*Crude Back in Trouble*
Oil prices have continued their movements downwards as the markets digests the news of another US stocks build reported yesterday afternoon, as well as a resurgent virus in the United States. New infections are at new daily records in Florida, Texas and California. According to the EIA U.S. crude inventories rose by 1.4 million barrels to 540.7 million in the week through June 19, adding another weekly build to crude levels.
*US Refining Capacity Almost 19 mil bpd*
The refining capacity of the United States grew by around 1% last year to nearly 19 million barrels per day, which is a record. The report on the industry compiled figures from 135 refineries up to Jan 1st, but of course hasn’t taken into account the recent falls in production due to the virus disruption.
*Floating Storage Starts to Fall*
The numbers of tankers storing as floating storage has started to decline and prices recovery and production cuts take hold. This has caused spot rates on VLCCs to drop with increasing tonnage being returned to the market, as well as fewer cargoes due to the OPEC+ cuts. Rates have dropped to below $8/mt, after having been over $74/mt in mid March.