Gas Oil 1 year $/TonneFriday 12 January, 2018
The fundamentals weakened last week with total distillate stocks increasing by 4.3mb on the week, offsetting a small rise in demand of 67,000 bpd. As a result the days cover increased by 0.5. However, the overall fundamentals are supportive for prices with stocks below both the level seen last year and the five year average. Demand is also up 6.8 per cent on the year. Although prices are overbought in the short term, the downside looks limited especially considering the US is experiencing a cold winter and the weather outlook for Europe is extremely cold.
Gasoline 1 year $/TonneFriday 12 January, 2018
The fundamentals for gasoline were unchanged last week with rising stocks offset by rising demand to leave the days cover unchanged. Stocks should continue to rise over the next month while demand should weaken further. As a result prices should consolidate.
Crude 1 year $/TonneFriday 12 January, 2018
The fundamentals for crude remain extremely strong with stocks falling and demand rising. The latest data from the US Department of Energy surprised the market with crude production falling sharply by 290,000 bpd on the week. Crude stocks are now only 17.1mb above the five year average and US total oil demand is growing at 5.8% on the year. Although the graphs are over-bought we believe any correction lower will be limited.
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