CQG News | Market Summary: July 18, 2021
Summary
The resurgence of the COVID-19 virus with the emerging Delta variant, relatively soft inventory numbers that showed significant reductions in refined product demand in the week after the 4th of July holiday and what appeared to be lack of resolution among participants to the OPEC+ agreement all served to weigh on prices. This reduction is due in large part to increased import flows as well as relatively high utilization rates which were unchanged on the week at 91.8% of capacity. Shipping data does indicate a slight reduction in the flow of exports which leads us to believe that US Crude inventories in the US will drop in the coming week by 3.0 to 3.5 MB. The anticipated increase in demand, stable production and a slight reduction in exports should result in Distillate inventories also remaining within 500 KB of unchanged in the coming week. We suspect the outcome will be positive due to the fact that the discord caused by the rift between Saudi Arabia and the UAE was brief and that the other 21 participants to the agreement will realize how quickly prices can soften if production discipline is lost.
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