Gasoline: Summer Boost To Be Tempered By Well-Supplied Market
Q114 affirmed growing weakness in the gasoline market as prices continue to fall. We maintain that 2014 and beyond will continue to see a downtrend in gasoline prices alongside a fall in crude oil prices. We have downwardly revised our forecast for gasoline for the rest of 2014 especially in Rotterdam and New York, as weak consumer demand and greater fuel efficiency continues to hit growth prospects in these countries. We are more optimistic about prospects for gasoline in the Singapore market, as private vehicle demand for gasoline in emerging economies in Asia continues to grow.
Weak Q114 For Gasoline
In Q114, gasoline traded at its lowest level in the corresponding period in four years. This is partly a reflection of the fall in sentiment surrounding political risk and bullish sentiments regarding Chinese economic growth, which has in turn hit crude oil feedstock prices. As shown in the chart below, crude oil prices also averaged at its lowest point in the corresponding period in Q114.
|Corresponding Q1 Prices - Crude (LHC) & Gasoline (RHC), USD/bbl|