PIRA Energy Group's Weekly Oil Market Recap for the Week Ending September 22nd, 2013

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U.S. crude stocks declined relative to same week last year.

PIRA Energy Group

PIRA Energy Group

High levels of propane exports and on-going feedstock usage will keep propane stocks relatively low going into the winter.

NYC-based PIRA Energy Group reports that U.S. crude stocks narrowed relative to the same week last year. On the week, U.S. commercial inventories declined, while Japanese stocks rose. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

U.S. Commercial Inventories Decline

Commercial inventories declined for the week ending September 13 led by lower crude inventories but also lower gasoline and distillate. U.S. commercial stocks are now 12.7 million barrels above last year. This is down sharply from last week due both to the stock draw this past week and the huge stock build for this same week last year. The excess continues to be largely in gasoline. While crude is down compared to last year and distillates are nearly flat and remain quite low relative to history.

Japanese Crude Imports and Stocks Rise, Demand Weakens

Crude stocks and imports jumped and gasoline demand was surprisingly soft. Kerosene stocks returned to building mode as demand eased back. Refinery margins remain abysmal with gasoline cracks being the biggest drag, though fuel oil cracks are also very weak.

Low Propane Stocks in the U.S. and High Levels of Feedstock Usage

High levels of propane exports and on-going feedstock usage will keep propane stocks relatively low going into the winter. Growing LPG imports into Europe as well as the winding down of North Sea maintenance are pressuring prices. Steam cracker operators should be maximizing propane use in both Europe and Asia.

Ethanol Values Plummet

U.S. ethanol values plunged for the week ending September 13 as the 2013/2014 corn harvest has begun and corn prices have fallen, lowering the cost to manufacture the fuel. The supply/demand balance also shifted from tightness to a surplus position.

Ethanol Output Lower

U.S. ethanol production fell to 838 MB/D for the week ending September 13, erasing some of the gains made in the previous week. Output is expected to increase soon as the corn harvest begins in the Midwest and several plants restart.

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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