Latest News
03.07.09
Kashagan oil field costs to fallView
Kashagan, the giant delayed-prone oil field in the north of the Caspian Sea is set to benefit from a fall in development costs due to the global economic downturn. Development costs have soared to $136bn as start-up has been pushed back to 2013/14, but now the members of the international consortium are able to significantly cut project expenditures whilst still keeping the latest time-frame. Necessary efforts will be made to adjust existing contracts in accordance to new conditions. The consortium members are Kazmunaigas (KMG), Eni, Exxon Mobil, Shell, Total, ConocoPhillips and Inpex. Production is set to commence in 2013/14, reaching 450,000 bpd within two years, and reaching a potential output of 1.5m bpd by the end of next decade.03.07.09
India coal imports make shaky startView
Indian coal imports are expected to rise significantly this year but there has been a shaky start to proceedings. Not only has the only data available for this year shown a 26% decline over the same period last year but shipments from domestic mines have been rising. This has led to a rise in stocks to around 11 Mt according to the Electricity Authority. With new plants coming on steam later this year and generally low stocks levels (despite the latest rise) we could see significant changes in the second half of this year.02.07.09
OPEC production up again, compliance slipsView
According to a survey of oil firms, OPEC officials and analysts, OPEC-11 production for June was up 0.43% on May, to 26.02m bpd from 25.91m bpd. This was despite cutbacks in Nigeria caused by militant attacks. The increase has meant the group has now shed just over 3m bpd from its September 2008 production levels, still 1.175m bpd short of the 4.2m bpd quota implemented on 1st January. Compliance is now 72%, down from 74.6% in May. The slippage is likely due to the increased oil prices, which give little short term incentive for group members to cut output further. In other OPEC news, the Kuwaiti oil minister has said the group is unlikely to raise output when they meet next in September, citing continued over-supply in the oil market.02.07.09
Chrome Ore Exports holding upView
Despite the global downturn in steel production there remains one country where output remains ahead of the same period last year. This country is of course China where, to the end of May, output was up 0.7%, a figure not be dismissed out of hand when the rest of the world is showing a fall of 36% y-o-y. As a result demand for China's raw materials for the production of steel are also ahead: iron ore by 26% and coking coal by a massive 250%. So, too, are exports of Chrome ore from South Africa to where the vast majority of the exports are shipped to China. By the end of April S.Africa's chrome exports were ahead by some 60% of which 75% had been sent to China.01.07.09
Oil imports down east and westView
Latest import figures show crude oil imports are down in both Japan and the US. Japanese crude imports were down 17.5% year-on-year, falling to 3.4m bpd in May. Supplies from Saudi Arabia were down by the same level to just over 1m bpd, but is still Japan's largest supplier ahead of the UAE and Qatar, which were down 19% and up 19% respectively year-on-year for supplies. US crude oil imports for April were down nearly 800,000 bpd year-on-year, despite being up by 70,000 bpd in March year-on-year. Oil products imports for April were also down by 600,000 bpd year-on-year. US oil products exports were up 135,000 bpd, whilst demand is estimated to be down 8%, or 1.58m bpd. The fall in imports and rise in exports accounts for most of the demand change, with a build in stocks taking up the balance.01.07.09
US EIA weekly inventoriesView
US EIA weekly inventory data released today for the week ending 26th June show crude oil stocks were down 3.7m barrels, whilst oil products were up a combined 5.2m barrels, 2.3m barrels for gasoline and 2.9m barrels for distillate. Distillate stocks are at their highest level since January 1987.01.07.09
Brazil Iron Ore ExportsView
Exports of iron ore from Brazil fell heavily in the month of May. In May 2008 exports totalled 35 million tonnes - the largest volume ever recorded from Brazilian ports although it has to be noted that there was a strike by the statisticians at the time so the figures, although official, are questionable. Assuming they are correct (for guidance the average for the subsequent five months was 27 Mt) the comparison with May this year is even more stark. In April exports totalled 23.5 Mt and no one is questioning those figures so the slump to just 15.3 Mt in May represents a real fall. Countries most affected were China which saw a 5 Mt reduction and Europe generally. In 2008 Europe imported on average 6.8 Mt. This year the region has been importing 4.4 Mt per month on average indicating a significant reduction in Cape and Panamax demand.30.06.09
Chinese increase gasoline and diesel prices for third time this yearView
China has increased gasoline and diesel prices by 9% and 10% respectively, the third rise since March. The move helps prevent Sinopec, the nation's largest refiner, from making losses as crude oil costs rise – which has previously said crude oil levels above $60/barrel were uneconomic. China's consumer prices fell for a fourth successive month in May, making the impact of increasing fuel costs less severe for consumers, however Chinese motorists will now pay more per gallon than their US counterparts. The government is able to control prices under a mechanism introduced in December 2008, whereby fuel prices can be adjusted when crude oil costs change by more than 4% over a 22-working day period.30.06.09
Record Brazil Soybean ExportsView
Record Brazilian soybean exports were seen in April in data just released. In total some 4.5 million tonnes of soybeans were exported and, when combined with a further 1.3 Mt of soymeal exports in the month, underlines the importance of the world's second largest producer and exporter. Main markets include China and the EU which together account for 84% of all exports.29.06.09
Chinese crude oil imports up, South Korean downView
Chinese crude imports rose to 4.04m bpd in May, a 5% year-on-year increase. Iran saw an 88% increase in exports to China making it the largest supplier, with 730,000 bpd. Kuwaiti, Libyan and Russian exports were also up significantly, by 194%, 91% and 82% respectively. Conversely, South Korean crude imports fell 18.3% in May year-on-year, to 2m bpd. Iran also featured prominently on the year-on-year supply changes, up 55%, making it the country's fifth largest supplier.
