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OIL PRODUCTS
A substantial slowdown in motor fuel import demand and ailing pricing complex over Q4 are dampening the repercussions from Red Sea risks according to Vortexa.
- Weak demand drove a year on year drop in global fuel imports in Q4 2023 with gasoline and diesel imports lower y/y for each month between October and December.
- Arrivals into “import ports,” where at least 90% of flows are imports but excluding trading hubs, had shown record arrivals of diesel in 11 out of 12 months over H2 2022/H1 2023. The imports were driven by the post-Covid recovery, the rerouting of Russian diesel away from Europe, replacement supplies and stockbuilding ahead of winter.
- In Jan-Sep 2023, 6 out of 9 months also yielded record imports for gasoline and blending components.
- “The fact that cracks (and the entire market, including structure) have been correcting lower over 4Q clearly puts the blame to the demand and not the supply side,” Vortexa said.
- Weak demand is likely driven by the end of the post Covid recovery and after two years of strong inflationary pressure and a “pretty clear” manufacturing recession. The exception is some possible upside in Asian jet fuel demand.
Source: Vortexa
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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