February 12, 2019

February Refined Products Price Update

The Short Term Outlook team recently launched the inaugural Monthly Refined Product Price Forecast Update for its clients. In this report, we review our price forecast concerning current prices and discuss trends we see influencing prices over the next month. Please see an excerpt below.

Current Price Outlook versus Actual

Fuel oil, jet fuel, and diesel are in higher demand than gasoline. Much of the incremental growth will come from primary demand markets like the US, Brazil, China, and India, but this growth will be mitigated due to continued global economic headwinds.
Currently, refineries are "awash" with winter-grade gasoline, after strong diesel cracks led to increased production. In the US, refineries will need to shift to summer-grade gasoline by May 1, regardless of how much winter-grade gasoline is in stock. This could lead to price increases even in a high-stocks environment. We expect that in the month ahead prices will continue to strengthen with the normal seasonality trends. Jet fuel price growth seems assured with the most significant markets continuing to show increases in air travel. Fuel oil performance has been boosted by demand from power generation in Asia and heating after several recent cold spells.


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