Hurricane Barry shook things up a bit during this year’s slack season, shutting more than half of oil and gas output in the Gulf of Mexico (some 1.1mbpd on a daily basis). By Tuesday-Wednesday, however, most port infrastructure, all affected GoM refineries including Philips 66’s Belle Chasse Refinery, as well as lightering operations went back to business as usual. As hurricane fears subsided, rumors about a potential rapprochement between the US and Iran, set in motion by Iranian Foreign Minister Javad Zarif claiming to be ready to negotiate their defensive missile program, have pushed crude prices downward. With no other major factors to counteract bearish sentiments, the most recent oil rally seems to have fizzled out.
There is still room for minor rebounds, as the Wednesday morning trading session proved when crude prices partially retrieved the previous day’s losses on news that the US crude inventory drawdown was smaller than expected. But oil prices collapsed once again in the afternoon, with WTI and Brent falling to $57.16 and $64.13 respectively.
1. US Crude Exports to China Bounce Back
- The relative lull in the US-China trade war has allowed US crude exports to China to reach a 14-month high this month, but price developments indicate the buying interest will fade for August-September loaders.
- The root cause for this influx of US crudes into China is the arb opening in May-June 2019, the WTI-Brent spread…