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Cracks In Gasoline Demand Weigh On Oil Markets

Friday July 19, 2019

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy and metals sectors. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Weak gasoline demand drags down markets

• OECD gasoline demand has declined by 70,000 bpd over the past year, according to Bank of America Merrill Lynch. The last time demand contracted for four consecutive quarters was six years ago. Notably, however, oil prices were in triple-digit territory in 2013, not the ~$60s as they are today.

• Gasoline demand in the U.S. has declined after several years of strong growth, pushed higher by low fuel prices.

• The trend is negative for the refining sector, which is also set to see additional capacity increases. “Global refining capacity additions drastically increased in 2018 and should remain high through 2021, averaging more than 1mn b/d annually, a multiple of the 2013-17 period,” Bank of America said.

• “We expect gasoline cracks could come under further pressure later this year as new refineries ramp up and refineries return from turnarounds,” Bank of America said.

2. Commodity prices plunge, but could rebound

• Slowing economic growth has taken a toll on a range of commodities, particularly with the Chinese…



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