Oil market recap: Week ending 10th November

Brent crude prices are likely to be poised to move back higher according to the latest figures from PIRA Energy Group. Also US product stocks declined this week whilst Japanese crude stocks jumped.

USA

• Strong product demand and an extraordinary decline in product output pulled product inventories down for the week ending 1^st November, the largest product stock decline of the year.
• Gasoline output decline was largely due to a DOE adjustment of inventory from finished to blending components.
• Commercial stocks fell as the crude inventory increase moderated.
• Gulf crudes are currently weaker compared to Brent with building US inventories but should improve relatively over the next month.
• Refining margins in the US are healthy with advantaged crude pricing.
• Lower gasoline prices are helping to sustain the recovery in US light vehicle sales and boost the market share of light truck sales which should have positive implications for gasoline demand growth.
• The US economy is broadly displaying good growth on a host of fronts.

Japan

• Crude imports took a big jump on the week. This has lead to a large crude stock build despite higher runs.
• Gasoil stocks drew to another record low.
• Kerosene demand was surprisingly strong for the time of year.

India

• The Indian economy has recently faced a triple whammy of a falling currency, accelerating inflation and weakening growth.
• Currency situation has made oil imports more costly, and this has contributed to a recent slowing in oil demand growth.
• Oil demand should begin to see improvements, as long as the macro stability continues.

Ethanol

• US ethanol prices decreased to a three year low during the week ending 1^st November due to higher output and lower corn costs.
• Falling gasoline values were also a drag on the market.
• US ethanol production fell the week ending November 1^st, dropping from an annual high the preceding week.

Adapted from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/12112013/10th_nov_pira_recap/