As crude oil swells, volatility-hungry traders turn to refined products

martes 24 de noviembre de 2015 03:30 GYT
 

* Crude oversupply limits scope for profits

* Strong gasoline demand offers rare arbitrage options

By Ron Bousso and Libby George

LONDON, Nov 24 (Reuters) - In a world overflowing with oil, traders are looking to once-secondary markets such as gasoline and diesel for profits, as limited supplies and rapidly changing demand offer the volatility they thrive on.

In recent months, surprise shutdowns at relatively small refineries or extreme weather conditions have led to spikes in prices of gasoline and other products - allowing traders to cash in by filling the shortage or making a bet on paper price movements.

The rise of huge refining hubs in Asia, the Middle East and on the U.S. Gulf Coast has also led to the birth of long supply routes for products that rarely existed before.

This stands in contrast to crude oil, where a rising glut in supplies has suppressed much of the physical gyrations that traders make their money on.

The oil overhang, however, has sparked red-hot growth in demand from consumers lured by low prices. This has exacerbated regional imbalances between oil refineries that produce diesel, gasoline and jet fuel and the demand centres where they are consumed.

Limited supply of gasoline relative to global demand is now expected to lead more frequently to price spikes and new arbitrages, said Michael Dei-Michei, analyst at Vienna-based JBC Energy.   Continuación...