Commodity Flow: Brent tops $87

(MENAFN-ING) energy – EIA reports lower oil inventories

Brent ICE settled above $87/bbl for the first time since mid-April yesterday, before giving up some gains in today’s trading session. Threats to US oil supplies from Hurricane Beryl and an upbeat oil inventory report from the EIA helped oil make strong gains.

Recent reports suggest the hurricane is now disrupting U.S. oil production, with companies including Shell Plc, BP Plc and Exxon Mobil Corp evacuating some of their Gulf of Mexico rigs. About 73,000 bpd of federal offshore oil production is believed to be in the projected path of the storm, according to data from the National Hurricane Center and the Bureau of Ocean Energy Management.

Meanwhile, the weekly inventory report from the EIA showed that U.S. commercial crude oil inventories fell by 12.2 million barrels during the week, compared with market expectations for a draw of just 411,000 barrels. This was the largest weekly decline since July 2023. This leaves commercial crude oil inventories at 448.5 million barrels, the lowest level since March 22, 2024. Crude oil exports rebounded by 491,000 b/d weekly to 4 .4 million barrels over reporting. week after the reopening of the Port of Corpus Christi in Texas, the waterway that connects the nation’s largest crude oil export terminals to overseas markets.

In refined products, gasoline stocks fell 2.2 million barrels versus a draw of 636,000 barrels the market expected, while distillate fuel stocks fell 1.5 million barrels during week (higher than market expectations for a draw of just 395 thousand barrels) . Moreover, gasoline demand consumption rose on a four-week basis for the first time since July. Refinery activity rose during the week, rising 1.3% to 93.5% as of June 28, 2024.

Metals – LME to suspend delivery of nickel from Finland’s Norilsk plant

The London Metal Exchange (LME) is suspending nickel deliveries from its Norilsk Finland plant as products from the plant continued to be deliverable despite Western sanctions on Russian metals. No new deliveries of nickel cathodes and briquettes from the Harjavalta plant in Norilsk will be allowed starting October 3. The plant is a large producer of refined nickel, with a total capacity of 65kt/year.

In copper, Codelco said it was on track to meet its annual production guidance, despite seeing an annual decline in its output in the first half of the year. The company expects copper production to start recovering in the second half of the year and expects output to top last year’s level in 2024.

Agriculture – ISMA leaves sugar stock estimates unchanged

The latest estimates by the Indian Sugar and Bioenergy Manufacturers Association (ISMA) show that sugar stocks in India at the end of the 2023/2024 season are seen at 9.1 million tonnes, unchanged from its April estimate. Sugar stocks stood at 5.6 million tonnes at the end of the 2022/23 season. The group has estimated a sugar surplus of around 3.6 million tonnes for the aforementioned period, while 5.5 million tonnes are kept for domestic consumption until the start of the new crushing season (October 1, 2024). The group further urged the government to consider allowing export quota in the current season as production exceeds consumption in the country.

Recent data from the Ministry of Agriculture of Ukraine shows that domestic grain exports in the 2024/25 season (July 1) were 315 kt. The above includes wheat exports at 169 kt (vs. 9 kt seen last year) and maize exports at 142 kt (vs. 25 kt seen at the same stage last year). The increase in exports was largely driven by high opening stocks in the period mentioned above.

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