In an oil and fuel business report despatched to Rigzone on Wednesday, Macquarie Strategists famous that they continue to be brief time period bullish as they anticipate balances to tighten because of OPEC cuts and growing refining runs.
“In August, we anticipate a attract crude inventories as just lately underperforming refinery runs shut the hole versus expectations,” the strategists acknowledged within the report.
“That mentioned, with out an acceleration of OPEC cuts, the attracts could disappoint versus market expectations. After the present rally, we anticipate a value correction in 4Q23 / 1Q24 as a consequence of candy manufacturing development within the U.S. and N. Sea and decreased OPEC+ compliance,” the strategists added.
Within the report, the Macquarie strategists famous that refinery margins have continued to strengthen “as runs have elevated slower than anticipated popping out of spring T/A season”.
“Refining runs have missed expectations as a consequence of a mix of start-up challenges at new Center Jap amenities, decrease European runs, traditionally excessive temperatures lowering achievable capability, and better unplanned outages in the US,” they added.
“We estimate refining runs will doubtlessly improve by round 1.5 M BPD between now and fall turnarounds. The rise in runs might stress margins as temperatures fall and new kits in Oman, Kuwait and Iraq proceed to ramp,” they continued.
The Macquarie strategists additionally highlighted within the report that each West Texas Intermediate (WTI) and Brent constructed managed cash and different web size over the past week, “with WTI growing by 14.9K and Brent rising by 28.8K”.
“WTI speculator size continued its upward trajectory led by a discount in brief positioning with an extended/brief ratio transfer of two.59 to three.26,” the strategists mentioned within the report.
“Brent noticed a smaller transfer in comparison with WTI with a larger improve in longs than lower in shorts with an extended/brief ratio going from 0.74 to 0.79,” they added.
“Brent recorded a big fall in business size, reducing by 34K contracts as brief positions grew by 31K over the previous week,” they continued.
Refinery Margins, Q3 Bullish
In a separate report despatched to Rigzone on July 28, Macquarie strategists mentioned refinery margins “proceed to strengthen in distinction to our view and what we consider was consensus”.
“We now anticipate margins to dump in August. The market anticipated a big improve in runs following spring turnarounds, a course of that ought to have softened margins underneath virtually any demand state of affairs,” they added in that report.
“We modeled runs to extend from 81.5 M BPD to 84 M BPD between Might and July. As a substitute, runs are at the moment solely 82.5 M BPD by our estimates however might attain 84 M BPD in August or early September earlier than the autumn T/A (upkeep) season,” they continued.
In one other report despatched to Rigzone on July 19, Macquarie strategists mentioned they remained brief time period bullish by means of 3Q23 “as OPEC+ cuts and elevated runs, each of which have began slowly, ought to tighten balances”.
“Each provide and demand helped oil value motion final week. On the demand facet, the U.S. posted an acceleration in runs with throughput rising by 629 Ok BPD. Provide tightness got here by way of a brief disruption in Libya and a small manufacturing outage in Nigeria,” the strategists added in that report.
“Following the present rally, we anticipate a value correction in 4Q23 / 1Q24 because of candy manufacturing development within the US and N. Sea, waning OPEC+ compliance and slowing demand development as a consequence of recessionary impacts,” the Macquarie strategists went on to state within the July 18 report.
The strategists highlighted in that report that each WTI and Brent constructed managed cash and different web size over the prior week, “with WTI rising by 29.0K and Brent growing by 33.1K”.
“WTI speculator size maintained its upward trajectory led by a rise in lengthy positioning with an extended/brief ratio transfer of two.11 to 2.27. Brent demonstrated a sizeable improve in longs as nicely with an extended/brief ratio going from 0.74 to 0.81,” the strategists mentioned within the report.
“Each WTI & Brent business size fell for the second week, falling by 16K and 36K respectively, as lengthy positions declined by greater than brief positions rose,” they added.
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