- Kayrros reported a draw in global inventories outside the US while EIA reported a draw in US commercial crude stocks.
- The drop continues the trend of falling global crude inventories that Kayrros detected at the beginning of June, preceded by builds in April and May. Last week’s move erased a significant part of the Q2 2018 build in global crude inventories.
- Brent time spreads displayed large movements last week, with the 6m-1m time spread narrowing by over $1/b week-on-week, before correcting slightly.
- The Brent term structure was now relatively flat for the first five months as of the writing of this report, highlighting the significant shift in structure that took place last week.
- The lower than expected level of disruptions weighed on crude prices last week. With disruptions at such a low level, there is little increase in production to expect from the disrupted areas, and this adds to the significant reduction in spare crude production capacity worldwide.
Below is a recap of publications by Kayrros for the week ending July 13:
Kayrros measured a significant global draw in land crude oil inventories between July 2-9.
- Inventories in China showed the most significant draw since October 2017.
- In MENA, the main draws were measured in Algeria, Egypt, Libya, and Tunisia.
- Inventories also decreased in the Caribbean and LATAM. Draws in Aruba and Curacao drove the movement in the Caribbean, while Venezuela was the only country with increasing inventories in LATAM.
- Kayrros measured a draw in Cushing crude oil inventories from July 1 - 7.
The US Gulf and Venezuela drove 10-day floating inventories down despite material builds in China and Singapore & the Strait of Malacca – 30-day inventories decreased with draws in Europe and Africa.
The Elephant oil field resumed production while Sirte basin fields restart after the port reopenings.
- Production restarted at Elephant oil field for the first time since February 24 and is set to ramp up in the coming days according to the Libyan NOC.
- Following the resolution of the conflicts in Eastern Libya, major oil fields in the Sirte basin are restarting.
Total disruptions decreased on July 11.
- In Canada, the Syncrude oil facility remains down.
- Disrupted production has been estimated at 350 kb/d.
- 150 kb/d of production is expected to return to service mid-July while full production is only expected in early to mid-September.
- In Norway, hundreds of workers in the Norwegian North Sea went on strike affecting production and drilling operations.
- Shell closed production at its 24 kb/d Knarr field on Monday.
- According to a trade union involved, up to 2,250 workers could join the strike by the end of the week if a deal on pension rights is not reached.
- Disruptions in Iraq are low after production resumed at the Bai Hassan oil field on July 1.
- Disruptions in Algeria dropped slightly this week, while all the fields in Iran monitored by Kayrros are operational.
Article by Kayrros