Oil market recap: Week ending 14 June 2015

PIRA Energy Group has said that Brent crude prices lost their earlier upward momentum over the last few weeks with ongoing Atlantic Basin crude length. In the US, PIRA has reported slight stock decline over the week and in Japan, runs have dropped sharply and crude stocks have surged.

Europe

  • As crude stocks erode, prices will gradually strengthen.
  • Gasoline cracks are currently strong with declining inventories and increasing coverage requirements for local/export demand growth in the Atlantic Basin.
  • Gasoline cracks should remain very healthy for the next few months.
  • Diesel cracks will weaken, bottoming in July/August before seeing seasonal recovery.
  • Recent European refinery margin strength, the best in many years, will gradually erode.

USA

  • Crude stock declined this past week more than offset the product inventory increase, leaving stocks slightly lower.
  • This was the largest crude stock decline this year and it came as refiners ramped up runs to a weekly high for the year.
  • Gasoline stocks are now just 1.8% higher than last year, and recent demand is up 4.6%.
  • The increasing frequency of earthquakes in Oklahoma is becoming a growing concern for fracking.
  • NGL prices were broadly higher last week as the plunge in propane over the past several weeks was seen as overdone.
  • Ethanol prices were slightly higher the week ending June 5.
  • Ethanol manufacturing margins fell for the third straight week as coproduct DDG prices decreased.

Japan

  • Crude runs fell sharply reflecting a major refinery fire and ongoing turnarounds.
  • Crude imports rose and crude stocks surged.
  • Finished product stocks drew.
  • Gasoline demand rebounded with higher yield, and stocks posted a draw.
  • Gasoil demand eased with a surge in yield, and stocks posted a draw.
  • Indicative refining margins remain very good.

Edited from press release by Claira Lloyd

Published on 22/06/2015


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