Gas Oil 1 year $/TonneMonday 24 September, 2018

The fundamentals for kero / diesels improved last week with the rise in stocks offset by a spike in demand. Stocks are back above the level seen last year for the first time in 12 months. Stocks should be close to the seasonal peak and demand should weaken further. As a result distillate prices should struggle to rise. However, the effect of sanctions on Iran could prompt a spike in crude prices which would result in higher product prices.

Gasoline 1 year $/TonneMonday 24 September, 2018

The fundamentals for gasoline were little changed with stocks falling on the week but rising on the year. Demand fell slightly. As a result the days cover was unchanged. Gasoline stocks remain well above the level seen last year and the five year average. Demand growth improved and was the highest since April. As a result the key NYMEX RB Gasoline Future increased above 200 c/g.

Crude 1 year $/TonneMonday 24 September, 2018

Crude stocks fell on both a weekly and annual basis. Crude stocks remain below both the level seen last year and the five year average. Demand also increased, is up 564,000 bpd on the week and 691,000 bpd on the year. Demand is also 1.149m bpd above the five year average. Demand growth was also healthy, up 4.9 % on the year. As a result Brent Crude is testing resistance at $80/b. Following the failure of OPEC to agree a production hike at the joint OPEC / Russia meeting yesterday in Algeria we expect crude prices to spike higher towards $100/b with the risk of a release from the US emergency reserves also increasing.

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