PIRA Energy Group reported that it believes that falling crude prices and the resulting pressure on margins seen by producers may provide less headroom for regulators to add additional costs to production via new or intrusive regulations. In the US, PIRA has reported large stock changes, crude build and product draw. In Japan, PIRA has said that typhoons have caused crude runs, imports and demand to be held back.
- The week saw the second largest weekly crude inventory build of the year at 1 million bbls greater than the product stock decline.
- Week on week product stocks fell as reported demand increased.
- Product imports declined.
- Crude runs dropped to the lowest level since the spring maintenance period.
- Crude inventory deficit narrowed while gasoline’s stock deficit increased.
- Distillate, kero-jet and residual fuel oil inventories are reportedly virtually identical to last year.
- Federal regulations with potential impacts on fracking production are still expected from President Obama’s Methane Strategy.
- US biodiesel assessments rose back above US$ 3 /gal., but most producers failed to cover cash manufacturing costs.
- Ethanol production dropped to 885 000 bpd for the week ending October 10.
- Ethanol stocks were down 295 000 bbls to a five week low of 18.4 million bbls.
- Crude runs eased back due to turnarounds and typhoon related impacts.
- Crude imports eased and stocks drew slightly.
- Finished product stocks posted a modest build.
- Gasoil demand was predictably lower, with higher yield, and stocks built modestly.
- Refining margins remain soft with all the major product cracks weakening.
- Global seaborne trade of LPG soared to record levels in September 2014.
- Total Middle East exports in September were approximately 3 million t.
- US exports for September were approximately 1.4 million t.
- Increasing US exports are the main driver pushing global waterborne trade to record levels.
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/21102014/oil-market-recap-pira-19-oct-14/