PIRA Energy Group has said that Cushing crude stocks are building on a tight LLS-WTI spread. In the US, there was a rare December stock build. In Japan, crude stocks drew at year end and remained low as the new year began.
- Preliminary weekly data are pointing to a 23 million bbl December 2014 inventory build.
- The US did not draw inventories in the fourth quarter, nor did the three major OECD markets combined.
- The creeping stock surplus has already become quite apparent, and there will be more to follow.
- The fear of what lies ahead is damaging to an already extraordinarily weak demand for inventory, which will have to cope with increased inventory supply.
- A rare bullish catalyst will being with index rebalancing, which should lead to net new purchases of some 60 million bbls of crude.
- Ethanol prices remained above gasoline values although the premium narrowed.
- Ethanol manufacturing margins declined for the fifth straight week.
- Ethanol production fell to an eight week low.
- Inventories increased by 751 000 bbls to a 96 week high of 18.845 million bbls.
- Two weeks of data were reported this past week.
- Crude runs rose at year end and then fell back.
- Crude stocks drew at year end and remained low as the new year began.
- Gasoline demand jumped higher due to the holidays and then eased a bit.
- Gasoil demand was slightly weaker at year end and then plunged as the new year began, with economic activity off for the holidays.
- Kerosene demand posted a strong draw at year end and then a contra seasonal build.
- Refining margins remained relatively strong.
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