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Oil market recap: week ending 3 August 2014

Hydrocarbon Engineering,

PIRA Energy Group has said that Brent crude oil prices will possibly recover, although the company has lowered its forecast for the next few months. When it comes the US, PIRA has said that crude stock declined and in Japan, crude runs increased and stocks posted a modest draw.


  • PIRA has said that Brent prices will recover but the forecast has been lowered for the next few months.
  • Demand is expected to pick up seasonally and refinery runs are expected to pick up also.
  • Geopolitics is likely to further disrupt supplies, particularly in Libya and Iraq.
  • North Sea production maintenance is coming towards its August/September peak so production is to be disrupted.
  • US production will also be disrupted as hurricane season begins.


  • Over the week, crude inventories continued to decline and outpace the product stock increase.
  • Inventories currently stand 8 million bbls higher than the same time last year.
  • The tightest part of the barrel is middle distillates and PIRA report that crude inventories are also looking tight.
  • Propane inventories increased to 1.78 million bbls according to the DoE.
  • Propane inventories experienced lower builds which PIRA has attributed to increased export levels.
  • Propane inventories have been reported to be only 3 million bbls below the three year maximum for the year.
  • Ethanol inventories hit an annual high of 18.6 million bbls in the week ending 25 July.
  • Over the week production of ethanol has declined to 954 000 bpd.
  • Ethanol prices reportedly increased through most of July despite increasing production levels due to support from demand.
  • Japan

    • Refinery runs are on the up once more as maintenance activity slows.
    • Imports of crude have eased back and modest stock draws have been reported.
    • Stocks of finished products have risen slightly.
    • Gasoline demand experienced a rebound and neared 1 million bpd.
    • PIRA have reported that refining margins softened as all cracks began to ease with gasoline posting the largest drop.

    Adapted from press release by Claira Lloyd

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