Energy
The oil market saw a bit of a recovery yesterday, after the heavy sell-off earlier in the week. ICE Brent rallied by more than 3.9%, whilst WTI has settled back above the US$100/bbl level. Plans for a large Chinese stimulus package over 2H22 have proved positive not just for oil, but for the broader commodities complex. On the supply side, there remain risks around Kazakhstani oil flows, after a Russian court earlier this week ordered the halting of loadings from the CPC terminal on Russia’s Black Sea Coast. The court ordered a 30-day stoppage in loadings apparently due to violations on rules around oil spills. However, up until now Kazakhstan has said oil flows remain unaffected. The CPC terminal exports in the region of 1.3MMbbls/d of crude, and so this is a concern for the oil market, particularly at a time when there are already plenty of supply worries for the global oil market.
The EIA’s weekly US inventory report was fairly mixed yesterday. US commercial crude oil inventories increased by 8.23MMbbls, which is the largest weekly increase since early May. However, when factoring in releases from the SPR, total US crude oil inventories increased by just 2.39MMbbls. The build was driven by an increase in crude oil imports, which were up 841Mbbls/d WoW, whilst crude oil exports declined by 768Mbbls/d. In addition, domestic refiners decreased their utilization rates over the week by half a percentage point, which would have helped add to the crude build. However, changes to refined product inventories were more supportive. US gasoline inventories declined by 2.5MMbbls, whilst distillate stocks fell by 1.27MMbbls over the week.
|
