Oct20 247.25 / 249.25
Nov20 245.75 / 247.75
Dec20 245.75 / 247.75
Jan21 247.50 / 249.50
Feb21 249.25 / 251.25
Q4-20 246.25 / 248.25
Q1-21 249.00 / 251.00
Q2-21 253.25 / 255.25
Q3-21 255.75 / 258.75
CAL21 252.00 / 258.00
Singapore VLSFO 0.5% INDIC
Sep20 328.50 / 333.50
Oct20 331.25 / 336.25
Nov20 333.75 / 338.75
Dec20 336.25 / 341.25
Jan21 339.50 / 344.50
Feb21 342.50 / 347.50
Q4-20 333.75 / 338.75
Q1-21 342.25 / 347.25
Q2-21 350.00 / 356.00
Q3-21 357.00 / 363.00
CAL21 352.75 / 358.75
Rott VLSFO 0.5% INDIC
Sep20 307.25 / 312.25
Oct20 310.25 / 315.25
Nov20 313.00 / 318.00
Dec20 315.50 / 320.50
Jan21 319.50 / 324.50
Feb21 323.25 / 328.25
Q4-20 312.75 / 317.75
Q1-21 323.00 / 328.00
Q2-21 331.00 / 337.00
Q3-21 337.25 / 343.25
CAL21 333.00 / 339.00
Sing 10ppm GO INDIC
Sep20 49.88 / 50.02
Oct20 50.27 / 50.47
Nov20 50.67 / 50.87
Dec20 51.10 / 51.30
Jan21 51.60 / 51.80
Feb21 52.10 / 52.30
Q4-20 50.70 / 50.90
Q1-21 52.11 / 52.31
Q2-21 53.53 / 53.73
Q3-21 54.75 / 54.95
CAL21 53.86 / 54.26
ICE Gasoil 10ppm INDIC
Sep20 376.63 / 378.63
Oct20 381.49 / 383.49
Nov20 385.56 / 387.56
Dec20 389.46 / 391.46
Jan21 393.73 / 395.73
Feb21 397.98 / 399.98
Q4-20 385.50 / 387.50
Q1-21 397.71 / 399.71
Q2-21 406.45 / 408.45
Q3-21 419.12 / 421.12
CAL21 412.10 / 414.10
Rott Hi5 Sing Hi5
Sep20 59.08 65.83
Oct20 65.33 71.08
Nov20 69.58 75.08
Dec20 72.08 77.33
Jan21 74.33 78.58
Feb21 76.33 79.33
Q4-20 69.00 74.50
Q1-21 76.16 79.33
Q2-21 82.58 82.83
Q3-21 85.41 85.08
CAL21 82.00 85.00