By Justice Derefaka (Technical Adviser on Gas Business and Policy to the Honorable Minister of State for petroleum Resources)
Oil prices lost about 1% on Friday as the economic recovery worldwide runs into stumbling blocks due to renewed coronavirus lockdowns and on worries about rising crude supply.
The euro zone’s economic recovery from its deepest downturn on record stalled this month as pent-up demand unleashed by the easing of lockdowns in July dwindled, a survey showed. India’s crude oil imports fell in July to their lowest level since March 2010, while U.S. motorists drove 13% fewer miles in June than a year earlier, according the U.S. Department of Transportation.
Libya’s national oil company said it could restart oil exports after the North African country’s internationally recognized government in Tripoli announced a ceasefire, putting further pressure on oil prices. This is coming at a time that the market that can’t afford to absorb any additional barrels it’s problematic for the global supply situation .Those barrels would add to the output from OPEC+, which consists of the Organization of the Petroleum Exporting Countries and allies, including Russia. That group has been focused on ensuring members that had overproduced against their commitments would cut output.
The market rocks as storms closed in on the Gulf of Mexico, shutting more than half the region’s oil production, although prices were capped by ongoing concerns about fuel demand being sapped by coronavirus lockdowns.
On Sunday, Hurricane Marco and Tropical Storm Laura tore through the Caribbean and Gulf of Mexico, forcing energy companies to pull workers from offshore platforms and shut down oil output. (Producers had shut 58% of the Gulf’s offshore oil output and 45% of natural gas supply on Sunday. The region accounts for 17% of total U.S. oil production and 5% of U.S. natural gas output.
In Nigeria, the market took steps to start trading October barrels with the release of more loading programs. Average daily loadings of , Akpo, Amenam, Egina, Erha, Qua Iboe, Usan and Yoho are all set to decrease, according to programs seen by S&P Global Platts. Meanwhile, a large volume of September-loading crude remained available, in addition to cargoes of Forcados and Qua Iboe loaded in August and floating, sources said. Amid reduced demand from key buyers in Asia and Europe, some of that September-loading volume would likely end up in storage, supported by the contango in oil prices, sources said. Shipping fixtures seen by Platts showed evidence of that trend, with Mercuria fixing the SKS Skeena for Qua Iboe to Saldanha Bay in early September. South Africa’s Saldanha Bay is a frequent destination for storing West African crude. The strategic storage site, with a capacity of around 50 million-55 million barrels, is located between the demand centers of Asia and Europe. Some 33.69 million barrels were in storage in Saldanha on Aug. 21, according to commodity data company Kpler. Before June of this year, inventories at the site had not been as full since August 2017.
Demand for road fuel in the UK rose 1% in the week to Aug. 20, putting sales at 88% of pre-lockdown levels, Department for Business, Energy and Industrial Strategy data showed. The seeming plateau of the recovery in fuel demand came amid growing about the impact of local lockdown restrictions on travel in European countries. Despite that, gasoline inventories in the Amsterdam-Rotterdam-Antwerp trading area were 5% lower in the week to Aug. 19 at 1.398 million mt. The drawdown in stocks came as exports from the region to West Africa rose sharply, while exports to the US Atlantic Coast were 20% lower in the week to Aug. 20, at 1.38 million barrels, according to commodity data company Kpler.
Prices are as follows:
(1)Dated Brent =$43.57/ bbl (-0.805)
(2)Bonny Light =$42.945/bbl (-0.895)
(3)QuaIboe =$42.695/ bbl (-0.895)
(4)Forcados =$43.045 /bbl (-0.895)
Premium unleaded pms= $398.25/mt (-2.5)
0.1% Gasoil= $357.75/mt (-10.5)
Clean Tanker freight UKC-WAF= $16.68/mt (0)
Stay Safe and have a wonderful week.