Tag: Gasoil

PADD1 Clean Tanker Demand Outlook Nov17

Clean tanker demand for the US East Coast (PADD1) is resuming its previous declines, on weak fundamentals.  Slowed by weak demographics, PADD1 gasoline demand will face tepid vehicle-miles travelled and the continued growth of electric vehicles (EVs).  Meanwhile, fuel switching to natural gas for home heating is providing a structural decline in heating oil demand, offsetting rising trucking demand for diesel.  Despite all of the angst over PADD1 refining, the region’s plants account for only 20% of clean product supply, and PADD1 is essentially a large blending centre reliant on the USG (PADD3) to meet demand.  Stable pipeline flows and rising Jones Act tanker movements will cut into imports and tanker demand.  Lower inventories and a colder winter could boost demand this season.  Download the Executive Summary of the presentation here.

European Demand Jun15

Written in June 2015, when media enthusiasm over rising oil demand was hitting a crescendo, suggesting that demand would resolve the global oil supply imbalance. Although demand for price-elastic oil products, such as gasoline, continued to remain strong — especially in key markets of China, India and the US — a tepid macroeconomic environment had limited demand growth for other product grades. The media overreached when it suggested that European oil demand jumped 4% yoy in 1q15 on lower prices. In fact, bitterly-cold weather and changing bunker regulations drove the majority of Europe demand growth in 1q15, supporting crude runs. Normal weather patterns during the winter of 2015-16 led to negative yoy comparisons for Europe, pressuring distillate balances and pricing.  Download report here.