Thomson Reuters Markets
Oil prices settled higher yesterday, supported by expectations of higher global economic growth, according to latest IMF projections. The Fund lifted expectations of worldwide growth to 3.9% for both 2018 and 2019, a 0.2% upward revision compared to previously. Brent crude had rallied by 0.54% by 09.07 AM GMT Tuesday morning, following gains of 0.61% yesterday. Similarly, WTI had posted a cumulative gain of 0.91% since Monday’s open.
Economic growth traditionally fuels demand for oil, however, rising crude oil prices in recent weeks have weighed on refiners, who are the primary buyers of crude oil. Rising feedstock prices have squeezed refining margins and could possibly dampen appetite in the short-term.
Thomson Reuters Oil Research have assessed US seaborne crude oil imports at 5 million bpd the previous week, a jump of almost 400,000 bpd w-o-w, or 8.9%. Strong gains were seen in PADD I, with volumes leapfrogging from 0.74 million bpd to 1.22 million bpd. Quantities in PADD V rose from 1.24 million bpd the week prior to 1.31 million bpd in the previous week. Arrivals in PADD III declined from 2.61 million bpd to 2.46 million bpd.
A Reuters poll found that crude oil inventories in the US probably declined by 1.3 million bbls last week, marking the 10th week of declines. Gasoline volumes are expected to have increased by 2.44 million bbls, while distillates are seen down by 1.6 million bbls. Refinery utilisation continues to decline as we approach February, when turnarounds usually start unfolding.
The Oil Research Team
Supply Chain & Commodities Research
