PIRA Energy Group have said that October’s oil demand weakness is deceptive and product demand will soon get a substantial lift to propel refining margins higher. The group have also said that over the past week US commercial oil stocks fell, while Japanese crude runs have begun to rise and crude stocks have begun to build.
Worldwide
- PIRA believe that global GDP growth will accelerate next year.
- PIRA also believes that with tail risks minimised and fiscal constraints declining, the risks to growth are to the upside.
- October turned out to be warmer than both the 10 year and 30 year norm for all three major OECD markets.
USA
- US commercial inventories fell the week ending 25th October.
- Crude oil stock increases will begin to moderate and turn into inventory declines as imports decline and runs increase in November.
- Competition for LPG is intensifying and a frenzy is occurring in the US mid continent as farmers seek propane for drying the quite large and wet corn crop.
Japan
- Runs have begun to rise and implied crude imports moved higher building crude stocks.
- Gasoline demand decreased and stocks built slightly.
- Gasoil demand in the country increased.
- Kerosene demand was surprisingly strong and produced a small stock draw.
- Refinery margins remained soft.
Ethanol
- US corn and ethanol prices declined in October, as was expected.
- Ethanol manufacturing cash margins remained healthy as the market was tight with four year low inventories.
- US production rose for the third consecutive week, surpassing 900 000 bpd for the first time since June last year.
Biofuels
- World biofuels production was flat in 2012.
- Growth in production has resumed this year, boosted by increases in Brazilian ethanol manufacture and US biodiesel production, along with modest gains in other countries.
Adapted from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/05112013/oil_market_recap_3rd_november/
