PIRA Energy Group has said that in February, Cushing inventories rose and the WTI contango deepened. When it came to the US, last week, record crude stocks tested the limits of storage capacity. In Japan, crude runs eased and stocks drew.
- Last week’s build propelled US crude stocks to a new record.
- PIRA sees crude stock build continuing, testing the limits of onshore storage capacity.
- ANS exports are allowed but are rare due both to infrequent arbitrage incentives and the requirement that US flag vessels be used.
- Crude runs eased from maximum seasonal levels.
- Imports were low enough to induce a stock draw.
- Finished product stocks drew moderately.
- Gasoline demand was modestly higher.
- Lower incremental exports built stocks fractionally.
- Gasoil demand eased with higher yield, but a jump in incremental exports drew stocks for the sixth straight week.
- The indicative refining margin remained strong.
- Gasoline, naphtha, and gasoil cracks firmed and offset a decline in the fuel oil crack.
- Much attention has been paid to announcements of deferred well completions.
- The current contango market presents an opportunity for operators to improve well economics by deffering well completions to reap the benefits of higher future prices and perhaps also lower completion costs.
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