Diesel markets worldwide are exhibiting considerable physical strength, but futures markets are burdened with worry that the market is about to hurtle off a cliff due to rising supply. With some 5.5 mb/d of refining capacity due back online between May and July after a hefty spring turnaround sea..
A great deal of worry has swept the market over the supposed weakness of US gasoline demand. We still view the softness in US demand in the first part of this year as an aberration. It is unlikely that the underlying patterns of US gasoline demand have so fundamentally changed that a major contra..
Fuel oil’s strength is finally catching up with it. Strong cracks in late 2016 and early 2017 gifted short-term decision makers at simple refineries with the unambiguous signal to up their runs, and they duly obliged. In the first two months of the year, European runs jumped by 0.4 mb/d, despite..
The outlook for middle distillates continues to improve. US stocks are down by more than 20 mb since the start of the year and inventories are draining elsewhere too. The drawdowns have halved the overhang in visible middle distillates inventories to just 17 mb, and with Asia and the FSU only sta..
Gasoline markets have tightened considerably over the last month, thanks in part to a wave of buying by Venezuela’s PDVSA amid a spiralling crisis at its refineries. This buying came just as resurgent West African gasoline demand soaked up supplies and as European refineries entered turnarounds...
As the data for January and February start to trickle in, it is clear that the short-circuiting of the bull play seemingly planned for Asian fuel oil markets was an astute move. Fuel oil demand continues to rack up impressive numbers, but the refiner response to high cracks has also led to sharpl..
Wavering faith in the crude rebalancing story prompted a wave of selling this month and product markets were not immune, but it was bizarre for diesel to be caught in the panic. Globally, the overwhelming majority of recent economic headlines have been undeniably bullish for diesel. The only real..
Global gasoline markets corrected sharply in early March, precipitated by a rumoured shift in arcane US biofuels blending rules and another slump in Asian gasoline cracks, which had enjoyed a strong start to the year. The correction was much-needed. The market had bid up summer-grade gasoline pri..
China’s implied oil demand reached an estimated 11.50 mb/d in January 2017, higher y/y by 0.71 mb/d (6.6%). Actual demand likely totalled 11.2 mb/d, higher y/y by 0.3-0.4 mb/d, after accounting for mixed aromatic imports, diesel smuggling and adjusting for the seasonal stockbuilds of 10-15 mb whi..
A trading play will pump up visible stocks in Asia in the coming weeks, but this is only a prelude to a summer of supply tightness. Onshore stocks of fuel oil in Singapore will likely rise beyond the nearly 27 mb level seen in late February, so some short-term floating storage may be needed. On t..
Thank you to all of you who attended the Energy Aspects 2017 IP Week event in London yesterday. In addition to the presentations you heard from Amrita Sen and Robert Campbell, the analysts from each of our global offices were delighted to discuss the markets with you. We are pleased to share with..
Pockets of strength are beginning to bubble to the surface in global middle distillate markets. Outside of North America, where the winter has again been mild, albeit colder than a year ago, heating demand has been strong. Spring refinery works in Asia and on the US Gulf Coast look heavy, while E..
Atlantic basin gasoline markets are retracing many of their steps from 2016, particularly in the US. Gasoline stocks on the US East Coast are bloated and inventories around the New York Harbor hit a record high in early February. Timespreads are already pushing into contango for Q2 17, a sign tha..
Fuel oil markets are taking a breather as a short-term surge in supply and the usual seasonal slowdown in bunker fuel demand during the Chinese Lunar New Year celebrations have coincided. The result has been a drop in prices, with some market watchers even suggesting that a mild contango in Singa..
Atlantic basin cracks and timespreads are labouring under a heavy overhang of stocks, dashed hopes for US winter demand, and plentiful supply on the back of high refining margins. With margins where they are, our 2017 diesel balances look very much like our 2016 balances—hardly a firm found..