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Oil market recap: week ending 9 November 2014

Hydrocarbon Engineering,


PIRA Energy Group has said that falling crude prices are likely to slow midcontinent production growth. In the US the stock excess versus last year has increased. In Japan, crude runs have fallen and imports have risen.

Storage

  • In the last month there has been a significantly smaller stock draw compared to the same time last year, despite of increasing demand.
  • There is currently a global imbalance of supply over demand, this year compared to last year.
  • The imbalance is apparent across the world.
  • For the winter, PIRA expect the surplus to manifest itself in smaller draws, which will be reflected in a creeping stock excess.
  • In the spring, it is anticipated that this surplus will appear as higher outright inventory levels.
  • For the past week, the stock excess versus the same time last year increased to 15.4 million bbls, and with a significant draw last year, the commercial excess should grow even more.

Prices

  • Crude prices fell lower in October with Brent falling by almost US$ 10/bbl.
  • In the absence of new supply disruptions, we are likely to see prices at or below current levels for the next several years, according to PIRA.
  • In the case of North American natural gas, the extremely strong growth in supply suggests that prices are likely to stay lower for longer.

USA

  • US propane inventories posted their second draw this heating season last week.
  • The small draw is thought to be influenced by a decline in both imports and in apparent demand.
  • National LPG stocks are now well poised to both supply the harshest of winters and an increasing export market.

Japan

  • Crude runs have eased to their lowest level since early July.
  • Crude levels rose and stocks built.
  • Gasoline and gasoil demands were modestly changed and both product stocks drew. The biggest draw was for gasoil.
  • Kerosene demand was relatively strong and stocks posted their first seasonal draw.
  • Refining margins are better with all the major product cracks firming.

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/11112014/pira-oil-market-recap-11-nov/


 

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