Oil Inventories Higher, Crude Demand Lower: PIRA

By George Backwell
Wednesday, September 03, 2014
Oil tanks: File image

NYC-based PIRA Energy Group reports that oil inventories are higher and crude demand is lower. In the U.S., stock surplus to last year is roughly flat. In Japan, crude stocks draw amid peak run rates. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

World Oil Market Forecast

Oil inventories are higher, crude demand is lower and PIRA is beginning to question the expected 2H 2014 and 2015 lift off in economic activity. Also, add in unrelenting upward revisions to U.S. oil supply growth with non-OPEC supply additions continuing to substantially outpace demand growth and you have a combination of factors pointing to lower prices.

Stock Surplus to Last Year Roughly Flat
This past week’s inventory increase kept the year-on-year overall stock surplus to around 4 million barrels. The crude inventory decline took crude stocks slightly below last year, and at current high run rates crude stocks are still relatively tight, which was reflected in September relative prices. The product stock change reflected lower product imports (to a new low for the year) being offset by weaker reported demand and higher product output.

Japanese Crude Stocks Draw Amid Peak Run Rates, Finished Product Stocks Continue Building
Runs rose fractionally on the week and lower crude imports led to a crude stock draw. Finished products, however, have continued rising amid peak runs. Gasoline demand was higher but is still seen as underperforming seasonal expectations. Gasoil demand rebounded from very low levels. Kerosene stocks continued to build along seasonal norms. All the product cracks improved on the week and our indicative margin indicator rose, but remains rather weak.

Impact of Russian Gas Flow Interruption on Oil Demand
In the low probability event of a complete Russian gas flow stoppage to Europe, oil demand could potentially increase 600 MB/D. In the more likely scenario, still just 30% probability, of a stoppage of flows through Ukraine to Europe, the impact on oil demand would not be material.

U.S. Refinery Turnarounds, September 2014 – December 2015
There was a relatively high level of crude unit downtime during August and the level of both planned turnarounds and other outages carrying over from the current month is expected to increase over the next couple of months.

Freight Market Outlook
A glut of crude oil in the Atlantic Basin has caused the flat price of crude to fall and regional grade differentials with Asia to narrow substantially. The Brent-Dubai spread has narrowed to its lowest value in four years, prompting a significant increase in the number of West African cargoes headed to Asia in August. In addition, the Dubai price structure is now in contango, with forward prices higher than those for the prompt month, making it easier to hedge cargoes on the long voyages from the Atlantic. This is a good omen for VLCC operators as more vessels are tied up on long voyages around the horn of Africa from the Atlantic to Asia. The flip side, of course, is that Mideast liftings to Asia in the fourth quarter will have to decline to make room for the added Atlantic Basin supplies.

Asian LPG Prices to Benefit from Lower Saudi CPs
LPG prices in Asia held steady this week, prior to this weekend’s imminent release of Saudi contract prices for Sept tons. CP futures prices indicate that the propane CP could fall while Asian destination markets show that the butane CP could remain flat or perhaps drop by $10/MT.

Ethanol Demand Soars
U.S. ethanol-blended gasoline manufacture soared to 8,904 MB/D the week ended August 22, up from 8,667 MB/D during the prior week and very close to the record 8,980 MB/D set in May. Ethanol output dropped to 913 MB/D, the second lowest rate of production since April.

U.S. Ethanol Prices Rise in August
Ethanol prices rose in August, after falling during the prior three months. The market tightened as stocks drew by the largest amount since March 2013.

Source: PIRS Energy Group's weekly 'Energy Market Recap'

Maritime Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

That’s Not Coming on Board!

There’s hardly anything that can’t be shipped in a container. However, for ethical reasons, Hapag-Lloyd refuses to transport certain goods.   Anyone who regularly transports goods for third parties,

US Navy Awards $22mln Waterfront Inspection Deal

The U.S. Navy has awarded a five-year, $22 million contract to Appledore Marine Engineering, a specialist focusing exclusively on the inspection and design of marine infrastructure,

Offshore Operators Can Simplify Safety Equipment Logistics

Safety equipment manufacturer VIKING Life-Saving Equipment said its Offshore Safety Agreements are providing relief for offshore operators seeking to ensure compliance

Tanker Trends

Egypt Picks Jordan LNG Cargo Winners

Egypt has picked Shell, Vitol and Trafigura in a tender to supply four cargoes of liquefied natural gas (LNG) via Jordan's Aqaba import terminal, trade sources said.

SHIPPINGInsight to Focus on Ship Telematics

The subject of ship telematics will be prominently featured at the upcoming SHIPPINGInsight 2015 Fleet Optimization Conference & Exhibition, which takes place in Stamford, Conn.

NewLead's MT Nepheli Update

NewLead Holdings Ltd.announced today a review of the commercial performance of one of its bitumen tanker vessels, the MT Nepheli since the vessel was delivered to NewLead's fleet.

Finance

Dry Bulk Recovery Still a Long Way Off

The dry bulk shipping market will remain in recession due to contracting demand for iron ore and coal, and any recovery is not expected until 2017, according to

Egypt Picks Jordan LNG Cargo Winners

Egypt has picked Shell, Vitol and Trafigura in a tender to supply four cargoes of liquefied natural gas (LNG) via Jordan's Aqaba import terminal, trade sources said.

Cameroon Awards Kribi Deepwater Contract

Cameroon has awarded a contract for its Kribi port to a consortium led by French logistics group Necotrans, the two parties said. The deepwater port will allow

Energy

Keppel Delivers Jackup to UMW-OG

Keppel FELS, a wholly owned subsidiary of Keppel Offshore & Marine (Keppel O&M) has delivered UMW Naga 8, a KFELS B Class jackup rig, to Malaysia’s UMW Oil & Gas Corporation Berhad (UMW-OG).

Rapid Oil Spill Response Vessel Launched

Western Canada Marine Response Corporation (WCMRC) launched their newest oil spill response vessel in Burrard Inlet. The boat, named after former employee George Penman,

Greek Coast Guard Seizes Weapons Ship Bound for Libya

Greek authorities have seized a freighter carrying an undeclared shipment of weapons en route from Turkey to Libya, coast guard officials said on Wednesday. A

Fuels & Lubes

Rapid Oil Spill Response Vessel Launched

Western Canada Marine Response Corporation (WCMRC) launched their newest oil spill response vessel in Burrard Inlet. The boat, named after former employee George Penman,

Total Lubmarine Resumes Full Service in Tianjin

Marine lubricants and greases provider Total Lubmarine informs it has resumed all services based out of the Port of Tianjin following the deadly explosions that rocked the port August 12.

LNG-fueled Box Ship a 'Momentous Step Forward'

On Saturday, August 29, 2015, the world’s first series of energy efficient containerships welcomed its second LNG-powered vessel in San Diego, fueling the U.S.

LNG

Egypt Picks Jordan LNG Cargo Winners

Egypt has picked Shell, Vitol and Trafigura in a tender to supply four cargoes of liquefied natural gas (LNG) via Jordan's Aqaba import terminal, trade sources said.

LNG-fueled Box Ship a 'Momentous Step Forward'

On Saturday, August 29, 2015, the world’s first series of energy efficient containerships welcomed its second LNG-powered vessel in San Diego, fueling the U.S.

TOTE’s 2nd LNG Containership Launched

Shipping company TOTE and shipbuilder NASSCO on Saturday launched Perla del Caribe, the second of two Marlin Class ships – the first containerships in the world to be powered by natural gas.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.8364 sec (1 req/sec)