Low Chinese crude imports in June

ICE Brent prompt contract remained within a tight range close to 75.5 $/b, as there was little development on the OPEC+ side, confirming the tight bias of the market ahead of the summer. The Chinese June’s import data showed declining crude oil imports, at 9.7 mb/d, compared to the buying spree of last year, at 12.9 mb/d. Rising crude prices, amid weak domestic margins, likely incentivized refiners to draw on their stockpiles, at a potential rate of 0.58 mb/d. Despite concerns over the spread of the Delta variant in Asia, The Asian gasoline market continues to rally, as naphtha prices are hitting record levels, on the backdrop of a solid petrochemical demand. The two products are competing for the same feedstock, and are reporting significant gains in July. We expect today’s trading session to be driven by inflation hedge flows in the crude and refined product futures markets.