• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 3 hours Oil prices going Up? NO!
  • 13 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 12 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 18 hours Oil prices going down
  • 21 hours Could oil demand collapse rapidly? Yup, sure could.
  • 2 days Could Venezuela become a net oil importer?
  • 11 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 2 days Oil Buyers Club
  • 18 hours Saudi Arabia turns to solar
  • 5 hours Kenya Eyes 200+ Oil Wells
  • 2 days Gazprom Exports to EU Hit Record
  • 5 hours Are Electric Vehicles Really Better For The Environment?
  • 20 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 1 day Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 19 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 10 hours OPEC soap opera daily update
Oil Inches Higher On Strong Crude Draw

Oil Inches Higher On Strong Crude Draw

Oil prices rebounded on Wednesday…

North Sea Crude Demand Grows As Inventories Drop From Four Month Highs

North Sea

Demand for North Sea crude is resurgent as inventories of the grade stored on ships docked around the world fall from four-month highs last week, according to a new report by Reuters.

Trading sources indicated that refineries in Britain have begun to process crude from storage, which has brought inventories down to 6 million barrels from 9 million last week.

Oil futures had been in contango for most of 2017, which occurs when near-term contracts trade at a discount to deliveries further in the future. Generally, a contango reflects concerns about near-term oversupply, but news of declining inventories suggests a tilt towards backwardation.

The market is still at the steepest contango since November, and buyers are storing the extra oil in plus-sized tankers. Reuters reports that a growing number of old oil tankers have been contracted out to store oil in Southeast Asia, which allows traders to pay for storage in hopes of selling their goods at a higher price at a later date. "Too much unsold oil is headed to Asia," Oystein Berentsen, managing director for oil trading company Strong Petroleum, said in a Reuters interview a couple of weeks ago.

Chinese refiners will begin consuming the extra oil in due course, analysts now say.

"Sentiment in the oil market remains morbid even though the physical market is perhaps showing some signs of emerging green shoots, thanks to Chinese teapots (refiners) slowly starting to come back to the market for crude," consultant Energy Aspects said.

Brent barrel prices have reached a two-week high in the past six days, surpassing the $47 mark in the longest stretch of consecutive gains since back in April. That was before OPEC decided to extend its 1.2-million-barrel output cut for nine more months, while allowing Nigeria and Libya to continue their production recovery.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News