Bearish sentiment has taken hold of oil markets recently as fears of demand destruction and rumors of a new Iranian nuclear deal pushed prices down. Strong inventory draws in the U.S. have since sent prices back up, but downward pressure persists.
Oil prices had a nightmarish start to the week, plunging no weak Chinese economic data and rumors that an Iranian nuclear deal could come to fruition. Fortunately for oil bulls, hefty US stock draws across the oil and products spectrum have eased concerns that demand destruction is wreaking havoc on domestic demand. Both WTI and Brent have bounced back on the news.
OPEC blames politics for lack of spare capacity.OPEC’s new Secretary General Haitham al Ghais said it is policymakers and insufficient oil and gas sector investments that are to blame for the current streak of high prices, and not OPEC which has not been impacted by domestic pressures to stop oil projects.
US refiners brush aside recession fears, for now, OilPrice said. Arguingthere is little sign of demand destruction and that inventories are still below their optimal state, US refiners are expected to maximize refinery runs over the upcoming weeks, with analysts expecting a nationwide average of 94%, in line with Q2.
Drought cuts into European refining.Extremely low water levels along the River Rhine (vessels are touching the riverbed even if empty) have forced UK energy major Shell) to curb refinery runs at its 350,000 b/d Rhineland refinery, citing difficulties in transporting goods via the river.