Switzerland-based trading house Glencore said conditions for marketing oil were "more modest" in the first half of this year than the "exceptionally supportive" year-earlier period.
This strikes a notably different tone from the company's full-year report issued in March, when it said its oil marketing business was operating in "an attractive, opportunity-rich environment".
"Global inventories continued to build to historically high levels, for both crude and oil products, as we came into 2016 with actual carry costs in line with the premium implied by the forward curve. The premium narrowed in the second quarter as oil prices recovered," Glencore said today. It said oversupply is weighing on light distillates product markets and refinery margins are subsequently coming under "sustained pressure".
But Glencore still sold 37pc more crude and 30pc more oil products in the first six months of this year than it did in the same period a year earlier.
In its production business Glencore has again booked an impairment charge on its assets in Chad, where it has slowed drilling to preserve resources for when prices are higher. Glencore said the carrying value of the fields and blocks in Chad was impaired by $792mn. The company last year booked a $1.1bn charge on the same assets.
Production from Chad, and the company's operations in Equatorial Guinea, was lower by 18pc in the first half of this year than in the same period last year, at around 24,000 b/d. Revenue from Glencore's crude production activity fell by 38pc to $169mn from $272mn a year earlier. Operating profit fell by 42pc to $65mn from $112mn previously.
Glencore made a loss of $369mn in the first six months of the year, compared with a loss of $676mn a year earlier.
