Oil prices rebounded Friday morning on concerns that strengthening hurricane Harvey could disrupt US oil operations in the US Gulf. Production from platforms in the most likely affected areas have started to shut down in preparation for the hurricane, which is expected to hit the cost of Texas between Houston and Corpus Christi. Brent <LCOc1> was trading at $52.46/bbl as of 9:20 AM UKT, up by 42 cents from the previous settlement. WTI <CLc1> had moved by 35 cents up from the previous settle, standing at $47.78/bbl at the same time.
The latest PJK data showed that total oil product stocks in the ARA-hub rose by 70,000 mt to 5.5 million mt in the week ending August 18th. The largest weekly increase was posted by Fuel oil stocks, which were up by 231,000 mt to 1.1 million mt, exceeding last year’s levels at the same time by 30%, on lower exports, while we haven’t registered any shipments to Asia for the past two weeks. On the contrary, Gasoil stocks, which include Diesel and Heating oil, fell by 153,000 mt to 2.7 million mt, remaining below last year’s levels. Most units of Shell’s Pernis oil refinery in Rotterdam restarted operations following a fire at the end of July. One unit at Shell’s Wesseling refinery in Germany was shut down after a fire on August 22nd, but a restart of operations was already underway. Preem’s refinery in Gothenburg is expected to go on maintenance at the end of this month for seven to eight weeks, potentially adding more pressure to European distillate stocks.
Gasoline stocks were broadly stable last week, standing at 878,000 mt, around 17% below levels seen at the same time last year. Gasoline refining margins in Northwest Europe were supported this week by worries that hurricane Harvey could disrupt refining operations in the US, thereby resulting in higher exports from Europe to the US East Cost.
The Oil Research Team
Supply Chain & Commodities Research