Latest News
03.09.10
Weekly oil price reviewView
Front month WTI followed a similar pattern this week to last, losing ground during the first two days and staging a recovery as the week moved on. WTI closed down just 0.2% on Thursday at $75.02 from the close last Friday at $75.17, after dropping below $72 during late trading on Tuesday. A stronger dollar and expectations of more negative economic news through the week began the decline during low volume trading on Monday with London closed. But it was Tuesday that saw the real move downwards on expectations of a rise in inventories and continued weak gasoline demand – despite slight gains on the equity markets. By Wednesday, with inventory and demand updates less bearish than expected, coupled with a falling dollar and bullish manufacturing news, a correction took hold, wiping out much of the loss from Tuesday. This continued into Thursday with further positive economic news, also pushed up on the news of another platform explosion in the Gulf of Mexico.02.09.10
PBF Energy reportedly buying second Valero refineryView
Valero's 185,000 bpd Paulsboro refinery in New Jersey is reportedly being sought by PBF Energy, the partnership which bought the company’s 182,200 bpd Delaware City refinery in June. PBF Energy is a partnership between Petroplus, Europe's largest independent oil refiner, Blackstone Group and First Reserve, both private equity firms. Reuters are reporting the Paulboro refinery is likely to sell for a higher price than the $220m paid for the Delaware City refinery, as former is currently in operation, whilst the latter was shutdown in November due to poor refining margins. Separately, Total has received offers for its 223,000 bpd Lindsey refinery, with a target to have sold it by year-end.01.09.10
Transneft ahead of schedule for start-up of BPS-2View
Transneft is reporting that it is eight-to-nine months ahead of schedule with the construction of the BPS-2 pipeline that will allow shipments of Russian crude to Ust-Luga, likely diverting exports from overland shipments via Eastern Europe. The last part of the pipeline may be completed as early as October, when Transneft will start working on the pumping stations. The pipeline may be ready to start pumping crude by the second quarter of 2011, although development at the port is thought to be behind this schedule. Nevertheless, the BPS-2 infrastructure seems to be on course for start up sometime in 2012. The first phase of the pipeline will have a capacity of 600,000 bpd.31.08.10
Idemitsu Kosan set to increase oil products exportsView
Idemitsu Kosan, the Japanese refiner, has said it will increase oil product exports from around 52,000 bpd at present to around 60,000 bpd later this year as it looks to capitalise on overseas demand as domestic demand wanes. Japan has seen an increase in gasoil and jet exports from refiners recently due to changing consumption trends in the home marlet. Idemitsu Kosan's 120,000 bpd Tokuyama refinery will be shut from late September in a bid to reduce output, however upgrade work will be done during the shutdown – the company has a total refinery capacity of 640,000 bpd, implying just short of 10% of all output is now destined for export.27.08.10
Weekly oil price reviewView
Oil prices have been following the rollercoaster equity markets this week, losing ground on Monday and Tuesday, and moving back up on Wednesday and Thursday. By the close last night WTI was only 10 cents down on last Friday's close, despite having dropped 3.7% by mid-trading on Wednesday (although the contract has rolled-over in that time). The declines on Monday and Tuesday were inline with the shedding of riskier assets as doubts over the strength of the economic recovery continue, as well as the weight of fundamentals, especially in the gasoline market with continued rising stocks and falling likelihood of hurricane disruption – which saw gasoline close at its lowest level of the year. By Wednesday, despite bearish US DOE stocks news (crude +4.1m bbl, gasoline +2.3m bbl, distillate +1.1m bbl), crude pushed upwards on the back of over-selling during six straight days of losses. Better than expected US unemployment data and a weaker dollar kept prices moving upward on Thursday, fuelled further by short-covering.27.08.10
IGC sees small reduction in grain tradeView
The International Grains Council has just released its latest report and the first one since the embargo on Russian wheat exports and ahead of the Ukrainian restrictions. Overall grain trade (wheat and coarse grains) is seen as declining slightly to 232 Mt (from last month's forecast of 234 Mt) in the current 2010/11 trade year. Production of wheat - the crop most affected - in 2010 is marked down quite sharply to 644 Mt from the forecast of a month ago (651 Mt) and compares to the 677 Mt of 2009. Coarse grain output this year is forecast at 829 Mt (2009: 809 Mt) with trade marked up to 90 Mt (2010/11) from the 86 Mt of the trade year just ended.26.08.10
Petrobras output up 1.52% in JulyView
Petrobras saw oil and gas output rise 1.52% in July month-on-month to 2.01m barrels of oil equivalent (boe) per day. This rise from 1.98m boe per day in June was led by the return to production of an offshore rig after scheduled stoppage. Separately, Statoil has said the 2.5bn barrel Peregrino oil field offshore Brazil is due to begin production in 2011 – with production expected to peak at 100,000 bpd. The initial aim is to retrieve 20% of the reserves, or 500m barrels. The field is 60% owned by Statoil and 40% by Sinochem. Statoil owned the entire oil field until June this year following two separate purchases of each half of the oil field, 50% from EnCana and 50% from Anadarko, before divesting 40% to Sinochem.26.08.10
France coal imports increaseView
France is once of the larger coal importers in Europe with some 15.9 Mt last year. This year imports on a y-t-d basis have increased by 32% and at mid-year stood at 9.9 Mt (coking 2.5 Mt, steam 7.4 Mt). Importantly for the shipping market France's second largest supplier of coal after the USA is the long-haul supplies from Australia (mostly coking coal) which this year has supplied almost a fifth of the country's supplies. In fact some 58% of France's imported coking coal comes from Australia with the substantial part of the balance (37%) from the USA. On the steam coal side Colombia, South Africa, the USA and Russia are the main suppliers accounting for two-thirds of imports.25.08.10
The Caspian Pipeline Consortium (CPC) is considering borrowing $1bn around 2012-13 to fund expansionView
The Caspian Pipeline Consortium (CPC), which in 2008 agreed the main principles of expanding the pipeline from 34.57m tonnes per annum to 67m tonnes per annum, is considering borrowing $1bn around 2012-13. The total cost of expanding the 1,580km pipeline, which runs from the Tengiz oil field in Kazakhstan to a terminal near Novorossiysk on Russia's Black Sea coast, is expected to not exceed $4.6bn, and be complete by 2014-15. The pipeline is privately owned: 31% by Russia, 20.75% by Kazakhstan, and the remainder held by a consortium led by Chevron. The doubling of capacity should double current revenues, from $1.2bn per annum at present to $2.5bn per annum by 2015, meaning the consortium hopes to have covered the costs of the expansion by 2018-19.25.08.10
Crude Steel production in JulyView
Global crude steel output in July fell for the second month to 114.8 Mt after its revival in May when it touched a new record at 124.6 Mt. In the period Jan-July output grew 26% y-o-y however compared to the same period in 2008 this is only a marginal 1.0% increase (2008: 812 Mt; 2010: 820 Mt). China's output at 375 Mt for the year so far is 18.4% up on last year and every month this year has seen output above 50 Mt. For the world excluding China output was 445 Mt and this is still substantially down on the 502 Mt of 2008.
