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..
The turmoil in light ends markets has grown over the last month. In addition to the rout in naphtha values, the market must now deal with China’s latest crackdown on gasoline component imports, as well as the bankruptcy of the largest refiner on the US East Coast, which may upend the RINs market...
The sudden rally in crude prices that took Brent above $70 a barrel could not have come at a worse time for fuel oil, with Pakistan slashing imports just as Middle Eastern outflows have picked up and Russian exports climb to their usual year-end highs, so cracks have fallen hard, imperilling the..
Diesel markets appear to be stuck in a rut as envy of the price gains in crude has translated into frustration that cold weather in the US has not proven to be much of a price catalyst for the fuel. As a result, diesel spreads have given up much of the gains won in the initial euphoria over the c..
Gasoline markets are facing a tough period that will only ease with the coming of spring. Demand is seasonally weak and refinery runs are high. Naphtha, a bright spot for light ends of late, has dimmed slightly as competition from LPG has picked up. Asian gasoline markets have plunged into contan..
Fuel oil markets remain uninspired despite some recent positive news out of Asia. South Korea suffered renewed nuclear power disruptions while the Indian courts lifted a ban on using of petcoke as feedstock. The market is well supplied in the near term, with inflows of West of Suez fuel oil into..