*OPEC’s Oil Basket Above $40*
The collective prices of OPEC oil grades have pushed above $40 for the first time in four months. This falls in line with the slow-moving bullish sentiment that has been seen over the past couple of months as crude recovered for its lows in April.
*US Lifts Some Venezuela Shipping Sanctions*
The United States has lifted sanctions on a handful of shipping companies that it had accused of transporting Venezuelan oil this year. The meeting between industry representatives and US officials agreed to lift sanctions on the companies as long as they committed to not doing business with Venezuela while President Maduro remains in power.
*Virus Still Threatening Struggling Refineries*
The pandemic has caused a huge collapse in demand for oil products and has disrupted the operations of the refining industry. With some recovering demand coming back into the market there are still struggling refineries for which this is too little too late. Some capacity will be moved to the production of biofuels, but many older or less productive refineries face closure.
*US Rig Count at Record Low*
The number of oil and gas rigs in the United States has fallen for a 9th straight week to an all time low of 263. For context, this time last year the rig count was at 700, a fall of 73% to today.
*Marine Fuel Faces Depressing Q3*
As increasing supplies of fuel oil enter the market, it is expected that the marine fuel business is going to face a tough Q3 without an equivalent increase in demand. Supplies are estimated to increase by 620,000 bpd, with the main increases in production form China and Brazil. This new supply is going to hit markets that already have all time high storage levels in key bunkering hubs. Supplies in Europe and UAE are at all time highs, and in Singapore at three-year highs.