Vitol CEO: Global Fuel Markets Are "Tight and Inflexible"
Vitol CEO: Global Fuel Markets Are "Tight and Inflexible" What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… Global fuel markets are very tight and inflexible, despite the higher flows out of the Persian Gulf in recent weeks, Russell Hardy, chief executive of the world's biggest independent oil trader, Vitol Group, said on Tuesday.
"It's pretty, pretty tight and inflexible out there as far as the market is concerned," Hardy told the Asia Pacific Petroleum Conference by S&P Global Energy in Singapore today, referring to the fuel market.
Globally, refined product inventories are "still drawing," Hardy said, as carried byBloomberg.
"We're still not running enough refining capacity to prevent those draws, and we keep eating into the surplus that exists around the world," Vitol's top executive added.
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The real stress in the oil markets is in the downstream, analysts say.
Despite the uptick in flows from the Strait of Hormuz, only 1 million barrels per day (bpd) out of an estimated 10 million bpd outbound flows are refined products, the rest is crude.
Refinery capacity is constrained in the Middle East, due to Iranian strikes on refineries and the trickle of fuel flows through Hormuz.
Moreover, refinery capacity in Russia is also severely restricted by nearly-daily Ukrainian drone strikes at Russian refineries, while Russia has banned diesel exports until at least the end of September.
Refineries in the United States have been running at maximum capacity this summer, having delayed maintenance.
At the end of August, the total refinery utilization rate across the U.S.
was 98%, with peaks of 103.5% in the Midwest and 99.8% in the Rockies, the EIA's weekly petroleum statusreportfor the week to August 28 showed.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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