The Energy Information Administration reported Wednesday that U.S. crude inventories fell by 7.2 million barrels for the week ended June 26. That followed three consecutive weeks of increases.
Analysts polled by S&P Global Platts had forecast an average crude supply decline of 2.7 million barrels, while the American Petroleum Institute on Tuesday reported a fall of 8.2 million barrels. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by about 200,000 barrels for the week.
The decrease in U.S. supplies has injected some optimism in crude markets, which have been whipsawed by anxieties around the growing spread of COVID-19 and the impact of the contagion on crude demand.
https://www.oilandgas360.com/oil-prices-just-had-their-best-quarter-in-30-years-whats-next/
Oil prices registered their best quarterly performance in 30 years during the three months through to the end of June, staging a dramatic comeback after falling to record lows in April.
Source: CNBC
Brent crude futures skyrocketed more than 80% in the second quarter. It was the international benchmark’s best quarterly performance since the third quarter of 1990, when it registered gains of 142% during the first Gulf War.
U.S. West Texas Intermediate futures surged 91% in the three months through to end of June, also reflecting the best quarterly performance for U.S. crude since the third quarter of 1990 when it soared 131%.
However, despite notching extraordinary gains in recent weeks, both Brent and WTI futures are still down over 34% since the start of the year.
The IEA’s Executive Director Fatih Birol has reportedly said he believes 2020 may well come to be regarded as the worst year in the history of global oil markets, with April likely to be the worst month the industry has ever seen.
“I think obviously what we saw with the Covid crisis was unprecedented and, in oil markets, it was coupled with the dislocation of the supply agreement between Russia and the OPEC countries at the same time,” Martin Fraenkel, president of S&P Global Platts, told CNBC’s “Squawk Box Europe” on Tuesday.
Those two “massive” events impacting oil prices was “a once-in-a-generation coincidence, so I don’t really expect that again,” Fraenkel said.
https://www.oilandgas360.com/oil-barrels-come-off-the-water-as-storage-boom-at-sea-fades/
LONDON – Tens of millions of barrels of crude and oil products stored on tankers at sea due to the coronavirus crisis are being sold, in a sign fuel demand is recovering as lockdowns ease, shipping sources say.
Source: Reuters
Fuel demand tumbled as much 30% from March to May, with some surplus stored at sea as land storage filled up.
Crude held on tankers fell below 150 million barrels by the end of June, down from more than 180 million barrels in late April, IHS Markit estimated.
Refined products held on vessels dropped to 50 million barrels from a mid-May peak close to 75 million barrels, IHS said, adding gasoline stocks were the fastest to be offloaded.
“Volumes shown under floating storage can potentially drop rather fast during July,” Fotios Katsoulas of IHS said, adding there were several tankers off China waiting to discharge.
Demand for floating storage at the peak of the crisis was helped by a market contango, a price structure where cargoes for delivery in the shorter term are cheaper than those for later delivery, encouraging traders to store fuel until prices pick up.
As the contango has narrowed with rising demand, there is less incentive to store fuel.
In addition, OPEC, Russia and other allies, a group known as OPEC+, have curbed production and output from the United States and elsewhere has fallen, leaving less surplus oil to keep at sea, a more costly alternative to onshore storage.
“With output levels lower, this has reduced the need for storage on land and combined with a reduction in price contangos, there is less of an incentive to store crude at sea,” said Rebecca Galanopoulos Jones, with broker Alibra Shipping.
Clarksons Research estimated 218 million barrels of crude was held on tankers by June 26 from a peak of 290 million barrels in early May, while about 70.5 million barrels of oil products were stored versus a May peak of 100 million barrels.
“We believe floating storage is going to gradually decline from now and reach normal levels sometime during the autumn,” a spokeswoman with shipping group NORDEN said