Over the past few weeks, gasoil timespreads have slumped into contango at the front while remaining firmly in backwardation across most of Q1 18. Part of this divergence can be attributed to over-zealous positioning, but maintenance deferrals, following the spike in margins after Hurricane Harvey..
This report marks the launch of our new European naphtha balances, supplementing our existing Asian naphtha balances.Very strong East of Suez gasoline demand has starved the US of imports over the last several weeks, but while relief is unlikely for a little while longer, the late-season Atlantic..
Fuel oil has been largely treading water for the past month, but relatively high stock levels at key pricing points mean there is little enthusiasm for aggressive positions in the near term. Looking ahead to 2018, however, the market is facing a renewed tightening of the supply side. The Russian..
Headline balances have deteriorated markedly but this obscures the divergent fortunes of different grades. ULSD markets continue to perform well and underlying fundamentals are strong. Higher sulphur grades, on the other hand, are coming under pressure. Rising supplies East of Suez are weighing o..
Gasoline markets have struggled despite the punishing blows from hurricane season. The market has been bracing for big stock draws in the US after Hurricane Harvey removed 30 mb of gasoline output but the reality has been more muted. Between 25 August and 29 September, gasoline inventories in PAD..
The fuel oil market is shifting to a more cautious posture. Longer-term bullish trends are intact, but in the short run, the positive news looks priced in, especially with East of Suez utility demand waning, leaving the market in need of a catalyst. Pakistan, a key standout for fuel oil demand gr..
Even before Hurricane Harvey deluged the Texas Gulf Coast, shuttering more than a dozen refineries in the process, the Atlantic basin diesel market had been tightening significantly. The storm can rightly be called the proximate cause of the rally in diesel cracks and timespreads over the last mo..
A month ago, the gasoline market was contemplating a tricky Q4 17 amid expectations that the switch to winter gasoline and surging US refinery runs would lead to a steady build in inventories as demand seasonally slowed. But then Hurricane Harvey knocked as much as 4 mb/d of refining capacity off..
For much of the summer, the main worry for the fuel oil market has been the supply response due to surging fuel oil cracks. Asian fuel oil supplies likely grew y/y in July by 44 thousand b/d, as refiners raised yields, but regional demand grew even faster, by 54 thousand b/d, as bunker demand in..
Atlantic basin gasoil markets are entering the autumn in a position of strength on the back of solid demand, unplanned global refinery outages, and Latin America’s recurrent refinery problems. In the case of Europe, ULSD looks tight even though imports of US diesel are set to jump to a record hig..
Despite surging US refinery runs, strong domestic demand and ample export opportunities have kept product stocks under control. Indeed, the strength in product spreads and cracks belies the continued concern in the market over the sustainability of demand growth this year. The transition to winte..
The strength in fuel oil has gone on for so long that it risks breeding complacency. Strong cracks have raised expectations that supplies will rise and snuff out the rally. We do think supplies will rise, and there are signs that some of the demand story’s most bullish elements are fading, but th..
Indian ULSD buying may have ebbed, but the effects of the country’s unexpected buying spree on diesel markets will reverberate for a few more months. Indian buyers have stepped back from the market, but for the Atlantic basin, the damage has been done. East of Suez refiners typically supply at le..
Gasoline markets are looking more balanced as we move through the peak period for demand in the Atlantic basin. Despite US refineries processing record volumes of crude oil, refinery problems in Latin America have ensured that US Gulf Coast refiners have had an outlet for a lot of their productio..
Asian fuel oil cracks and timespreads have performed strongly since late May despite bunker fuel demand moderating. Hot weather has come early, boosting consumption even as stalwarts such as Japan and South Korea have begun to reduce their use of the product. We see the softness in bunker demand..