Refineries around Asia Join Chinese Peers in Increasing Production
Refineries from India to South Korea are expected to increase output from June, joining their Chinese counterparts as the easing of lockdown measures boosts demand for oil products, industry executives said.The average operating rate for refineries in Asia is expected to rise to 75.5% and 82.2% in the third and fourth quarters, respectively, from 72.4% in the second quarter out of total capacity of about 35 million barrels per day, according to energy consultancy FGE.Refineries in countries such as India, South Korea, Japan, and Thailand…
Oil Prices Up as Faith in Supply Cuts Grows
Oil prices rose on Tuesday, supported by growing confidence that producers are following through on commitments to cut supplies and as fuel demand picks up as coronavirus lockdowns ease.Brent crude futures were up 1.4%, or 48 cents, at $36.01 a barrel by 1210 GMT.U.S. West Texas Intermediate (WTI) crude futures gained 2.3%, or 75 cents, to $34. There was no WTI settlement on Monday because of the U.S. Memorial Day holiday."The current recovery in oil prices has primarily been driven by supply considerations. The world’s swing producers…
Oil Jumps After US Kills Iran's Soleimani
Oil prices jumped more than $3 on Friday after a U.S. air strike in Baghdad ordered by President Donald Trump killed the head of Iran's elite Quds Force, sparking concerns for an escalation of regional tensions and disruption to crude supplies.Brent crude rose to a peak of $69.50 a barrel, its highest since mid-September when Saudi oil facilities were attacked, and was up 3.7% or $2.43 a barrel by 1445 GMT at $68.68.West Texas Intermediate (WTI) crude was up $2.17 or 3.5% at $63.35 a barrel, having earlier spiked to $64.09 a barrel…
Petrochemicals: Weak Margins Sweep Asia
Asian petrochemical makers, who are unable to pass down sky-high feedstock costs, are resorting to run cuts or extending cracker shutdown periods to tie through the bad times.The gloom was evident across South Korea, Asia's top naphtha importer, as well as Southeast Asia as crude-derived naphtha premiums were recently either setting new records or were near record levels because of a supply crunch following drone attacks on Saudi oilfields in mid September and heavy refinery maintenance.Buyers are even more concerned now given mounting tensions between the United States and Iran after U.S.
Singapore Sticking with Natural Gas
Natural gas will continue to play a dominant role in generating electricity in Singapore while the state plans to accelerate the use of renewable energy, primarily solar power, in the next decade to battle climate change, a senior government official said.The cost of installing solar power has become more competitive with the use of fossil fuels, making it more attractive as an energy source to reduce pollution and meet emission targets."We are now faced with new and urgent challenges in climate change," Minister for Trade and Industry Chan Chun Sing said at Singapore International Energy Week on Tuesday.Singapore…
How Refiners Plan to Grapple With Fuel Oil Output After 2020
High-sulphur fuel oil (HSFO), essentially the leftovers of an oil refiner's output, will still flow from refineries around the world even after new rules start up in 2020 curtailing its use in the global shipping fleet, a Reuters survey showed.Sixty percent of the 33 refineries contacted by Reuters in a global survey will still produce HSFO in 2020 although the supply will tighten as 70 percent of these refiners plan to reduce their output.Starting that year, ships will have to use marine fuel, which primarily consists of residual fuel oil…
Iraq's Southern Oil Exports Close to 3.6 Mln Bpd
Iraq, the second-largest OPEC producer, is exporting close to 3.6 million barrels per day (bpd) of crude from its southern oilfields, as OPEC and others ramp up output to replace supply shortfalls from Iran and Venezuela, an Iraqi oil official said."We are a little less than 3.6 million bpd ... but we can (reach that level)," Ali Nazar Faeq Al-Shatari, Deputy Director of General State Oil Marketing (SOMO) told Reuters.Iraq's September exports from its southern oil fields are on track to be the highest on record, two industry sources said last week, surpassing the 3.58 million bpd exported in August."The increase won't be dramatic.
Asia's Gasoline Glut Drags on Refining Margins
Asia's gasoline crack on Thursday hit lowest since 2016; recent high refinery throughput countered maintenance season. Gasoline profits for Asia's oil refiners hit their lowest since 2016, while refining margins have touched a three-month low, pulled down by high crude oil prices and an oversupply of fuel. The slump in profit margins comes as prices for crude oil , which is the most important feedstock for refiners in Asia, hit their highest since late 2014 of almost $75 per barrel. The recent high refinery activity in Europe and Asia caused gasoline inventories to swell to record highs in late March…
Harvey Interrupts Asia LPG Exports from Gulf Coast
Harvey delays at least 300,000 T of U.S. LPG shipments. Shipments of liquefied petroleum gas (LPG) from the United States have been held up by the havoc wrought by tropical storm Harvey since last Friday, but Asian buyers are betting the situation will improve before supplies are critically squeezed. At least 300,000 tonnes in LPG shipments to Asia have been delayed after U.S. Gulf ports were shut, based on the estimates from four sources who buy mainly U.S. cargoes. Asia is short of LPG, which in the form of butane or propane is used for transportation, heating, cooking and petrochemical production.
Trafigura Snaps up Reliance Naptha Cargo
European trader Trafigura has bought 55,000 tonnes of naphtha from India's Reliance Industries for end-May loading from Sikka, adding to its unusually high purchases of the fuel from the Singapore cash market, traders said on Wednesday. Trafigura paid a slightly above $16 a tonne premium to Middle East quotes on a free-on-board (FOB) basis for the cargo, making this one of the highest premiums for Reliance Industries since the sales of its March cargoes. From April 7-26, Trafigura has bought more than 970,000 tonnes of naphtha for June to July delivery, making up more than 80 percent of all volumes transacted this month.
Shell Declares Force Majeure for Singapore Chemical Output
Royal Dutch Shell has declared force majeure on base chemicals from its ethylene cracker at its Bukom manufacturing site in Singapore on Thursday, following an outage the day before, a company spokeswoman said. "We had to initiate a shutdown of the ethylene cracker complex at the Pulau Bukom manufacturing site for unplanned maintenance work to repair a compressor, and recovery efforts are underway," said the spokeswoman. The Bukom site, Shell's largest wholly owned plant, has a 500,000 barrels per day (bpd) refinery and a steam cracker that produces more than 900,000 tonnes of ethylene per year.
Asian Oil Refiners Cut Output to Fight Oversupply, Low Margins
Oil refiners in Asia are processing less crude as they grapple with margins that plunged to five-year lows after the region was flooded with supply of refined products and as slowing economic growth hits demand for fuels. Asian refiners typically increase utilisation rates from July after carrying out regular maintenance in the second quarter, building stocks of fuels such as diesel and gasoline to meet demand that peaks in summer. But this year, several Asian refiners are maintaining or reducing crude throughput in July and August after refineries around the region in the first quarter binged on the cheapest crude in over a decade…
S. Korea Boosting Condensate Imports from Iran
South Korea, Asia's largest buyer of condensate, will step up purchases of the ultra light oil from Iran by more than 50 percent in June, two sources said, as competitive pricing squeezes out rival oil from Qatar. Expected June shipments of condensate from Iran may reach at least six million barrels, or 200,000 barrels per day (bpd), said the sources. This would be a record level of imports, four times that in January when sanctions on Tehran were lifted, according to data from Korea National Oil Corp. In contrast, condensate imports from Qatar in April have fallen to 5.32 million barrels, down 19 percent from January, KNOC data showed.
Asian Traders Unload Floating Gasoline as Market Flips
Gasoline shifted from tankers to landed storage or sold off; forward gasoline prices to flip to backwardation from July. The number of tankers storing gasoline in waters off Singapore and Malaysia is dwindling as the fuel is sold off or shifted to cheaper onshore storage because of changes in forward delivery terms, traders familiar with the matter said. With the economics of storing the fuel on tankers no longer viable due to a stronger forward market, there are now fewer than three long-range (LR) vessels holding gasoline in the area.
Record U.S. LPG Exports to Asia Exacerbate Naphtha Margins
U.S. LPG exports to Asia in May near February record. Asian petrochemical makers will use around twice as much liquefied petroleum gas (LPG) in June as in the previous two months, undercutting already weak margins being earned on traditional chemical feedstock naphtha, trade sources said. U.S. exports of LPG to Asia are hitting their highest rates ever this year and exacerbating the usual seasonal May-July pick-up in use of the fuel in cracking plants. This will put more short-term pressure on naphtha cracks, or profits earned from making the light fuel, which have weakened as refiners ramped up processing rates because of cheap crude.
Asia Gasoil-Indian Oil Seeks More Diesel to Plug Supply Gap
Indian Oil Corp (IOC) is seeking up to 94,000 tonnes of diesel for April delivery to various Indian ports to plug a supply gap, traders said on Wednesday. This comes at a time when a diesel supply glut is easing slightly due to the start of the refinery maintenance season in North Asia this month. IOC is looking to buy with up to 40,000 tonnes of diesel to be combined with up to 10,000 tonnes for April 14-16 arrival at Chennai and Haldia. It is also seeking up to 12,000 tonnes to be combined with up to 32,000 tonnes for April 18-20 arrival at Mumbai and Kandla. The purchase tender for the fuel, with 320 part per million sulphur content, will close on March 29.
China Slashes Q3 Product Export Quotas
Beijing has cut the pace at which it is allowing Chinese refiners to ship out oil products this year by 40 percent in its third quarter review of annual export volumes, industry sources familiar with the matter said on Tuesday. Sinopec Corp, CNOOC Ltd and China National Petroleum Corp were given an additional oil product export quota of 3.4 million tonnes for the year, down from the 5.6 million tonnes awarded in the second quarter and 9.75 million tonnes in the first quarter, the source said. Most of the reduction is being applied to gasoline and jet fuel…
Aramco Offers Rare 1.5 pct Gasoil Cargo
Aramco Trading, the trading arm of oil producer Saudi Aramco, has offered a rare gasoil cargo with a 1.5 percent sulphur content for June lifting from Rabigh, traders said on Thursday. The 500,000 barrel cargo was offered through a tender closing on May 29, with bids to stay valid until June 1. It was unclear what had led to the offer of the gasoil cargo but the 400,000 barrel Rabigh refinery is scheduled to undergo a 50-day maintenance starting Oct. The offer came at a time when Saudi Aramco's gasoil consumption is about to peak as summer approaches.
Oil Tumbles Anew as Saudi Cuts US Prices, Hikes Others
Oil tumbled by as much as $2 a barrel in the final minutes of regular trade on Monday, hitting new lows in New York as Saudi Arabia deepened price cuts for U.S. customers even though it hiked prices for the rest of the world. U.S. crude dove to its lowest since mid-2012, with technical selling swamping the market, helping drive the curve into a contango structure, with short-term prices cheaper than long-dated ones, for the first time since January. A rising dollar and concerns about Chinese economic growth set a bearish tone early in the session…
China to Import 335 MT of Naphtha, Wants More
China is set to import more than 335,000 tonnes of naphtha and diesel, rare moves for the world's no. 2 oil consumer given it has been self-sufficient at meeting domestic oil product demand, industry sources said on Friday. Unipec, the trading arm of top Chinese oil firm Sinopec, has bought more than 300,000 tonnes of naphtha for delivery into China. Traders said the firm rarely buys specifically for China. State-run Sinochem has bought at least 35,000 tonnes of diesel for October-to-November delivery and could import more, industry sources said.
