Despite lingering concerns over a global oil oversupply and weak Chinese economic growth, oil prices reversed losses to edge up early Monday morning as 73 percent of US Gulf of Mexico oil production was shut-in on Sunday due to tropical storm Barry, and Chinese data on Monday pointed to better than forecast industrial figures.
Nigeria continues to groan under heavy subsidy regime because she imports virtually all what the country currently consumed despite having four refineries that are not functional.
As of 06:08am EDT, WTI Crude was up 0.22 percent at $60.34, while Brent Crude was trading up 0.37 percent at $66.97.
Mele Kolo Kyari, the new group managing director of the Nigerian National Petroleum Corporation (NNPC), recently pledged to reverse the trend of petroleum products importation in the country by rehabilitating the existing refineries and encouraging private sector investment in the refineries sub-sector.
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“We must end the trend of fuel importation as an oil producing country. We will deliver on the rehabilitation of the four refineries within the life of this administration and support the private sector to build refineries. We will support the Dangote Refinery to come on stream on schedule. We will transform Nigeria into a net exporter of petroleum products by 2023,” Ky ari stated in his address at the occasion.
Gains were limited due to the headline Chinese data released earlier on Monday, showing that China’s economic growth in the second quarter of this year was at 6.2 percent, in line with expectations but the weakest growth in the country in 27 years.
China’s industrial output and retail sales in June, however, trumped analysts’ expectations, suggesting that the state of the industry is not as bad as the gloomiest forecasts had it, and that oil demand growth could be supported through the end of the year.
According to analysts at ANZ Bank, Chinese crude oil import growth so far this year looks impressive despite fears of a marked economic and oil demand growth slowdown.
“We believe additional crude oil quota( given) to private refine rs should keep imports up beat inh 2 2019,” Reuters quoted ANZ Bank analysts as saying on Monday.
Despite the lowest Chinese economic growth in nearly three decades, industrial data wasn’t all that bad and helped oil prices edge up early on Monday morning, with prices additionally supported by the fact that 72.82 percent—or to 1,376,265 bpd—of the current oil production in the U.S. Gulf of Mexico was shut-in as of Sunday in response to the tropical storm Barry.
Phillips 66, which had temporarily closed down its 253,600-bpd Alliance, Louisiana, refinery ahead of the storm, was getting ready on Sunday to restart the refinery on Monday. Most of the Louisiana refineries of major operators were operating normally on Sunday, refinery officials or sources told Reuters.
Meanwhile, the oil market saw a rather significant surplus in the first half of 2019, much larger than previously expected. looking forward, supplies are set to tight en in the second half of the year, but that may only be a hiatus before the glut returns.
