Swings and roundabouts, what more can you say. After last week’s massive drop – last week witnessed the biggest day-to-day decline of 2019 – oil prices were rising again in the first half of the trading week. The US came out of the long Memorial Day weekend with news about Cushing being flooded, raising the stakes for refiners and transportation companies alike. As US refineries get ready for the summer driving season (on the back of a pervasive heavy crude shortage), the negative impact of shutting down refineries along the rivers of Arkansas and Mississippi runs quite high. Concurrently, the US-China trade war rages on, as do speculations about the future of the OPEC+ production cut agreement.
On Wednesday, China’s claim that it would use pressurize the US in the sphere of rare earth metals pushed global benchmark Brent back on the defensive, with Brent trading in the 66.8-67 USD per barrel interval, whilst WTI traded around 57.2-57.4 USD per barrel.
1. South Korean Government Subsidizes non-Middle East Purchases
- South Korea extended its freight rebate option for domestic refiners until 2021, in a move that underpins Seoul’s willingness to insulate its firms from sanctions-entailed losses.
- The rebate amounts to 2 USD per barrel, effectively making nullifying the freight differential on intercontinental arb supplies.
- The rebate initially started as a means of weaning South Korea off its dependence…