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PIRA Energy Group analysis: Week ending 13th April 2014

Hydrocarbon Engineering,

PIRA Energy Group’s weekly analysis of oil market fundamentals has revealed the following:


  • Oil prices are likely to find increasing support moving forward as the worst of the spring crude stock is almost past.
  • Gasoline cracks will improve seasonally.
  • Gasoil cracks should hold up with ongoing turnarounds and then higher demand, especially in the third quarter.


  • Total commercial stocks rose 4.6 million bbl due to a 4.9 million bbl build in crude.
  • Finished product stocks were slightly lower.
  • All major product demands decreased, as an increase in the consumption tax came into effect on 1 April. This increase is likely to keep demands abnormally low in coming weeks and produce adverse demand comparisons to last April.


  • It is becoming increasing likely that the next location of significant shale liquids growth will be in Canada. Resource potential suggests that production volumes will grow substantially. There will be obstacles to growth including cost pressures, water management, takeaway infrastructure limits and environmental concerns that will slow progress.


  • US stock building occurred at a faster pace than last season, however propane inventory comparisons will remain much lower year on year.
  • Propane exports will grow during the course of the year as a new terminal capacity is added.
  • Near term ethane usage is affected by a relatively high level of cracker downtime.
  • There has been a sharp escalation in spot international freight costs that is adversely affecting trade economics.
  • Ethanol prices fell last week as plant output increased sharply, leading to a stock build for the second consecutive week. At the same time, prices had reached a high enough premium over gasoline that companies reduced the percentage of ethanol blended fuel to the lowest level in approximately eight weeks.

Adapted from a press release by Emma McAleavey.

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