2024.08.06

 Oil prices rise on Middle East turmoil despite economic stagnation fears

Oil prices increased in early Asian trade on Tuesday, reversing the previous session’s losses. This rise was driven by concerns that escalating conflict in the Middle East could disrupt supplies, outweighing fears of a potential U.S. recession impacting demand. The increase followed an attack on a U.S. military base in Iraq, which injured several U.S. personnel, and the recent killing of senior Hamas and Hezbollah members. U.S. West Texas Intermediate crude futures rose by $1.18 to $74.12 per barrel. On Monday, both WTI and Brent benchmarks had fallen by 0.7-0.8% due to a global stock market selloff, though worries about potential Iranian retaliation limited the decline.

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Venezuela’s Oil Exports Plummet in July Due to Operational Outages

In July, Venezuela’s oil exports dropped significantly due to outages in crude processing units, leading to reduced stocks and increased delays in loading cargoes. Despite previous recovery aided by U.S. licenses, domestic issues caused exports to fall to the second lowest monthly level this year. A total of 38 cargoes departed, averaging 585,600 barrels per day (bpd) of crude and fuel, and 266,000 metric tons of oil byproducts. This represents a 26% decrease from the previous month and a 33% drop from July 2023. The U.S. received the largest share of exports at 281,260 bpd, followed by China with 231,400 bpd. Operational interruptions are due to equipment malfunctioning for outage left

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Protests Disrupt Oil Production at Libya’s Sharara Field

Oil production at Libya’s Sharara field has been reduced by 60,000 barrels a day, about 20% of its capacity, due to ongoing protests. The field, operated by a joint venture including Libya’s National Oil Corporation (NOC) and several international companies, has frequently been targeted by local protesters. A video posted by Libyan television channel Almasar showed protesters threatening a full shutdown if their demands are not met. The protests have led to repeated disruptions in Libya’s oil output, which has been unstable since the country’s division in 2014.

According to Bloomberg, production was completely halted on Monday.

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Japan increase gasoline imports due to maintenance and power outages.

Japan’s gasoline imports rose by 20.4% in June due to refinery outages, reaching 476,630 kilolitres.

Imports are expected to exceed 120,000-130,000 barrels per day in July and August due to ongoing maintenance and outages.

Higher imports from Japan are expected to tighten gasoline supplies in Asia, supporting refiners’ margins.

Despite the current surge, overall gasoline consumption in Japan is projected to decline by 2-3% annually through 2028 due to a shift to next-generation vehicles.

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Trafigura Acquires French Refinery and Terminals

Trafigura, through Rhone Energies, has signed a deal to acquire the Fos-sur-Mer refinery and two terminals from Esso. This acquisition is seen as a significant milestone, pending regulatory approvals expected by the end of October. The refinery has a crude oil processing capacity of 140,000 barrels per day. Trafigura plans to  minimum 10-year exclusive deals to supply crude to the refinery and buy its oil products, involving its own and chartered-in dirty and clean tankers.