Good morning all. Brent rose 12 cents, or 0.3%, to $45.98 a barrel by 3:35 am GMT, while WTI remained steady at $43.35 a barrel.
The back-to-back tropical storms Marco and Laura has seen upstream operators shut about 1.558 million b/d of oil, or 84.3% of offshore production, by August 25, according to latest data from the US Bureau of Safety and Environmental Enforcement.
Platts reported that prominent oil refineries, such as Motiva’s more than 600,000 b/d refinery and chemical operations in Port Arthur, Texas, ExxonMobil’s 366,000 b/d in neighbouring Beaumont, and Valero’s 335,000 b/d Port Arthur Refinery will also be closed.
In total, approximately 1.8 million b/d in US oil refining capacity, or nearly 18% of total US Gulf Coast refinery capacity, is expected to come offline.
According to Stephen Innes, chief global markets strategist at AxiCorp, markets are currently pricing in a possible near-term catastrophic gasoline shortage.
Meanwhile, US and Chinese officials reaffirmed their commitment to a Phase 1 trade deal, which has seen China lagging on its obligations to buy American goods, potentially boosting flows between the world’s two largest oil consumers.
Elsewhere, inventory report by the American Petroleum Institute showed a larger-than-expected drawdown in both US commercial crude supplies and gasoline inventories. US crude inventories fell by 4.52 million barrels over the last week, much more than the 2.5 million barrels drawdown the market expected. Gasoline inventories fell by 6.39 million barrels, largely surpassing the 1.75 million barrels draw the market was expecting, seemingly providing some support to the RBOB, according to ING analysts.
Still, market participants will be looking for cues from a more definitive inventory report by the US Energy Information Administration, due later today.
There is a certain consensus on expectations of short term price movements determined by the extent of any damage caused by the hurricanes and then bolstered by the support from broader risk markets once the hurricane price pressure eases.
Nevertheless, any price rally in the global crude complex continues to be capped by rising COVID-19 cases worldwide and the resulting demand uncertainty and oversupply. Analysts predict that only significant progress on the discovery of a vaccine will be the major breakthrough for oil prices.
MARKETS NEWS:
* Global Oil Refining Faces Shake-Up From Asian Plastics Boom
* Pemex Oil Output Hits 41-Year Low After Ship Collision: Chart
* Houston Gasoline Jumps to 11-Month High Ahead of Hurricane Laura
* Oil Tanker Rate Surges as Hurricane Laura Moves Into U.S. Gulf
* U.S. Gulf Shuts in 1.559M B/D or 84% Oil Production: BSEE
* API Reports U.S. Crude Stockpiles Fell 4.52M Bbl Last Week
* Trans-Atlantic Gasoline Tankers Surge to Highest Since Mid-May
* Iraq Targets Fuel Oil, Naphtha Exports of Up to 720k Tons/Month
OTHER NEWS:
* U.S. Crude Leads Trade Gains as Soybean Sales to China Falter
* Exxon Mobil, Torrance Oil Workers Secure $4 Million Breaks Deal
PHYSICAL CRUDE NEWS:
* ASIA: Kimanis Trades Lower; Libyan Export Outlook Dims
* LATAM: Pemex Oil Output at 4-Decade Low; Napo to Unipec
* US/CANADA: Gulf Refineries Rush To Shut for Storm Laura
* NSEA: Litasco Bids Grades Higher; Elgin-Franklin Rates
* MED: OMV Bids CPC Lower; Primorsk Urals Exports to Gain
* WAF: Unipec Offers Three Cargoes; Exports to China to Drop
OIL PRODUCT NEWS:
* U.S.: Refiners Rush to Shutter With Laura Nearing
* EUROPE: BP Gelsenkirchen; New York Tanker Diverts
* ASIA: China Stockpiles Surge; LG Chem Buys Naphtha
ECONOMIC EVENTS: (Times are London.)
* 3:30pm: EIA weekly oil inventory report
* Genscape weekly ARA crude inventory report
* Final October loading schedule for Angola crude exports
ANALYST COLUMNS:
* OPEC to Raise 2021 Output Target as Market Tightens: StanChart
OTHER FINANCIAL MARKETS:
* Stocks Stall Near Global Record; Dollar Holds Drop: Markets Wrap
Singapore 380 INDIC
Sep20 269.50 / 271.50
Oct20 268.25 / 270.25
Nov20 268.25 / 270.25
Dec20 268.50 / 270.50
Jan21 270.00 / 272.00
Feb21 271.75 / 273.75
Q4-20 268.25 / 270.25
Q1-21 271.75 / 273.75
Q2-21 276.50 / 278.50
Q3-21 280.25 / 283.25
CAL21 272.00 / 278.00
Rotterdam 3.5% INDIC
Sep20 258.00 / 260.00
Oct20 254.50 / 256.50
Nov20 252.50 / 254.50
Dec20 252.00 / 254.00
Jan21 253.50 / 255.50
Feb21 255.00 / 257.00
Q4-20 253.00 / 255.00
Q1-21 255.00 / 257.00
Q2-21 259.00 / 261.00
Q3-21 261.75 / 264.75
CAL21 254.50 / 260.50
Singapore VLSFO 0.5% INDIC
Sep20 334.00 / 339.00
Oct20 336.25 / 341.25
Nov20 338.75 / 343.75
Dec20 341.25 / 346.25
Jan21 344.25 / 349.25
Feb21 347.00 / 352.00
Q4-20 338.75 / 343.75
Q1-21 347.00 / 352.00
Q2-21 354.00 / 360.00
Q3-21 360.75 / 366.75
CAL21 356.75 / 362.75
Rott VLSFO 0.5% INDIC
Sep20 311.50 / 316.50
Oct20 314.75 / 319.75
Nov20 318.00 / 323.00
Dec20 321.25 / 326.25
Jan21 325.00 / 330.00
Feb21 328.25 / 333.25
Q4-20 318.00 / 323.00
Q1-21 328.25 / 333.25
Q2-21 336.00 / 342.00
Q3-21 342.50 / 348.50
CAL21 338.25 / 344.25
Sing 10ppm GO INDIC
Sep20 50.40 / 50.54
Oct20 50.72 / 50.92
Nov20 51.09 / 51.29
Dec20 51.49 / 51.69
Jan21 51.97 / 52.17
Feb21 52.48 / 52.68
Q4-20 51.10 / 51.30
Q1-21 52.47 / 52.67
Q2-21 53.96 / 54.16
Q3-21 55.24 / 55.44
CAL21 54.30 / 54.70
ICE Gasoil 10ppm INDIC
Sep20 379.47 / 381.47
Oct20 384.08 / 386.08
Nov20 387.89 / 389.89
Dec20 391.79 / 393.79
Jan21 396.18 / 398.18
Feb21 400.48 / 402.48
Q4-20 387.90 / 389.90
Q1-21 400.19 / 402.19
Q2-21 409.00 / 411.00
Q3-21 420.94 / 422.94
CAL21 414.16 / 416.16
Rott Hi5 Sing Hi5
Sep20 55 66
Oct20 62 70
Nov20 67 72
Dec20 71 74
Jan21 73 76
Feb21 75 77
Q4-20 67 72
Q1-21 75 77
Q2-21 79 80
Q3-21 82 82
CAL21 84 85