CEM Report, Lagos
Prices of crude have been on the climb this week, with Brent crude rising from $38.32pb Monday and even touching $40 for the first time in months Tuesday. This was attributed to the expected OPEC+ plans cuts extension beyond June.
EIA report earlier in the week about growing fuel demand raised a consoling signal of recovery in major economies
The report shows that refinery runs averaged 13.3 million bpd in the last week of May in the United States, compared with 13 million bpd a week earlier, signaling the continued improvement in fuel demand as the North American country emerges from lockdowns
At the time of writing, Brent crude was trading at $39.99pb after gaining +0.5% in the late hours of Thursday. West Texas Intermediate was changing hands at $37.39 a barrel after gaining 0.05%.
Bonny Light on the other hand, sold at $38.24 per barrel rising by 0.92% from $37.89 per barrel it previously sold on Tuesday
Sustained sanguinity about continuous recovery of crude oil price is strongly hinged on the incremental ease of lockdowns which hope to increase industrial consumption of fuel.
As reported by Oil Price.com this week, China’s crude oil imports jumped by 13 percent from April to near record-highs of 11.11 million bpd in May. This is due to favorable spreads of the Shanghai-traded yuan-denominated oil futures and a ramp-up in refinery throughput. Oil analytics firm OilX said in a report this week.
There has been a steady recovery in Chinese refinery crude processing rates in recent weeks to warrant higher imports, but at least some of the increased crude intake can be attributed to the Shanghai INE crude futures trading at a premium over other deliverable grades, OilX said.
The report further stated while referring to Oilx report, that China’s imports from Saudi Arabia jumped by 800,000 bpd, following declines in the two previous months, while imports from Iraq surged by more than 400,000 bpd as the Basrah crude grade is one of the seven grades allowed under the Shanghai crude futures contract
Meanwhile, the Technical Meeting of OPEC and non-OPEC Countries participating under the Declaration of Cooperation (DoC) is being convened for the 7th time, via videoconference in Vienna. OPEC announced Thursday
“It is convening as usual in preparation for the OPEC and non-OPEC ministerial meetings within the established framework of the DoC.
“The technical meeting serves as a platform for OPEC and non-OPEC participants to discuss technical matters and deliberate on oil market conditions”. OPEC said
The agenda for this meeting is expected to border on technical consideration in sustaining the current oil production cut beyond the June deadline, the outcome of which will impact on the direction of oil price movement in the coming week.