Oilytics Weekly Chart of the Day recap: Week 3

Chart 1:

The latest Brazil customs data showed Gasoline imports surge to a record high. Official customs data showed imports at 1/3 from US and the rest 2/3 from NW Europe. 2023 will continue to see strong Brazilian product demand, which will keep this import pull strong. (Source: Brazil Customs)?

Chart 2:

Chinese refinery runs came in at 14.2MMBD in December, the 2nd month in a row where runs were higher than 14MMBD. The 2022 average saw an annual decline (-3.4% y/y) for the first time in 20 years as the refinery system showed a lot of slack capacity, especially in the summer. However, rising product exports and growing domestic demand post Covid zero policy should keep runs elevated in 2023. (Source: NBS China)

Chart 3:

Quarterly data from Europe’s ACEA showed Diesel’s market share continues to decline in new car sales. As of Q3 2022, Diesel comprised 14.5% of new car sales while BEV (Battery Electric Vehicles) comprised 12.4%. BEV’s market share had briefly eclipsed Diesel in Q4 2021, but this trend is likely to continue in 2023. As early as 2017, Diesel made up 45% of new car sales and has seen market share evaporate every quarter since then. (Source: ACEA)

Chart 4:

Chinese product exports of the 3 main products surged to the highest level since April 2020. With higher export quotas and domestic demand starting to surge in January, refiners were able to ramp up product exports. Despite the surge in Nov/Dec, 2022 exports of Gasoline were down by -14% y/y, and Diesel -37% y/y. (Source: China customs)

Chart 5:

Open interest continues to surge for Brent and WTI in the new year, rebounding from the multi-year lows seen post-Russian invasion. With Brent Cal24 touching $80 for the first time in 6 weeks, deferred crude continues to outperform despite the volatility in the front month. Deferred crude bullishness will continue to attract new passive investors back into the market. (cb – Brent, cl = WTI, Source: ICE and CME)