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PIRA Energy Group oil market recap: Week ending 25th August, 2013

Hydrocarbon Engineering,

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


  • US stocks fell for the week ending 16th August, split about equally between crude products and matching last year’s inventory decline for the same week. This left the inventory excess 1.9% above year ago levels. The bulk of excess inventory is in gasoline.
  • Overall adjusted oil demand growth is now running 0.9% above year ago levels. This is the second week in a row that demand growth was no higher than 1% after three earlier weeks of near 3% growth.
  • Some of PIRA’s other energy group indicators of economic growth (e.g. electricity demand) have also been weakening which is not a good sign for the economy.
  • US propane storage is building slowly, pushing prices higher into the crop during and heating seasons.
  • Butane demand will gain for gasoline blending while ethane continues to be impacted by steam cracker outages.
  • US ethanol prices rose in the week ending 16th August, due to higher corn costs and a tighter market with lower inventories. Prices were also supported by concerns that output will decrease prior to the next harvest because of plant maintenance and corn shortages.
  • RIN prices rebounded after falling to a three month low in the previous week.
  • US ethanol production declined to 844 000 bpd in the week ending 16th August 2013, the second lowest level since April, and down from 857 000 bpd in the week preceding.
  • Some ethanol producers have contracted to barge in corn from as far south as Louisiana where harvest has already started, due to supply shortages.


  • Asian oil prices remain at the top of their trading range with firmness supported by tightened crude balances, which are being fueled by supply losses from producers such as Libya and Iraq and ongoing shortages from Syria and Nigeria.
  • The market is currently at its maximum point of physical strength, with high runs, supply losses and crude stock declines.
  • Japanese crude stocks drew on higher runs and contained imports.
  • Gasoline demand was expectedly strong.
  • Gasoil demand eased sharply due to the typical mid-August vacation impacts and stocks built, even with higher exports.
  • Kerosene stocks continued to build, with the average build rate over the last two weeks being relatively high.

Adapted from a press release by Emma McAleavey.

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