New York, NY (PRWEB) March 19, 2013
NYC-based PIRA Energy Group believes that Asian oil markets will remain supported by increasing turnarounds. On the week, March began with U.S. stocks continuing to decline. In Japan, crude runs remained strong, but demand was weaker. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
*Asian Oil Markets Remain Supported by Increasing Turnarounds
While there are some concerns about Chinese and Indian economic growth prospects, Dated Brent prices are still seen trading around their recent range for the next couple of months. Refinery maintenance will rise in Asia, peaking in April/May, and helping to limit any significant erosion in product cracks.
*March Begins with U.S. Stocks Continuing to Decline
U.S. commercial stocks fell the week ending March 8, with product inventories exhibiting the largest weekly decline in over a year, while crude stocks built for the eighth consecutive week. The overall stock decline was larger than last year's fall for the same week, narrowing the year-on-year inventory excess.
*Japanese Crude Runs Remain Strong, But Demand Is Weaker
For the week ending March 9, Japanese crude runs remained strong and crude imports were subdued, resulting in a slight crude stock draw. Demands generally eased, with year-on-year growth for gasoline performing worst due to a weaker yen and higher prices. Unfinished product stocks and feedstocks saw a combined stock build.
*Margins for Ethanol Manufacturing Rise
U.S. ethanol prices rose sharply the week ending March 8, to the highest level since early September. Prices were supported by advancing corn costs, lower inventories and skyrocketing RIN costs. As a result, PIRA’s model plant based on Chicago cash corn costs obtained a higher weekly average margin than the prior week. The higher margins will result in idle plants restarting, provided they can secure enough corn. Brazil plans to cut taxes by almost 80% on ethanol manufacture to support financially troubled mills and to drive manufacturers to focus on ethanol at the expense of sugar. Brazilian ethanol exports declined in February compared to January.
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.
Click here for additional information on PIRA’s global energy commodity market research services.
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