This is how global crude oil flows will look after big Opec production cap deal
4 stars based on
The Oil Trade Flow Portal provides detailed, interactive balances and trade flows for crude oil and major refined products, allowing clients to gain a better understanding of ever-changing trade patterns, and to anticipate future changes. Oil markets face significant tightness crude oil trade flows. Despite recent volatility in risk assets, the global macroeconomic backdrop remains solid.
In this environment of very little stock cushion, global refining runs are forecast to rise by 2. And we see huge crude stock draws ahead, though there is some short-term indigestion absorbing prompt crude oversupply, crude oil trade flows WAF. Geopolitical risks to supply are formidable Iran, Venezuela, Yemen, Libya and something is likely to go wrong over the next few months. We believe OPEC cuts will persist beyondas Saudi Arabia crude oil trade flows the lead in assuring market management will continue into the future.
Forglobal supply outpaces demand by 1. But stocks will remain at relatively low levels. Refining margins are strong in Bunker spec changes in will be very disruptive. Changes in operations and prices crude oil trade flows accelerate in 2H19 with much wider clean-dirty product spreads and crude quality differentials. To the dismay of the U.
Higher mandates in some EU countries contributed to an increase in biofuel imports and a decline in exports. Winter has not moved gently into April, and European gas markets will be feeling its impact via bone dry storage facilities for many months to come. Refilling storage deficits crude oil trade flows quite a task, with failure meaning that prices next winter could look very similar to those seen over recent weeks.
However, our fundamentally-derived prices maintain a fairly large premium over the market quotes, as we crude oil trade flows in risks of delayed nuclear restarts. Crude oil trade flows forward prices have found support in surging EUA prices, with the recent rise in price anticipating the trend we expected from onwards as a result of the Market Stability Reserve. Short-term coal-gas fuel switching economics have been acting as the price-setting mechanism in the EU ETS market, more than what we have seen in the last few years.
With gas prices buoyant due to extremely low stocks and with lower coal prices, coal-to-gas switching crude oil trade flows have been underpinning EUA prices and a potential continuation towards higher carbon prices is possible, based on fuel-switching economics. Falling gas prices led to month-over-month power price declines at most Western hubs in March, overcoming the bullish impact of colder than normal weather and lower hydro output.
Rising Permian basin supply weighed on Western gas markets with most hubs recording price declines even though Henry Hub was nearly unchanged. While California hydro output will remain down year-over-year going forward, upward revisions to Columbia basin hydro generation will lead to weaker prices and heat rates this summer. Water releases in April will also be inflated by the need to reach falling flood control elevations at storage reservoirs.
In the Southwest, in addition to lower hydro, retirement of Etiwanda 3 and 4 along with the previous shutdowns at Mandalay and San Juan imply the region will head into summer with 1. Coal prices shifted considerably lower of March as coal demand fundamentals in China faded, and seasonal demand eased. Chinese import demand over the balance crude oil trade flows is expected to shift considerably lower due to rising renewable generation and weaker load growth compared to last year.
Despite the downward correction in prices, prices remain exposed to further weakness in and Overall commercial inventories declined 1. Four-week adjusted total U.
Cushing crude stocks built 1. Overall crude stocks are forecast to decline 3. Continued inventory declines are forecast for the two major light products next week with gasoline down 1. Data on vehicle sales are a timely and useful indicator of economic activity. Given that the world economy improved markedly duringvehicle data should have shown corresponding strength.
The actual picture, however, was mixed. Vehicle sales are also a driver of gasoline demand, and a gasoline demand regression model using vehicle sales yields a high R-square. Propane prices fell 1. Ethane prices increased 3. Propane inventories continue to decline with a draw of 1.
Implied propane demand remains strong at 1. Steam cracker feedstock margins rebounded last week for all NGL feedstocks with ethane remaining the most economic feedstock. Those same farmers that were surveyed by ag-centric brokerage houses and large Commercial entities in early March presumably gave the government very different numbers than the privates as combined corn and soybean acreage came in at million acres, down 3.
The only estimate that was even remotely correct was that soybean acreage would be 1 million acres higher than corn, a small consolation. The final hold out from high winter import levels is still showing no signs of breaking.
Korea has been an odd player in the LNG market, with several distortions in the last year that have perhaps made LNG imports more robust than crude oil trade flows demand fundamentals would suggest. Until recently, heating degree days have been a good indicator for Northeast Asian LNG demand, however Korea has recently deviated from this blueprint — a theme that has made forecasting Korea both short- and long-term tricky in terms of storage management, nuclear production, weather, and coal developments.
That was more than double the 6. Product stocks were fractionally lower, with gasoline and naphtha posting strong draws. Gasoline balances have tightened, with demand particularly strong last week. Other product balances are performing within expectations. The implied refining margin continues to be acceptable, along with above average implied marketing margins.
VIX volatility fell back from about 25 to under Oil volatility also eased. Commodities were largely neutral, but oil gained 0. The metals index remains right at crude oil trade flows support with respect to its uptrend and remains a key indicator.
Ethanol inventories continued to slide the week ending March 23 after reaching a record high two weeks earlier. Stocks fell by thousand barrels last week to May ethanol futures were up 0. Saudi Arabia just reported their end-February foreign exchange reserves. However, additional financial resources fx reserves were probably used to defend the dollar-riyal peg in a period of rising U.
So far, month forward dollar-riyal exchange rates have not shown any undue stress and debt insurance quotes reflected in the credit default swap market have been well contained. Domestic Saudi interest rates have recently been allowed to rise, which means financial resources necessary to defend the dollar peg will lessen in March.
This implies any reserve drawdown that might occur in March should not be as significant. Global equities recovered about 1. Emerging Asia was higher by 3. Texas and New Mexico pulled down production while Oklahoma continued to grow and some disrupted volumes in the Gulf of Mexico returned. Our Reference Case outlook forecasts U.
January demand came in at Final end-January total commercial crude oil trade flows stood at 1, Compared to January PSM data, total commercial stocks are now lower than year-ago by PIRA hosts a variety of events each year, for clients and non-clients alike.
In addition to hearing our latest thinking, participants also get a hands-on tutorial on our approach and methodology behind our content creation, arming them with essential know-how to build their own models and forecasts. Gives clients insights into the trade flows balancing regional supply and demand that are critical to regional crude and product prices Crude oil trade flows a comprehensive analytical tool to visualize the interplay of regional crude and product flows Offers clients an invaluable asset for developing trading and planning strategies.
FEATURES See crude oil trade flows quarterly and long-term annual balances and trade flows for crude oil and major refined products Create user-defined data tables with 13 distinct regions on refinery product yields, crude production and runs, product demand, net inter-regional trade flows, and inventory changes Obtain forecast data based on extensive research by PIRA.
European Natural Gas Markets. Commercial Stocks Continue to Draw. Financial Stresses Lessen, but Still Elevated. Inventories Decrease from Record High. Global Equity Markets Rebound.