Oil prices edged up Friday morning, supported by tightening market fundamentals, hovering around two-year highs. Brent contract <LCOc1> was trading at $61.02/bbl as of 9:15 AM UKT, up by 40 cents from the previous settle. At the same time, WTI <CLc1> had gained 37 cents from the settle, trading at $54.91/bbl at the same time.
According to the latest PJK data, total oil product stocks stored in the ARA-hub increased by 35,000 mt to 5.3 million mt for the week ending October 26th. All products, apart from Gasoil, recorded weekly gains. Naphtha stocks recorded the largest w-o-w build, up by 64,000 mt last week, following four consecutive weeks of declines. Despite drawdowns in the previous weeks, Naphtha stocks as of last week remained above the five-year average. Fuel oil stocks rose by 22,000 mt last week, to 1.4 million mt, standing far above last year’s levels.
Gasoil stocks declined by 67,000 mt to 2.2 million mt, down by 27% from levels seen at the same time last year. Gasoline stocks remained broadly flat compared to the previous week, standing at 774,000 mt, slightly below levels seen at the same time last year. It is worth stressing that gasoline refinery margins in Northwest Europe remained supported by an outage on the 270,000 bpd at Valero Energy’s Pembroke refinery in Wales earlier this week. Lower gasoline inventories in the US reported for last week also helped to boost refinery margins.
The Oil Research Team
Supply Chain & Commodities Research