*OPEC Eases Oil Cuts
OPEC+ Joint Ministerial Monitoring Committee agreed on July 15 to taper production cuts from the current 9.7 million b/d to 7.7 million b/d from August. The main motivation behind this decision was confidence about recovering global demand, aided by seasonal consumption in many OPEC countries in the Middle East where peak power generation for air conditioning is largely fuelled by oil. As countries that exceeded their quotas in May and June by a combined 840, 000 b/d have agreed to make extra compensation cuts in the third quarter, the total addition of supply to the market would be of about 1.15 million b/d, or 43% less than the 2 million b/d headline figure.
*California’s Biggest Oil Driller Bankrupt
California Resources Corp has filed for bankruptcy after running into trouble after the dramatic falls in crude prices earlier in the year. This adds another major oil company to the list of those who have succumbed to the problems caused by low crude prices and the demand decimation of the pandemic.
*EIA Reports Drop in Crude and Product Stocks
Crude inventories fell 7.5 million barrels in the week to July 10 to 531.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop. The decline was driven by a steep drop in imports, which fell by a net 2 million barrels per day (bpd), the EIA said. U.S. gasoline stocks fell by 3.1 million barrels in the week, compared with expectations for a 643,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 453,000 barrels.