PIRA Energy Group has said that the outlook for 2014 global oil demand growth needs to be revised down significantly. In the US this week, stocks have built for the seventh consecutive week. In Japan, crude stocks have drawn, but finished products have built.
- The outlook for 2014 global oil demand growth has been revised down significantly over the course of the year.
- Some deterioration of the outlook can be attributed to slower economic growth.
- The lion’s share of the discrepancy occurred in Japan and the US, the demand forecast for the developing world was almost perfect.
- The source of the forecast errors in Japan and the US appear to be for a number of reasons unrelated to longer term trends.
- Stocks built this past week for the seventh consecutive week of inventory builds that have uncharacteristically occurred in the middle of winter.
- Inventories are at all time highs of 119 million bbls.
- Crude stocks had the largest weekly build in over 10 years and are now 13.3% higher than last year.
- Product inventories are 9.4% higher than last year but the bulk of that is outside the four major products.
- Week ending January 16 ethanol prices tumbled to their lowest values since June 2005.
- Ethanol stocks were the highest and manufacturing margins were the poorest since January 2013.
- Ethanol production rose to 979 000 bpd.
- Ethanol inventories built by 158 000 bbls to 20.4 million bbls, the highest in nearly two years.
- Crude runs rose fractionally on the week and crude imports declined sufficiently to produce a crude stock draw.
- Finished product stocks built, with all the major products other than kerosene showing an increase.
- Demands on gasoline and gasoil were modestly higher, but stocks built for both due to a rise in yields.
- The kerosene draw rate throttled back on the week as yield rose and demand was slightly softer.
- Refining margins remained strong.
Read the article online at: https://www.hydrocarbonengineering.com/refining/27012015/oil-market-recap-end-jan-25/