The crude market posted losses in the mid-morning trading June 17, as the market continued to digest the news of a hike in interest rates by the US Federal Reserve and other central banks.
At 1238 GMT, ICE August Brent crude futures were down 50 cents/b at $119.31/b, while NYMEX July WTI futures were 98 cents/b lower at $116.61/b.
Although the crude market recovered somewhat in the early trading June 17, it fell again later, remaining well below the highs posted on June 14. The decision by several central banks to raise interest rates and supply figures is putting pressure on the market, sources said.
After recovering to some level in the early trading June
“Oil production in Russia is falling less sharply than had been assumed. And for another, oil production in the US and Canada is rising sharply,” commodity analyst Carsten Fritsch said in his daily note June 17.
Meanwhile, the middle distillate market remains strong, with stocks at critically low levels and crack swaps touching record highs.
The 10 ppm FOB ARA Barge Brent Crack Mo01, Jet FOB Barge Brent Crack Mo01, and the 0.1% FOB ARA Barge Brent Crack Mo01 all had hit record highs June 15, highlighting the tightness in the European products market.
Stocks of diesel and gasoil in the Northwest European Amsterdam-Rotterdam-Antwerp hub fell 3.15% on the week to 1.41 million mt in the seven days to June 16, according to Insights Global data.
Stocks were now 41% lower year on year.
The US Treasury Department on June 16 sanctioned Chinese, Hong Kong and UAE companies linked to Iran’s petrochemical exports to Asia. The move comes as talks to revive the Iran nuclear deal or the 2015 Joint Comprehensive Plan of Action continue to stall.
“The United States is pursuing the path of meaningful diplomacy to achieve a mutual return to compliance with the Joint Comprehensive Plan of Action,” Brian Nelson the current Under Secretary of the Treasury for Terrorism and Financial Intelligence said in a press release June 16.
“Absent a deal, we will continue to use our sanctions authorities to limit exports of petroleum, petroleum products, and petrochemical products from Iran,” he added.
The measures target companies that have ties to already-sanctioned Triliance Petrochemical Co. for facilitating sales of naphtha, butane, propane, methanol and other petrochemicals, S&P Global Commodity Insights reported earlier.
Meanwhile, oil refining in Russia may fall by 10% on the year in 2022, the TASS news agency reported, citing deputy prime minister Alexander Novak June 17.
Russia’s oil production, exports and refining have been significantly affected by its invasion of Ukraine and Western sanctions introduced in response to the conflict.
“This year we will have a reduction of 10%. Maybe there will be 250-260 million mt [refined],” Novak said June 17. This is equivalent to 2 million-2.2 million b/d using a conversion rate of 7.33 b/mt.
Source: Spglobal.com
