RBOB gasoline is tight on the USEC, but conditions in the broader global market have hardly improved. Combined stocks in PADDs 1, 2 and 3 moved into a small surplus in early July, marking the first time that stocks have been higher y/y since Hurricane Harvey. ARA and Singapore stocks are tracking..
Genuine tightness continues to grip fuel oil markets largely due to the challenges of making on-specification material, sending prompt timespreads up above $5 per tonne in both Asia and Northwest Europe. A dearth of exports to Asia from the Atlantic basin in recent months and structural shifts in..
ICE gasoil spreads have trended lower over the past month (barring the expiry of the June contract) thanks to the quirks of ARA pricing, but elsewhere the data continue to back our view that stocks are drawing hard. Indeed, if the spike in June prices on a few refinery wobbles and the risk o..
The struggles of Atlantic basin gasoline this June should serve as a warning for the bulls. Even with refinery outages surprising to the upside, supply is too high. In the past two years, the ‘solver’ for excess US gasoline production has been a major US Gulf Coast disruption. What would happen i..
Fuel oil markets have been roiled by the Trump administration’s withdrawal from the Iran nuclear accord. Not only does the market face the loss of heavy crude from Iran, as well as its exports of fuel oil, but deeper structural problems in the market have been made much more prominent. Huge..
Diesel balances are still hugely bullish but the market is struggling to find ways to take a view on these balances, with ARA gasoil markets confounding traders time and again this year. We don’t think the benchmark is broken, but the market needs to keep in mind that the idiosyncrasies of..
Gasoline is getting hit from both sides. Demand is coming under pressure from higher prices and supply is powering ahead despite weak gasoline cracks. The strength in diesel margins means that refining margins are unlikely to turn negative in any meaningful way. Refinery breakdowns might bring so..
With IMO 2020 looming on the horizon, and question marks persisting over Saudi fuel oil demand following major electricity tariff reforms, there is limited fresh appetite for taking risk on fuel oil. But thanks to positive developments in Pakistan, Saudi Arabia, Iran and India, there is still sco..
Diesel markets are tightening already, and, with crude rallying, production growth will be a challenge in the near term. Simple margins have been hammered by the surge in Brent prices. Meanwhile, the Atlantic basin stock situation is much more bullish than a year ago—inventories have likely..
The weakening in forward gasoline cracks over the last month makes it tempting to suggest that it is time to go bargain hunting, but we still think there is little short-term upside to the market with the full weight of European supply yet to hit the US East Coast. Forward values have not fallen..
Fuel oil markets have entered the long shadow of the IMO’s low-sulphur ship fuel rules. The transition to cleaner fuel will be guided by market prices. Clean product demand is set to soar (at current prices) while demand for fuel oil is set to plunge. So clean product values need to rise re..
Atlantic basin cracks and spreads could remain under pressure until the summer despite heavy European turnarounds. Underlying demand trends are still intact—but it will take longer to work off the overhang that has built up than we had initially expected because supply is higher in some places.Wa..
Gasoline bulls will need to see significant buying in the coming weeks or they are likely to head for the doors. While scheduled turnaround work in Europe is heavy this spring, FCC maintenance on the US Gulf Coast is light. This means competition in the export market could be intense, especially..
Much of the oil market is starting to accept that the IMO 2020 specification shift for marine fuels is going to happen, but forward prices still have not totally adjusted because the market has not fully digested the fact that the effects of the specification change will be felt long before 1 Jan..
Diesel bulls must still play a waiting game. European maintenance does not peak until May, two months later than last year, and demand in Q1 18 has been hobbled by unusually warm weather. European heating oil demand likely fell by at least 0.2 mb/d y/y in January, as Germany and France recorded t..