Gepubliceerd Jacob on 7 December 2018 12:02:17
ARA Tank Terminals Market outlook
The ARA region is an important trading hub in the Northwest Europe due to it’s infrastructure and fundamentals to serve the physical market for liquid trade. The ARA region provides refining facilities, storage and blending capacities, various transport options like shipping, train and pipeline. Currently around one third of the third party oil storage is located in the global oil hubs; Singapore, Fujairah, Houston and the ARA region, of which about 9% in the ARA region.
Market circumstances for the terminal sector change constantly. A big factor in driving demand is the shape of the oil futures forward curve. When oil prices decrease and the delivery time increases, this is called backwardation, there is less incentive to store oil products and as a result inventory levels decrease and utilization rates drop. Backwardation was applicable between 2011 and 2014 and from 2017 till now. Due to this situation market fundamentals were and currently are depressed. Current supply situation does not fit current demand situation.
As mentioned before the shape of the oil futures forward curve is important, and therefor we need to focus on Brent crude calendar spreads. The most important forward curve that drives other futures is that of the Brent curve. The graph below shows EIA’s forecast for the balance between supply and demand(red bars). As can be seen from looking at the cumulative stock change for this related period the market is likely to be slightly oversupplied in 2019. Based upon this forecast we expect calendar spreads to narrow in 2019.
PJK International has developed a ARA Tank Terminal market report. It focusses on the tank storage market developments and outlook. It tries to develop a reliable view on profitability of the ARA tank storage market in the medium term future: between now (2018) and 2023. Long term forecasts for oil products demand (till 2035) are also provided in this report and these forecasts give an indication to possible future states of the tank terminal sector. The report will provide you with a lot of information for you to be able to make better commercial decisions.
Artikel heeft nog geen reacties. Klik om te lezen/reacties te plaatsen