US commercial crude stocks reached another record high in January to stand at 444.4 mb, which is 71 mb or 19% above the same time last year and 84.9 mb or 23.6% above the latest five-year average.The tight gasoil market opened arbitrage from Europe to the USEC.This was slightly above market expectations of a 222 Bcf decrease.The rally was also triggered by short- covering spurred by speculation that the market had hit bottom amid geopolitical concerns in the MENA region.At least for now, the deceleration of global output seems to have stabilized, although many risks remain, particularly in the Euro-zone.Taking these challenges into account, the 2015 GDP growth forecast remains at 3.4%, after 2014 growth of 3.3%. The OECD growth forecast for both 2014 and 2015 remains unchanged at 1.8% and 2.2%, respectively.Chinese oil demand is bound to uncertainty because of new government policies aimed at reducing transport fuel use.This is the 13th consecutive week of total decline and the lowest reading since the week ending 31 December 2009, according to the latest survey from Baker Hughes.An analysis of 7 factors that influence oil markets, with chart data updated monthly and quarterly. Non-OPEC supply expectations indicate changes in market.
Nevertheless, the production outlook for the coming months is uncertain.Within the components, crude commercial inventories rose by 3.2 mb, while product stocks were down by 8.2 mb.In general, the US economy is improving, supported by an ongoing positive trend in job creation, rising house and equity prices, and other income-related factors that have, in the past year, led to rising consumption.Mediterranean-to-Mediterranean and Mediterranean-to-Northwest Europe Aframax rates each rose by 13% to average WS128 points and WS120 points, respectively.Saudi Arabia told OPEC that it cut oil production by the most in more than.The top crude suppliers to the US in December were Canada, Saudi Arabia and Mexico.As the most affordable crude oil storage facilities like Cushing fill up, the cost of storage rises.
Oil prices slip back; traders await OPEC report
US stockpiles of crude increased sharply over the month to 444mb, the Energy Information Administration said, reflecting the greatest amount shown by government weekly data since it has been collected starting in 1982, and up 51.7 mb since early January.Economists have been particularly surprised at these higher sectorial numbers for manufacturing.Within the fuel oil components, fuel oil A rose by 2.2% on higher output combined with lower domestic sales.Soy complex prices dropped with soybeans, soybean oil and soy meal declining by 4.0%, 3.7% and 3.1%, respectively, on record crops in the US and South America.Both the output and new orders indexes fell by 2.8 bp and 2.5 bp, respectively.Japanese commercial crude oil stocks fell in January for the third consecutive month to stand at 86.9 mb, which is 2.2 mb or 2.5% below a year ago at the same time and 8.7 mb or 9.1% below the seasonal norm.
However, increasing Russian exports capped further gains in gasoil margins.Nevertheless, caution is required for projections as 2015 still includes, to a large extent, low baseline effects from previous years.The deflationary trend is also still an important issue and banking sector-related issues also remain.
As the tax effect as of April will no longer be considered in the yearly comparison, low inflation will once again become an important issue.The private sector shed jobs at its sharpest rate since September 2013, while currency depreciation led to intensifying cost pressures.All top product suppliers raised their export volumes to the US.Saudi Arabia was also the top crude supplier to Japan the previous month, holding a stable share of 30% of total crude exports to the country.
Therefore, the target is unlikely to have any bearing on the near-term easing cycle.Similar to diesel, fuel oil consumption was on the rise as persisting drought conditions in the parts of the country encouraged additional use of fuel oil to compensate for hydro-electrical power reduction.It is expected that in the coming months additional inflows will come to the region from new Middle Eastern refineries, thus keeping pressure on the gasoil market.However, manufacturing had a strong rebound at 5.7% y-o-y. The PMI for manufacturing in January also indicated a slow-down and now stands at 48.8 for February, indicating a contraction in the sector in the near-term.
GDP growth at market prices (rather than being based on factor costs) was revised up from 5% to 6.9% in 2014 and was reported to be 7.5% y-o-y in 4Q14, compared to 8.2% in 3Q. According to the new numbers, the GDP growth rate for 2014 has been revised to 7.2% from 5.2%. Also, the expectation for 2015 has been revised up to 7.5% instead of 6.1%, based on the new methodology.In its Monthly Oil Market Report for March, released Tuesday morning, the Organization of the Petroleum Exporting Countries (OPEC) noted that the cartel.
The middle distillate market continued to be relatively supported by higher demand from several countries in the region, including the Philippines, Sri Lanka and Vietnam.While on the manufacturing side, the index indicated a marginal deceleration, staying slightly below the neutral level of 50.
OPEC's Report Suggests The Oil Market Is Now Balanced
Feb 10 Aug 10 Feb 11 Aug 11 Feb 12 Aug 12 Feb 13 Aug 13 Feb 14 Aug 14 Feb 15.In the five years through 2014, the manufacturing PMI on average fell 0.5 bp in January and 0.9 bp in February, and then rebounded 1.5 bp in March.Almost half of 2015 oil demand growth is projected to come from China and the Middle East.