PIRA Energy Group’s weekly analysis of oil market fundamentals has revealed the following:
- Commercial oil inventories build by 14.5 million bbls in the week ending 11 April, the largest weekly increase since 2009.
- Crude stocks gained 10 million bbls, the largest increase in over five years. Crude stocks have now moved above 2013 levels for the first time this year.
- US ethanol production reached an eighteen month high of 939 million bpd in the week ending 11 April, from 896 million bpd during the preceding week. This is the second highest output since January 2012.
- PIRA predicts that a weaker price environment over the next five years will prove beneficial to vessel operators by reducing bunker costs.
- Ethane usage has been impacted by a high level of cracker downtime.
- Overseas markets are seeing greater LPG usage.
February product demand
- The month on month decline in distillate and gasoline exports for February, in addition to the EIA’s export plug used during the month, resulted in upward revisions to calculated February US product demand.
- For distillate, February exports point to an upward demand revision close to what one would expect with the colder weather.
- For gasoline, February exports imply an added 190 million bpd to the demand rates reported.
- For crude oil, exports of 240 million bpd during February reflected a continuation of the recent high level of crude exports to Canada.
- Total commercial stocks rose 4.6 million bbls for the second week running.
- Crude stocks built 2.7 million bbls, with finished products rising 1.5 million bbls.
- All major product stocks built, with the exception of naphtha.
- Demand impairment continues from the 1 April consumption tax increase, although it is anticipated that the impact will soon diminish.
- The indicative refining margin was modestly higher and margins are still good.
Adapted from a press release by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/23042014/pira_analysis_410/