PIRA reports that Asian oil markets are fundamentally supportive but Atlantic basin imbalances still remain. Also, US crude stocks have built, but Japanese crude stocks have drawn slightly.
Global
- Crude oil prices have come under pressure once again.
- Stock builds have been largest than anticipated because refinery runs have been lower as margin pressure has lasted longer.
- Asian middle distillate cracks have held up relatively well and demand strength should continue to be supportive.
- Crude markets in Europe are quite weak with a substantial overhang of North Sea barrels pressuring spreads, especially with the recent sharp increase in long haul freight.
USA
- US crude stocks built for the week ending 18th October.
- Colder weather has arrived in the US and will help pull propane stocks yet lower.
Japan
- Due to typhoons, Japanese runs dropped back further, but should soon start turning higher.
- Implied crude imports stayed low and crude stocks drew slightly.
- Gasoline demand was relatively strong.
- Gasoil demand fell back, but was relatively strong, with lower yield that drew stocks.
- Refinery margins remain soft.
Ethanol
- US ethanol prices advanced during the week ending 18th October.
- RINs stabilised after a raft EPA memo lowering the 2014 biofuels mandates sent values plummeting during the previous week.
- Production soared 987 000 bpd in the US for the week ending 18th October.
- Output was up 3.2% from 869 000 bpd in the preceding week.
Adapted from a press release by Claira Lloyd.