As of July 12th, EIA crude oil inventories decreased by 4.9 million barrels. Increased wildfires caused by hot and dry weather have impacted Imperial Oil's Kearl project.
Boosted by the drop in US crude inventories, Brent crude futures continued their rise in early Asian trading.
As of 12:00 Beijing time, the September contract price for Brent crude futures was $85.43 per barrel, up 35 cents from the July 17 settlement price, and the closing price for the contract on the day was up $1.35 from the previous day's trading.
The August contract price for WTI crude oil futures was $83.36 per barrel, up 51 cents from the July 17 settlement price, and the closing price for the contract on the day was up $2.09 from the previous day's trading.
The US Energy Information Administration (EIA) report showed that EIA crude oil inventories decreased by 4.9 million barrels last week, mainly due to the decline in inventories along the US Gulf Coast.
In the week ending July 12, EIA crude oil inventories fell to 440.2 million barrels, down from 445.1 million barrels in the previous week. In the past three weeks, crude oil inventories have cumulatively decreased by 20.5 million barrels, down from 17.2 million barrels in the same period last year. Inventories along the US Gulf Coast fell by 2.9 million barrels to 248.5 million barrels, the lowest level since the week of March 22.
EIA data also showed that, affected by Hurricane Beryl, refinery daily processing capacity in the US Gulf Coast region decreased by 0.286 million barrels to 9.12 million barrels/day, lower than the four-week rolling average of 9.22 million barrels/day, but higher than 9.03 million barrels/day in the same period last year. Refinery utilization in the region fell 4.3 percentage points from the previous month to 92.7%.
Hot and dry weather in Alberta, Canada has led to an increase in wildfire activity this week. According to the Alberta Wildfire Management Bureau, at least 125 fires are currently burning in the province, which is the largest oil and gas producing province, and less than half of these fires have been controlled. Officials have also issued heat warnings for northern areas of the province. One of the largest fires, MWF047, is about 12 kilometers west of Imperial Oil's Kearl project and about 70 kilometers northeast of the oil sand center of Fort McMurray. The company has restricted the number of workers on site as a preventive measure and told Agence France-Presse on July 17 that its operations have not been directly affected. The Kearl project had a production of 277,000 barrels/day in the first quarter and was one of the many major oil sands production projects in the region.
Peter Szijjarto, Hungary's Foreign Minister, said that Russia's Lukoil has halted crude supplies to Hungary. Urals crude oil is transported through the Druzhba pipeline system to the inland country of Hungary, where it is supplied to the Szazhalombatta refinery of Mol company with a daily processing capacity of 0.161 million barrels. Shipments in June were 0.108 million barrels/day (0.7 million tonnes/day), up 17% from the previous month and higher than the year-to-date average, indicating that supply problems only emerged this month. Crude oil supplies through the Druzhba pipeline system are not restricted by the EU's ban on Russian oil imports.
(The above content is from Argus, an independent international energy and commodity price assessment agency)