Crude oil futures recouped morning marginal losses during midafternoon Asia trade July 19, as investors weighed talks about a recovery in China’s refined products demand against a potential restoration of Libyan oil production.
The ICE September Brent futures contract rose 63 cents/b, or 0.59%, from the previous close at $106.90/b at 3:24 pm Singapore time (0734 GMT) July 19 while the NYMEX August light sweet crude contract was up 74 cents/b, or 0.72%, at $103.34/b.
China’s gasoil, gasoline and jet fuel exports in June dropped to a seven-year low of 1.58 million mt, or 426,000 b/d, despite new quota allocations, showed data released July 18 by the General Administration of Customs.
The June volumes represented a 66.7% year-on-year slump and a 10.7% month-on-month decline, far below the market’s estimation of up to 3 million mt exports. GAC data showed that the previous export low was 899,000 mt in February 2015.
Market analysts remained optimistic about China’s recovering demand that could ease off an inventory pressure, offsetting the need to export more barrels to international markets.
High temperatures during summer have been pushing up demand for air conditioning, raising expectations that more gasoline and gasoil will be burned as retail prices fell recently, they added.
Also, refinery sources from Sinopec and PetroChina said their headquarters have been limiting the export of oil products, and said they expected to see recoveries in the short term although not strong rebounds.
Meanwhile, Libya, which replaced the board of state-owned National Oil Corporation, is loading its first cargo of condensate since the lifting of force majeure from all ports and fields. However, the legitimacy of the company’s new leadership remains contested.
In a July 17 statement on its new Twitter account, NOC said the Italian-flagged tanker Ibela had entered the Brega oil terminal to load the cargo.
The Libyan oil ministry confirmed the loading, saying in a statement that Ibela’s arrival signaled the official resumption of oil exports after nearly a three-month closure.
NOC declared June 30 force majeure on crude exports from the 250,000 b/d Es Sider and 200,000 b/d Ras Lanuf terminals, as well as at the El Feel oil field, S&P Global Commodity Insights reported earlier.
“Exports could be back to full capacity later this month as the political backdrop stabilizes and a new board of the National Oil Corp takes charge,” said ANZ Research Analysts Brian Martin and Daniel Hynes in a July 19 note.
Source: Spglobal.com