For the Week endiing December 7, inventories of crude and the four major products built, while inventories of other products drew.
New York, NY (PRWEB) December 17, 2012
NYC-based PIRA Energy Group reports that U.S. commercial oil stocks built while Japanese crude stocks drew week-on-week. In Canada, the government approved both the Nexen and Progress takeovers but made it more difficult for future foreign acquisitions. Specifically, PIRA’s analysis of the latest oil market fundamentals has revealed the following:
*U.S. Commercial Stocks Build Week-on-Week
In the week ending December 7, U.S. total commercial stocks built and the year-on-year surplus increased. On the week, inventories of crude and the four major products built, while inventories of other products drew.
*Japanese Crude Stocks Draw Week-on-Week
Japanese crude stocks drew the week ending December 8, with refinery runs posting a large increase and the crude import rate rising only slightly week-on-week. Crude stocks are very near the mid-point of their four-year range and year-ago levels.
*Nexen & Progress Takeovers: Ottawa Draws a Line in the Oil Sands
After some delays, the Canadian government approved both the CNOOC/Nexen and the Petronas/Progress takeovers, having found them to be of “net benefit” to Canada. Some observers say that Ottawa really had no choice but to approve, given the amount of prior wooing of Chinese investment and trade by the federal government. However, the government appears to have pulled back the welcome mat for other state-owned companies.
*Propane Prices Collapse
In the U.S., the continued absence of weather-related demand and bloated inventories are unfavorable for propane prices. In Asia, the weather has turned milder at a time when stocks are perceived as adequate, prompting a flat price collapse.
*U.S. Ethanol Prices Decline Week-on-Week
U.S. ethanol prices declined late in the week ending December 7, following corn prices lower. Production increased to the highest level since June and imports rose sharply. The incentive to blend ethanol decreased, and the penetration of ethanol-blended gasoline fell to one of the lowest levels of the year.
*U.S. Ethanol Output Declines Week-on-Week
U.S. ethanol output was 824 MB/D the week ending December 7, down from a 22-week high of 835 MB/D the previous week. Imports of Brazilian sugarcane-based ethanol tumbled to 12 MB/D (3.5 million gallons) from 92 MB/D (27.0 million gallons) during the prior week, as Brazil’s South-Central region enters its inter-harvest season. Inventories rose to a 23-week high, increasing by 687 thousand barrels to 20.0 million barrels as the manufacture of ethanol-blended gasoline fell again.
*Venezuelan President Chavez Hints at Earlier-than-Expected Political Transition
President Chavez recently disclosed the severity of his recurring bout with cancer, and publicly indicated his preference for Vice President Nicolas Maduro to succeed him if he is unable to carry out his next presidential term. President Chavez then returned to Cuba for cancer treatment. Chavez’s announcement signaled the possibility of an earlier-than-expected political transition and his implicit endorsement of a constitutional process to replace him if necessary.
The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.
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