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PIRA Energy oil market recap: Week ending 17th February 2014

Hydrocarbon Engineering,

For the week ending 17th February 2014, PIRA’s analysis of oil market fundamentals:


  • US oil commercial inventories increased in the week ending 7th February as crude stocks built and product inventories drew.
  • Product inventory declined week on week, but the decline was smaller than the prior week, largely due to a fall off in reported demand.
  • Higher product output was offset by lower product imports.
  • Extraordinary efforts taken to move propane from USGC to the Midwest and East Coast have had the desired effect of easing the spread between Mt. Belvieu and Conway prices.
  • Propane stocks are expected to end the heating season at quite a low level.
  • US ethanol output rose to a three week high of 902 000 bpd in the week ending 7th February, from 895 000 bpd during the preceding week.
  • Inventories increased by 323 000 bbls to 17.1 million bbls, the highest since July.


  • Final Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels was releases on 11th February. PIRA believes that implementation of the guidance will have limited direct impact on operations, however their issuance provides additional insight into the Administration’s approach to fracking.


  • Oil prices in Asia are expected to come under the increasing influence of global crude stocks building as refinery maintenance steps up.
  • Asian gasoline cracks are anticipated to improve seasonally.
  • Naphtha cracks have begun to ease and should decline further.
  • Gasoil cracks have held relatively firm, but lower demand should allow room for some easing, though turnarounds will limit erosion.
  • Fuel oil cracks have improved with lower Asian stock levels being seen in January.


  • Total commercial oil stocks were modestly higher with a build in crude outpacing a draw in finished products.
  • Crude runs moved modestly higher, but exports fell back and stocks built slightly.
  • Gasoil demand was lower.

Crude tanker markets

  • The Baltic Dirty Tanker Index doubled in mid-January from end of November 2013, to its highest level since 2008. Improvement was driven by an exceptionally strong winter rally in Atlantic Basin Aframax trades. However, clean tanker trades did not participate in the rally

Adapted from a press release by Emma McAleavey.

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