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MNI Commodity Analysis: Higher Russian Refining Set to Obscure Cut Commitments


Executive Summary:

  • Russia has committed to a 500,000 bpd crude export cut in August, against a market backdrop hesitant to believe its 500,000 bpd production cut has been met, prompting a minor price response this week -even when combined with Saudi’s 1mn bpd production cut extension.
  • India may be reaching its limits on Russian oil purchases, while domestic fuel demand is slipping during the monsoon season. Meanwhile, Chinese buying appears to be filling stockpiles rather than signalling demand strength. A narrowing Russian crude discount may also test purchasing will for both countries.
  • Russian refining is returning from maintenance which should help pull crude volumes off the export market and instead bolster oil product flows out of the country in another move that will further complicate the understating of cut commitments.

Full piece here:

MNI Commodity Analysis - Higher Russian Refining Set to Obscure Cut Commitments.pdf

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