PIRA Energy Group has said that Aramco formula crude prices for February have cut for Asia and Europe, but rose for the US. Meanwhile, crude stocks have lowered and tanker markets have hit new highs.
Over the next 6 months it is anticipated that above average turnaround related refinery downtime will be experienced.
- Formula pricing adjustments for the key markers were lowered for Asian and European destinations. The reductions for Asia were greatest on lighter grades, though there was also a reduction on the Arab Heavy differential.
- European pricing reduced, although less aggressively than for Asia. The largest reduction was on the heaviest grades.
- Total crude inventories fell, with the entire decline occurring in crude oil.
- Product inventories increased as crude runs stayed at an extremely high rate.
- Compared to the same week last year, stocks fell so the year on year stock deficit narrowed.
- US propane storage continues to fall to record low levels, especially in PADD 2.
- Extremely cold weather is causing production and logistical bottlenecks pulling demand higher.
- Relatively warm weather overseas, especially in Europe, falling crude prices and the arrival of cargoes from the US Gulf Coast (USGC) and West Africa have been pulling international LPG prices lower.
- US ethanol blended gasoline production reached an all time high during the week ending 20th December.
- Ethanol prices were mostly higher in the holiday shortened week ending 27th December, and manufacturing margins rose for the first time in three weeks.
Rates for most crude trades hit new highs for the year in December, exceeding earlier expectations by a wide margin. Recent seasonal improvement in tanker rates reflects higher global refinery runs, which rebounded strongly from autumn maintenance, increasing by 3.8 million bpd from October to December, with 2.4 million bpd of the increase in the Atlantic Basin. Tanker markets in the Atlantic Basin also benefited from weather and strike related delays in December.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/08012014/pira_energy_group_analysis_5th_january_23/