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Vitol CEO says global fuel markets are tight and inflexible
Refined product inventories are still drawing because refining capacity is constrained in the Middle East and Russia, while U.S. refineries ran near full capacity this summer.
Vitol chief executive Russell Hardy said global fuel markets remain very tight and inflexible, despite higher flows out of the Persian Gulf in recent weeks, speaking at the Asia Pacific Petroleum Conference in Singapore, according to OilPrice.
Hardy said refined product inventories are still declining, attributing the draw to insufficient global refining capacity to stop the reductions and to rebuild the surplus.
The Vitol executive pointed to constrained refinery output in the Middle East due to Iranian strikes on refineries, plus limited fuel movement through the Strait of Hormuz. He also cited disruption in Russia from frequent Ukrainian drone strikes on refineries, and Russia's ban on diesel exports until at least the end of September.
Hardy added that U.S. refineries have been operating at maximum capacity after maintenance delays this summer, with U.S. refinery utilization at 98% at the end of August, including peaks of 103.5% in the Midwest and 99.8% in the Rockies, citing EIA weekly petroleum status data.