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Oil - Perspectives

WTI - a dog’s breakfast

Perspectives is our flagship weekly publication on oil, providing unparalleled information, analysis and views. This edition was published 8 Feb 2016

An already weak backdrop for WTI fundamentals got a lot worse last week as US Midwest refining margins were dragged into negative territory by gasoline. Not surprisingly, this has led to a sharp increase in planned works and discretionary run cuts. Q1 16 US TARs are now 0.22 mb/d higher than a month ago, with March global works over 2 mb/d higher at 4.6 mb/d. With Cushing stocks already at a record 64.3 mb, fears of tank tops are rising fast. Our forward balance indicates storage capacity utili... Read more

The European winter has proven to be no barrier to prices falling, with average NBP D+1 falling some by 6% m/m and 31% y/y, clocking in at a low 32.1 p/therm. The mild weather experienced in Q4 15 largely continued in January with HDDs down by 11% y/y, keeping residential and commercial demand modest.

Continued bearish developments in related fuel markets have added to the weak demand woes. Over January, M+1 Brent fell by 7% while M+1 ARA coal declined by 6% and carbon fell by a whopp...
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The Chinese economy will slow further in 2016. The correction in the real estate markets, and government pledges to curb overcapacity, will weigh on heavy industry. But consumption and services will continue to drive growt...
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After a slight ramp up in Q4 15, global LNG prices have started to tumble, with delivered Northeast Asia prices dropping from over 7.0 $/mmbtu at the start of January to just over 5 $/mmbtu at the end of the month. The pri...
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Very mild weather over November and December dented demand, kept storage at high levels (above 3.8 tcf), and added to the pressure on Henry Hub prices, with cash prices dipping below the 2 $/mmbtu level.

January ha...
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The European market is still navigating a winter where it is teetering between being comfortably supplied and oversupplied. The mild weather experienced in Q4 15 has already biased the market to oversupplied, dropping pric...
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