PIRA Energy Group's Weekly Oil Market Recap for the Week Ending June 29th, 2014 - FOX5 Vegas - KVVU

PIRA Energy Group's Weekly Oil Market Recap for the Week Ending June 29th, 2014

Posted:

This article was originally distributed via PRWeb. PRWeb, WorldNow and this Site make no warranties or representations in connection therewith.

SOURCE:

Oil demand growth will improve in 2H14 with stronger economic growth.

New York, NY (PRWEB) July 01, 2014

NYC-based PIRA Energy Group believes that Oil demand growth will improve in 2H14 with stronger economic growth. In the U.S., with crude stock draws expected and improving product demand, stock builds will continue to decline and ultimately become stock draws in the weeks ahead. In Japan, crude runs were marginally changed while crude imports remained low enough to limit the stock build. Specifically, PIRAs analysis of the oil market fundamentals has revealed the following:

World Oil Market Forecast

Oil demand growth will improve in 2H14 with stronger economic growth. Iraqs crude production losses in 2H14 will be made up primarily by Saudi Arabia, but global spare capacity will fall to just 1.4 MMB/D August through November. This is expected to support higher crude oil prices. In 2015, lower Iraq production will again require higher output from Saudi Arabia, but much less so because of weaker demand from higher prices and assumed increases elsewhere in OPEC. Refinery margins will be somewhat weaker because of higher crude prices.

U.S. Stock Building to Slow Down

With crude stock draws expected and improving product demand, stock builds will continue to decline and ultimately become stock draws in the weeks ahead. This past week overall U.S. oil inventories increased. This widened the year-on-year inventory deficit to 25 million barrels with all major categories below last year. Even though PIRA is forecasting a stock draw for next weeks DOE data, the year-on-year inventory deficit will narrow because of last years very large inventory decline for this particular week.

Japanese Crude Runs Stay Low, Product Demands Rise

Crude runs were marginally changed while crude imports remained low enough to limit the stock build to less than 1 MMBbls. Finished products drew 2.6 MMBbls. Product demands were all higher, leading to broad based stock draws. Refining margins were little changed but remain soft.

Inventory Build Rate Slows, But Climb in Weeks Ahead

U.S. weekly propane prices strengthened 1.3% to 107.8¢/gal this week on a lower-than-expected stock build. For the second week in a row, the total propane/propylene inventory increase was below three million barrels. The latest data from the Department of Energy showed that total C3 (propane + propylene) stocks increased by 2.43 MMB, below the monster 3.4 MMB+ rate of increase observed in late May and early June. Strong inventory builds over the next few weeks, due to dramatically lower exports, should reduce or eliminate the year-on-year stock deficits caused by this winters record conditions.

U.S. Ethanol Prices Tumble

Ethanol prices tumbled last week as record production during the week ending June 13 greatly outweighed the robust demand, declining inventories and rising corn costs. Margins for ethanol manufacture were the lowest since February, partly due to plunging co-product DDG values as China stopped buying this animal feed component from the U.S. on concerns it might contain unapproved genetically modified organisms.

Ethanol Production Plummets

U.S. ethanol production plummeted to 938 MB/D the week ending January from an extraordinary 972 MB/D during the previous week as weather-related issues in the Midwest curtailed operations at several plants. This was the largest week-on-week decline since January.    

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRAs current analysis of energy markets around the world as well as the key economic and political factors driving those markets.

Click here for additional information on PIRAs global energy commodity market research services.

PIRA Energy Group
3 Park Avenue, 26th Floor
New York, NY 10016
212-686-6808
sales(at)pira(dot)com

Follow us on LinkedIn.

For the original version on PRWeb visit: http://www.prweb.com/releases/2014/07/prweb11989330.htm

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

Powered by WorldNow
Fox 5
Powered by WorldNow CNN
All content © 2014, KVVU Broadcasting Corporation, Las Vegas, NV and WorldNow. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service..