SEB report: Oil price set to continue rising
Transcript of SEB report: Oil price set to continue rising
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8/2/2019 SEB report: Oil price set to continue rising
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Oil Market ReportLast chance for a diplomatic solution?
8 MARCH 2012
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8/2/2019 SEB report: Oil price set to continue rising
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8/2/2019 SEB report: Oil price set to continue rising
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SEB Oil Market Report
Crude oilCrude oil priceCrude oil priceCrude oil priceCrude oil price(NYMEX/ICE, $/b, front month, weekly closing)
12 month12 month12 month12 month time spreadtime spreadtime spreadtime spread(NYMEX/ICE, %, daily closing, >0: contango,
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SEB Oil Market Report
Crude oilUS crude oil inventoriesUS crude oil inventoriesUS crude oil inventoriesUS crude oil inventories(DOE, mb, weekly data)
OOOOECDECDECDECD totaltotaltotaltotal industry oil stocksindustry oil stocksindustry oil stocksindustry oil stocks(mb, monthly data)
310
320
330
340
350
360
370
380
j f m a m j j a s o n d
5 year average
2011
2012
c
2500
2525
2550
2575
2600
2625
2650
2675
2700
2725
2750
2775
2800
j f m a m j j a s o n d
5 year range, top
5 year range, bottom
2011
5 year average
OECD Europe industry oil stocksOECD Europe industry oil stocksOECD Europe industry oil stocksOECD Europe industry oil stocks(mb, monthly data)
OECD North America industry oil stocksOECD North America industry oil stocksOECD North America industry oil stocksOECD North America industry oil stocks(mb, monthly data)
890
900
910
920
930940
950
960
970
980
990
1000
1010
1020
j f m a m j j a s o n d
5 year range, top
5 year range, bottom
2011
5 year average
1175
1200
1225
1250
1275
1300
1325
1350
1375
1400
j f m a m j j a s o n d
5 year range, top
5 year range, bottom
2011
5 year average
OECD Asia & Oceania industry oil stocksOECD Asia & Oceania industry oil stocksOECD Asia & Oceania industry oil stocksOECD Asia & Oceania industry oil stocks(mb, monthly data)
OPEC productionOPEC productionOPEC productionOPEC production(kb/d, monthly data)
375
380
385390395400
405
410415
420425430
435440
445450455
460
465
j f m a m j j a s o n d
5 year range, top
5 year range, bottom
2011
5 year average
24000
26000
28000
30000
32000
34000
jan-0
8
mar-
08
ma
j-08
jul-08
sep-0
8
nov-0
8
jan-0
9
mar-
09
ma
j-09
jul-09
sep-0
9
nov-0
9
jan-1
0
mar-
10
ma
j-10
jul-10
sep-1
0
nov-1
0
jan-1
1
mar-
11
ma
j-11
jul-11
sep-1
1
nov-1
1
jan-1
2
OPEC-12 production
OPEC-11 production
Chart Sources: Bloomberg, IEA, SEB Commodity Research
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SEB Oil Market Report
European oil product markets
The higher the crude oil price, the more it depresses end
consumer demand. Of course, in local currency terms theprice of oil and oil products relative to 2008 highs varies,
with Europe particularly badly affected. Consumers areaiming to avoid buying as long as possible while hoping
prices will decrease once again. For this and other reasonsincluding negative economic growth, soft heating demandand normal seasonal weakness affecting several products,
Europe possesses a relatively bearish total demand outlook.One of only a few supportive factors for the market balance
is the string of refinery shutdowns that may become abullish issue should demand recover again, e.g. ifconsumers are forced to restock or secure supplies as the
Iranian embargo impacts fully. Following positivedevelopments in refinery economics since December last
year, the February crude oil rally had a negative impact
although the situation is well short of the position late lastyear. Meanwhile the structural shift in refining capacity
eastwards continues as the OECD share of global oilconsumption continues to decrease both in absolute and
relative terms.
Light ends: The light end of the barrel has continued torally to currently trade near early 2011 highs while crackshave moved sideways over the last month. The relatively
tight Asian naphtha market requires inflows from otherregions during spring refinery maintenance, with a
correspondingly supportive impact on the European market.Tight market conditions are also reflected in strong Asian
demand for light crude oil qualities. The gasoline market isweaker as volumes of winter specification remain unsold atthe same time as the market is beginning to demand its
summer counterpart. While the naphtha market appearsrelatively well supported over the next month, a gasolineimprovement is unlikely to occur until the driving season
gets under way.
Middle distillates: Currently, the middle of the barrel isweakest. Prices have been rising alongside crude but not byenough to prevent the cracks from falling back. Jet fuel
demand is seasonally low and as temperatures are fairlyhigh heating demand is generally depressed. We see no
signs of the much-feared diesel shortage, with demandweak and inventories more than satisfactory. At present, itis difficult to envisage any specific potential catalysts in
middle distillates.
Heavy ends: While the low sulphur fuel oil crack has heldup well, its high sulphur counterpart has continued to fall
back. Asian demand for HSFO remains healthy although it isnow significantly weaker than earlier this year.Consequently, the LS-HS spread has blown apart after
achieving near parity. However, at least for now, thereappear to be insufficient tankers to transport cargoes from
Europe to Asia, which may restrict the European HSFOmarket temporarily.
European lEuropean lEuropean lEuropean lightightightight endendendend benchmarksbenchmarksbenchmarksbenchmarks($/t, daily closing)
600
650
700
750
800
850
900
950
1000
1050
1100
1150
1200
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Naphtha
Gasoline
European mEuropean mEuropean mEuropean middleiddleiddleiddle distillatedistillatedistillatedistillate benchmarksbenchmarksbenchmarksbenchmarks($/t, daily closing)
550
600
650
700
750
800
850
900
950
1000
1050
1100
1150
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Jet fuel
Diesel 10 ppm
Gasoil 0.1%
EuropeanEuropeanEuropeanEuropean fuel oilfuel oilfuel oilfuel oil benchmarksbenchmarksbenchmarksbenchmarks($/t, daily closing)
350
375
400
425
450
475
500
525
550
575
600
625
650675
700
725
750
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
High sulphur fuel oil (3.5%)
Low sulphur fuel oil (1.0%)
Chart Sources: Bloomberg, SEB Commodity Research
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8/2/2019 SEB report: Oil price set to continue rising
6/12
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SEB Oil Market Report
Oil productsUS gUS gUS gUS gasoline and distillate inventoriesasoline and distillate inventoriesasoline and distillate inventoriesasoline and distillate inventories(DOE, mb, weekly data)
US product benchmarksUS product benchmarksUS product benchmarksUS product benchmarks(NYMEX, /gal, front month, daily closing)
120
130
140
150
160
170
180
190
200
210
220
230
240
j f m a m j j a s o n d
Gasoline 5 year average
Gasoline 2012
Distillate fuel oil 5 year average
Distillate fuel oil 2012
180190200210220230240250260270280290300310320330
340350360
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Gasoline
Heating oil
US refinery utilizationUS refinery utilizationUS refinery utilizationUS refinery utilization(%, weekly data)
ICE Gasoil anICE Gasoil anICE Gasoil anICE Gasoil andddd European premiumsEuropean premiumsEuropean premiumsEuropean premiums to Gasoilto Gasoilto Gasoilto Gasoil($/t, daily closing)
81
82
83
84
85
86
87
88
89
90
91
j f m a m j j a s o n d
2007-2011 avg.
2012
550
600
650
700
750
800
850
900
950
1000
1050
1100
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
-20
-10
0
10
20
30
40
50
60
70
80
90
100
110
ICE Gasoil 0.1% (left)Jet fuel premium (right)Diesel 10 ppmpremium (right)
EuropeanEuropeanEuropeanEuropean productproductproductproduct crackscrackscrackscracks($/b, daily closing)
European lEuropean lEuropean lEuropean lowowowow ---- hhhhighighighigh sulphursulphursulphursulphur fuel oilfuel oilfuel oilfuel oil differentialdifferentialdifferentialdifferential($/t, daily closing)
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Naphtha GasolineJet fuel Gasoil 0.1%Lowsulphur fuel oil High sulphur fuel oilDiesel 10 ppm
-15-10-505
101520253035404550
5560657075
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Chart Sources: Bloomberg, SEB C ommodity Research
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SEB Oil Market Report
Oil productsRegional 3Regional 3Regional 3Regional 3----2222----1 cracks1 cracks1 cracks1 cracks($/b, daily closing)
European naphtha stocksEuropean naphtha stocksEuropean naphtha stocksEuropean naphtha stocks(kt, monthly data)
-6-4-202468
1012141618202224262830
32343638
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Asia (Minas)US (WTI)Europe (Brent)
Persian Gulf (Dubai)
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
j f m a m j j a s o n d
4 year range, top
4 year range, bottom
2012
4 year average
European gasoline stocksEuropean gasoline stocksEuropean gasoline stocksEuropean gasoline stocks(kt, monthly data)
European jet fuel stocksEuropean jet fuel stocksEuropean jet fuel stocksEuropean jet fuel stocks(kt, monthly data)
400
450
500
550
600
650
700
750
800
850
900
950
1000
1050
1100
1150
j f m a m j j a s o n d
4 year range, top
4 year range, bottom
2012
4 year average
100
150
200
250
300350
400
450
500
550
600
650
700
750
800
850
900
j f m a m j j a s o n d
4 year range, top
4 year range, bottom
2012
4 year average
European gasoil stocksEuropean gasoil stocksEuropean gasoil stocksEuropean gasoil stocks(kt, monthly data)
European fuel oil stocksEuropean fuel oil stocksEuropean fuel oil stocksEuropean fuel oil stocks(kt, monthly data)
1000110012001300140015001600170018001900200021002200230024002500260027002800290030003100
j f m a m j j a s o n d
4 year range, top
4 year range, bottom
2012
4 year average
400
450
500
550
600
650
700
750
800
850
900
950
1000
1050
j f m a m j j a s o n d
4 year range, top
4 year range, bottom
2012
4 year average
Chart Sources: Bloomberg, PJK International, SEB Commodity Research
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8/2/2019 SEB report: Oil price set to continue rising
8/12
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SEB Oil Market Report
Oil productsUS implied crude oil demandUS implied crude oil demandUS implied crude oil demandUS implied crude oil demand(DOE, mb/d, weekly data)
US implied gasoline demandUS implied gasoline demandUS implied gasoline demandUS implied gasoline demand(DOE, mb/d, weekly data)
13,5
13,8
14,0
14,3
14,5
14,8
15,0
15,3
15,5
j f m a m j j a s o n d
5y avg.
2011
2012
8,5
8,7
8,9
9,1
9,3
9,5
9,7
j f m a m j j a s o n d
5y avg.
2011
2012
US implied distillate demandUS implied distillate demandUS implied distillate demandUS implied distillate demand(DOE, mb/d, weekly data)
Gasoline arbitrage Rotterdam to New YorkGasoline arbitrage Rotterdam to New YorkGasoline arbitrage Rotterdam to New YorkGasoline arbitrage Rotterdam to New York($/t, daily closing)
4,0
4,2
4,4
4,6
4,8
5,0
5,2
5,4
5,6
j f m a m j j a s o n d
5y avg.
2011
2012
-25
-20
-15
-10
-5
0
5
10
15
20
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Middle distillate arbitrage Rotterdam to New YorkMiddle distillate arbitrage Rotterdam to New YorkMiddle distillate arbitrage Rotterdam to New YorkMiddle distillate arbitrage Rotterdam to New York($/t, daily closing)
-25
-20
-15
-10
-5
0
5
10
15
20
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Heating oil/Gasoil
Jet fuel/Kerosene
Chart Sources: Bloomberg, SEB C ommodity Research
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8/2/2019 SEB report: Oil price set to continue rising
9/12
9
SEB Oil Market Report
Related energy marketsUS natural gas priceUS natural gas priceUS natural gas priceUS natural gas price(NYMEX, $/MMBtu, front month, weekly closing)
UKUKUKUK natural gas pricenatural gas pricenatural gas pricenatural gas price(ICE, front month, weekly closing)
2
3
4
5
6
7
8
9
10
11
12
13
14
2007
2008
2009
2010
2011
2012
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2007
2008
2009
2010
2011
2012
10
20
30
40
50
60
70
80
90$/MMBtu (left axis)
GBp/therm (right axis)
Nordic power priceNordic power priceNordic power priceNordic power price(Nord Pool, /MWh, front quarter, weekly closing)
Continental power priceContinental power priceContinental power priceContinental power price(EEX, /MWh, front quarter, weekly closing)
20
25
30
35
40
45
50
55
60
65
70
75
80
2007
2008
2009
2010
2011
2012
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
2007
2008
2009
2010
2011
2012
EUA priceEUA priceEUA priceEUA price(ECX ICE, /t, Dec. 11, weekly closing)
CoalCoalCoalCoal pricepricepriceprice(CIF ARA steam coal, API#2, daily closing)
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
2007
2008
2009
2010
2011
2012
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
jan-1
0
feb
-10
mar-
10
apr-
10
ma
j-10
jun-1
0
jul-10
aug-1
0
sep-1
0
okt-10
nov-1
0
dec-1
0
jan-1
1
feb
-11
mar-
11
apr-
11
ma
j-11
jun-1
1
jul-11
aug-1
1
sep-1
1
okt-11
nov-1
1
dec-1
1
jan-1
2
feb
-12
mar-
12
Chart Sources: Bloomberg, SEB C ommodity Research
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8/2/2019 SEB report: Oil price set to continue rising
10/12
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SEB Oil Market Report
Market indicatorsMSCI WorldMSCI WorldMSCI WorldMSCI World equity market indexequity market indexequity market indexequity market index(weekly closing)
UBS Bloomberg CMCIUBS Bloomberg CMCIUBS Bloomberg CMCIUBS Bloomberg CMCI commodity market indexcommodity market indexcommodity market indexcommodity market index(price index, weekly closing)
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
2005
2006
2007
2008
2009
2010
2011
2012
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
2005
2006
2007
2008
2009
2010
2011
2012
JPM global manufacturing PMIJPM global manufacturing PMIJPM global manufacturing PMIJPM global manufacturing PMI(monthly, PMIs >50 expansive)
Regional PMI:sRegional PMI:sRegional PMI:sRegional PMI:s(monthly data)
32
34
36
3840
42
44
46
48
50
52
54
56
58
2005
2006
2007
2008
2009
2010
2011
2012
30
35
40
45
50
55
60
65
mar-
06
jun-0
6
sep-0
6
dec-0
6
mar-
07
jun-0
7
sep-0
7
dec-0
7
mar-
08
jun-0
8
sep-0
8
dec-0
8
mar-
09
jun-0
9
sep-0
9
dec-0
9
mar-
10
jun-1
0
sep-1
0
dec-1
0
mar-
11
jun-1
1
sep-1
1
dec-1
1
US
Eurozone
China
Reference
Regional industrial productionRegional industrial productionRegional industrial productionRegional industrial production growthgrowthgrowthgrowth(%, y/y, monthly data)
OECD composite leading indicatorsOECD composite leading indicatorsOECD composite leading indicatorsOECD composite leading indicators(monthly, 100 corresponds to long term trend growth in industrial production)
-25
-20
-15
-10
-5
0
5
10
15
20
25
mar-
06
jun-0
6
sep-0
6
dec-0
6
mar-
07
jun-0
7
sep-0
7
dec-0
7
mar-
08
jun-0
8
sep-0
8
dec-0
8
mar-
09
jun-0
9
sep-0
9
dec-0
9
mar-
10
jun-1
0
sep-1
0
dec-1
0
mar-
11
jun-1
1
sep-1
1
dec-1
1
US
EurozoneChina
8889
9091
92
93
94
9596
9798
99
100101
102103
104105
2005
2006
2007
2008
2009
2010
2011
China
Eurozone
OECD
USA
Reference
Chart Sources: Bloomberg, OECD, SEB Commodity Research
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8/2/2019 SEB report: Oil price set to continue rising
11/12
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SEB Oil Market Report
DISCLAIMER & CONFIDENTIALITY NOTICE
The information in this document has been compiled by SEB Merchant Banking, a division within Skandinaviska EnskildaBanken AB (publ) (SEB).
Opinions contained in this report represent the banks present opinion only and are subject to change without notice. All
information contained in this report has been compiled in good faith from sources believed to be reliable. However, norepresentation or warranty, expressed or implied, is made with respect to the completeness or accuracy of its contents andthe information is not to be relied upon as authoritative. Anyone considering taking actions based upon the content of thisdocument is urged to base his or her investment decisions upon such investigations as he or she deems necessary. Thisdocument is being provided as information only, and no specific actions are being solicited as a result of it; to the extentpermitted by law, no liability whatsoever is accepted for any direct or consequential loss arising from use of this documentor its contents.
SEB is a public company incorporated in Stockholm, Sweden, with limited liability. It is a participant at major Nordic andother European Regulated Markets and Multilateral Trading Facilities (as well as some non-European equivalent markets)for trading in financial instruments, such as markets operated by NASDAQ OMX, NYSE Euronext, London Stock Exchange,Deutsche Brse, Swiss Exchanges, Turquoise and Chi-X. SEB is authorized and regulated by Finansinspektionen in Sweden;
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SEB Merchant Banking. All rights reserved.
SEB Commodity Research
Bjarne Schieldrop, Chief Commodity [email protected]
+47 9248 9230
Filip Petersson, Commodity [email protected]
+46 8 506 230 47
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8/2/2019 SEB report: Oil price set to continue rising
12/12
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