Demand for oil in Europe down due to refinery woes

London

CARGOES of crude oil are struggling to find buyers in Europe as demand from refineries falters due to unplanned halts. Recent strikes at French refineries and the continued abundance of inventories mean that demand for cargoes of newly pumped crude is weakening, according to DNB Markets and JBC Energy GmbH.

That is apparent in the price structure of derivatives linked to North Sea oil, where contracts for immediate delivery have been getting cheaper relative to later cargoes, broker data compiled by Bloomberg show. "From a physical perspective, the market is very bearish," said Eugene Lindell, an analyst at Vienna-based consultant JBC. "From a seasonal perspective, you'd have peak European crude intake in July and August" and refiners should be preparing for that, but "that's not what we're seeing".