UBS: Asia Oil Explorer- Big jump in US gasoline inventories

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UBS Investment Research
Asia Oil Explorer
Big jump in US gasoline inventories
􀂄 US gasoline inventories at highest level since 1993
WTI crude oil prices fell 0.3%, ending last week at US$89.0/bbl, while Brent
prices rose 1.1%, ending last week at US$99.6/bbl. On Friday, however, oil prices
fell 2%. Easing concerns about Egypt, weak US payrolls data, and modest gains in
the US dollar contributed to the decline. According to the US Department of
Energy (DOE), for the week ended 28 January, crude inventories rose 2.6mbbls to
343.2mbbls versus Reuters’ consensus of a 2.7mbbls build. Gasoline inventories
rose 6.2mbbls to 236.2, its highest level since 1993.

􀂄 Refining margins decline slightly WoW
The Reuters Singapore complex refining margin index averaged US$6.7/bbl last
week, down from US$7.1/bbl the previous week. Gasoline and diesel spreads
versus Dubai were up US$0.9/bbl and US$0.7/bbl, respectively, WoW. The LPG
spread fell US$4.7/bbl WoW while the naphtha spread fell into negative territory
for the first time in several months.
􀂄 Integrated stocks have outperformed in the past month
For the month ended 4 February, and based on simple average performance,
integrated stocks in Asia under UBS coverage rose 2.9%, while, on an average,
refining and E&P stocks fell 3.0% and 2.7%, respectively.
􀂄 Top picks
Our Most Preferred stocks in Asia are PetroChina, SinoTech, Essar Oil, Siam
Cement, S-Oil, and Nan Ya Plastics.