Monthly Oil Report - Market Summary July 2010

| JULY 2010 | SOURCE: Monthly Oil Report

A 300,000-bpd build in reported onshore stocks of crude and products last month left them just 5 mn bbls below last year’s record highs. Crude stocks fell slightly as refinery throughputs revived after spring turnarounds, but at the end of the second quarter they were still 14 mn bbls up on a year earlier.The additional output from refineries added over 450,000 bpd to product inventories, which are rising seasonally.The rate of increase, though, is slower than at this time last year and reported product stocks at the end of last month were 20 mn bbls down on June 2009.

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Crude stocks fall but are still high
The offshore stockpile, however, is gradually declining. Almost 20 mn bbls of crude and 8 mn bbls of products were reported sold out of floating storage last month, taking the total draw since January to 50 mn bbls. A narrower prompt premium in the European gasoil market encouraged a draw on distillates stored in tankers off northwest Europe and Iran began to clear its large stockpile of unsold crude cargoes, which had built up in the Gulf during April and May.

The Atlantic Basin is now holding most of the surplus crude after turnarounds cut demand from Asian refiners in the second quarter, pushing more crude west. While higher throughputs in Europe and the US absorbed some of the extra supplies, crude stocks in the two regions rose by 140,000 bpd in the second quarter. At the end of last month they were 15 mn bbls up  year-onyear and at the highest June level for at least 20 years.