Oil market recap: week ending September 7

PIRA Energy Group has said that in the US there has been a slight stock build while in Japan, crude stocks have drawn and finished product stocks are continuing to rise.

China

• Growth in China’s oil demand has been extremely volatile recently.
• On a quarterly average however, demand growth has been relatively stable and has tracked the path of GDP increases.
• Physical indicators of oil demand have also been increasing recently.

GDP

• GDP growth must be over 2.5% for there to be positive oil demand growth.
• PIRA believe that in the US a GDP threshold of 2.1% is reasonable for oil demand growth and in Europe, 2.3%.
• In the long term, PIRA believe US GDP growth will be 2.7% /y to 2020 and oil demand growth will be 0.4% /y.
• In Europe GDP growth will be 1.8% /y to 2020 and oil demand growth will be 0.5% /y according to PIRA.

Japan

• Runs continued to increase with a still lower crude import rate that mean crude stocks could draw.
• Finished product stocks continued to rise.
• Gasoline and gasoil demand dropped, and stock builds were in the range of 400 000 – 500 000 bbls for both.
• Kerosene stocks continued to build in line with seasonal levels.
• Refining margins remained poor however, there were small improvements in gasoline and gasoil cracks.

USA

• Overall inventories built last week, so stocks are just 3.2 million bbls above levels at the same time last year.
• The product stock build hit 2.4 million bbls due to strong product demand which offset a one week surge in product imports.
• Crude stocks drew 1 million bbls less than the week before, and this has been attributed to the decline in run rates.
• Refinery margins are great and refiners have been running more crude than over the same four week period in 2013.
• LPG prices rose higher last week despite sharply lower crude oil prices.
• Ethanol prices jumped the week ending August 22 after the DOE reported a big inventory draw the prior week.
• Ethanol production was less than expected.
• Ethanol blended gasoline output was higher than expected.
• Ethanol inventories increased to 17.7 million bbls up 356 000 from the week before.

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/09092014/oil-market-recap-week-end-7-sept-14/