Christophe Barret, Global Oil Analyst, said, “Economic recessions are having an asymmetrical impact on oil demand, impacting gasoil demand more than gasoline demand. Refiners, having to meet gasoline demand, have produced gasoil in excess, which has been put into stocks. High gasoil stocks put pressure on refinery margins and will depress crude oil demand in the coming months. Atlantic Basin oil market appears particularly weak, with demand getting little support from a slow economic recovery. The Atlantic Basin is likely to present an excess of gasoil and a deficit of gasoline. Asia oil markets look better, with strong demand recovery in India and China. However, a very large increase in refining capacity in 2009/2010 will put pressure on world oil product market in the coming months, and the region cannot be seen as a providential outlet for the Atlantic Basin overhang of gasoil. The overall oil supply/demand balance is expected to remain weak through the end of second quarter 2010, when we see the first large stock draw happening. As a consequence oil prices are expected to decline from their current high levels to USD 65/bl in 2Q10, before rebounding to USD 70-75/bl in the second half of 2010.”

 

The final part of Fixed Income Markets Investment Series 2009 will be held in Hong Kong on December 8^th, 2009.