Confirmation from Saudi Aramco received by at least two Japanese refiners that they will receive full volumes for July loading, showing a strong indication Saudi Arabia may not see the kind of cuts in crude volumes seen in June. There had been market talk of allocation cuts to Asia’s customers, market sources said.
The coalition's 9.6 million b/d output cut agreement recently extended by OPEC+ through July. The kingdom will hold its oil production to 8.49 million b/d under the deal. In the wake of recent demand recovery from the coronavirus pandemic, some Japanese refiners were seeking full Saudi crude allocations for July.
With domestic gasoline demand recovering to pre-state of emergency levels, Japan's crude throughput rose for the first time in seven weeks at the start of June. As several refineries are slated to be restarted from scheduled and unscheduled shutdowns, crude throughput was expected to increase further in coming weeks.
Domestic gasoline demand has been recovering in recent weeks during weekends following the lifting of the state of emergency to curb the spread of the coronavirus pandemic on May 25. Above the pre-state of emergency level of 4.72 million barrels over April 5-11, Japan's estimated gasoline shipments rose 7.5 percent to 5.04 million barrels in the latest week.
