Paraffin Wax Price

oil price parallel with wax price

Following the steep petrol increase in March this year, the price of all grades of petrol will rise by 28c a liter next week, keeping the cost of fuel at a record high. Diesel will cost an addition 9.4cents per liter and paraffin up to 12cents more. This will affect candle price after Easter time. Paraffin has become major oil product recently with its sub branches.

Oil market abandons 2017

The oil market has all but abandoned the hope of a re-balancing any time soon, with the re-emergence of a pricing structure that signals investors expect a glut to endure into next year.

when oil prices for immediate delivery are lower than forward contracts comes days after several Wall Street banks warned investors of a deteriorating outlook for 2018 because of strong U.S. shale production growth and the rising output in Nigeria and Libya.

The weakness is particularly visible in the widening price difference between Brent crude for delivery in December 2017 and December 2018 - a popular trade known in the industry as Dec-Red-Dec.

Royal Dutch Shell Plc. this week lifted its force majure on Forcados crude from Nigeria after a disruption that lasted 472 days. The return of Forcados will add another 200,000 bpd to 250,000 bpd of high quality, light and sweet crude into the Atlantic just as regional refiners are already awash with similar grades from the U.S., North Sea and Africa.

Spread plunge

The Dec-Red-Dec spread is now trading at its weakest since Nov. 30., when OPEC agreed to cut output in an effort to bring oil inventories down to their five-year average. The spread traded at plus $1.56/bbl in late February amid hopes the cartel, which controls 40% of the world & rsquo;s output, would successfully bring stockpiles down. Butthe spread came under pressure as those inventories continued to build through March, before falling in line with seasonal patterns.

As investors worried about the re-balancing process, trading volumes in the Dec. 2017-Dec. 2018 spread surged to a record high on Thursday, according to exchange data compiled by Bloomberg. The Brent spread saw the equivalent of 65 MMbbl traded, and the WTI equivalent traded 41 MMbbl -- far exceeding their average trading volumes over the prior two weeks.

Since the Organization of Petroleum Exporting Countries and allies agreed to extend the production cuts for another nine months, investment banks including JP Morgan Chase & Co., Morgan Stanley, HSBC Holdings Plc., UBS AG and Barclays Plc have warned about a deteriorating outlook for next year. The banks have almost unanimously blamed rising U.S. shale production and fears about OPEC s exit strategy from its cuts.

The hike brings the cost to R12.22 per litre in Gauteng and R11.87 per lire for 95 octane petrol. Diesel will now cost R10.98 per liter in Gauteng and R10.73 per liter at the coast. The department of energy announced today that higher international oil prices affected the petrol price. While global diesel prices dropped, a weaker rand affected the increase. 

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