PIRA Energy Group's Weekly Oil Market Recap for the Week Ending July 13th, 2014 - Northern Michigan's News Leader

PIRA Energy Group's Weekly Oil Market Recap for the Week Ending July 13th, 2014

Posted:

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

SOURCE:

WTI Strengthens in June, Other Midcontinent Differentials Weaken

New York, NY (PRWEB) July 15, 2014

NYC-based PIRA Energy Group reports that WTI strengthened in June while other midcontinent differentials weaken. In the U.S., crude stock drew while products built. In Japan, crude stocks built. Specifically, PIRAs analysis of the oil market fundamentals has revealed the following:

WTI Strengthens in June, Other Midcontinent Differentials Weaken

With crude bottlenecks redeveloping in Canada and West Texas, differentials generally weakened in June. Rising production, refinery maintenance, and pipeline delays are contributing to relative weakness in Midcontinent markets except for Cushing, where inventories continue to fall.

DOE Data Shows Crude Stock Draw, Product Build

Overall commercial inventories increased this past week with product inventory increase outpacing a crude stock decline. Last year saw a very large inventory decline for this particular week and, as a result, the inventory comparison to last year swung to positive, albeit just by 1.0 million barrels, for the first time this year.

Japanese Crude Stocks Build

Crude runs were little changed, but a higher import rate built stocks 3.9 MMBbls. Finished product stocks built slightly, but gasoline stocks drew to a record low. Refining margins are good. Gasoline cracks gained on the week, while other cracks eased slightly. The impact of typhoon Neoguri will be seen in the data for next week with refinery and berthing operations curtailed for a time.

LPG Scorecard

U.S. LPG prices have remained remarkably strong despite the large fall in crude oil prices. WTI and Brent crude oil have fallen 5% and 6% over the past two weeks. Mt Belvieu Propane is only 1% lower over the same period despite record increases in inventories and a surplus stock level to the year prior. Increased export capacity and a bumper corn crop (crop drying demand) are supportive for propane prices. Butane prices were flat over the same period and thus butanes price ratio to WTI strengthened considerably, by 2.7% to 52.8% of WTI, the strongest vs. US benchmark crude since April. Winter gasoline blending season is only a few months away the high demand period for butane. Ethane prices were the exception outpacing natural gas' 6% decline by falling 10% in two weeks to 25.9¢/gal, the lowest level since November of last year.

U.S. Ethanol Prices and Manufacturing Margins Advance

The second half of 2014 began with ethanol prices rising in most of the country and corn costs plunging. As a result, manufacturing margins increased for the first time in five weeks.

Ethanol Production Declines

U.S. ethanol output declined to a six-week low 927 MB/D during the holiday-shortened week ending July 4, down from 953 MB/D in the preceding week. Inventories increased by 82 thousand barrels to 18.3 million, inching closer to the annual high of 18.4 million.

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/prweb12018881.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.