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Tuesday, November 13, 2018

Commercial analysis




China opening up for private crude oil import

China's crude imports were up 7.5% in the first half of 2015 to 6.59 million bpd, although still behind US imports of about 7.3 million bpd for the year so far, according to figures from the US-based Energy Information Administration (EIA). Reuters reports that analysts have said that China has been taking advantage of oil prices that are about half of last year's peak to fill its strategic...... Login to view this article


Iran by and by fully returning to the market?

In 2010 Iran was the 4th biggest crude oil producer with a production of some 3.7 mbd.  In 2014 it was the seventh biggest oil producer producing 2.8 mbd. We see from the below graph that the shortfall in Iranian crude oil production has been more than compensated by increased Iraqi production, which, beside the US, has had the strongest increase in oil production in the world the last couple o...... Login to view this article


Supply of oil overtakes demand

As seen in the graph below, the supply of oil has superseded demand since 2013 and the current level on a yearly basis is some 2.4 mbd, or a VLCC plus a panamax load per day. With some 2,000 VLCC spot contracts in 2014, this would mean an increase in activity of 18%. According to the Paris-based International Energy Agency (IEA) the main reason why supply is so much higher is an increase in...... Login to view this article


Oil demand expected to slow down in 2016 – IEA oil market report

According to the Paris-based International Energy Agency (IEA) Monthly Oil Market Report received today, global oil demand growth is forecast to slow to 1.2 mbd in 2016, from an average 1.4 mbd this year, with strong consumption expected in non-OECD Asia. World oil demand growth appears to have peaked in 1Q15 at 1.8 mbd and will continue to ease throughout the rest of this year and into next as...... Login to view this article


LNG tonnage balance worsening?

The general consensus about the medium-term prospects for the LNG sector is “over-optimistic” according to Noah Parquette, analyst with JP Morgan, with spot rates likely to remain weak for longer than is widely believed. While Parquette says the LNG sector is starting to see long-term structural changes, he believes the increase in demand is already mostly matched by the newbuilding orderbook....... Login to view this article


The strong tanker market continues, but fleet increase may catch up

DNB is making positive noises both in the crude and LPG tanker sectors. It expects 2016–2017 crude tanker tonne-mile demand to grow by 4%, up from the -2% estimated for 2015, with volume growth of 2%, up from the 1% estimated for 2015. DNB’s views are underpinned by changing trading patterns, with Asian tonne-mile absorbing the US shortfall, OPEC releasing its spare capacity, growth in and...... Login to view this article


BP Review – LNG trends

LNG production has experienced tremendous growth, but most producing areas have started to level off. Last year it was mainly the US (+5.8%), Saudi Arabia, +8.2% , Canada (+3.8%) and Iran (+5.2%) that had significant growth, although Russia declined by 4.3%.  The US represented 80% of the growth in natural gas in 2014. Russian gas production is some 170 bn cum above consumption and some 120 bn...... Login to view this article


BP Review – oil product trends

The BP Review is one of the longest running statistical periodicals on oil and energy that is publically available and provides some unique trade figures. Oil product trade volumes only increased marginally in 2014 by 1.6% and crude oil declined by 0.1%. The big increases in products exports in 2014 were from the US and the Middle East. increasing from the US by 24% in 2013 and by 16% in 2014,...... Login to view this article


US oil production levelling out

According to the US-based Energy Information Administration (EIA), total US crude oil production averaged an estimated 9.6 million barrels per day (mbd) in May, but it is expected to generally decline from June 2015 through early 2016 before growth resumes. Projected US crude oil production averages 9.4 mbd in 2015 and 9.3 mbd in 2016. We are now starting to see the effects of the decline in...... Login to view this article


The gas tanker industry today

The gas tanker sector is a rapidly expanding industry. The LNG fleet has increased five times since 1998, the LPG fleet by 1.5 times. Data from maritime analysis firm showed that 13 LNG tankers have been scrapped since 2010, built from 1969 to 1978, the latter two being Shell tankers. Another 42, according to Norwegian investment bank Arctic Securities, which are 30 years or...... Login to view this article


Long haul trades drive the VLCC market

Average monthly long haul trades for Americas/East have increased by 12.5% the first of 2015 compared average monthly figures 2014 and has more than doubled since 2010. West Africa Eastwards so far this year is at the same level as last year, but has increased more than 2.5 times the level in 2010 according to figures from US shipbroker McQuilling Services.  Overall fixture activity is below la...... Login to view this article


Cheap oil fails to spark consumption

Financial Times report that cheap oil fails to spark consumer spending boom.   When the price of Brent crude more than halved in the second half of last year, many predicted 2015 would be a boom time for consumers     But with shoppers, particularly in the US, acting more frugally than anticipated, the benefits of the oil windfall — totalling more than $200bn for the US, eurozone, UK and Japan,...... Login to view this article


Accelerating increase in oil demand – IEA

In this week’s oil market report, IEA reports that despite slowing US light tight oil (LTO) output, global oil supply growth remained at a steep 3.2 mbd year-on-year in April. At 95.7 mbd, total oil supplies were flat from March as higher OPEC output offset a drop in non-OPEC. Non-OPEC supply growth for 2015 is projected at 0.830 mbd Russian oil companies seem to be coping exceptionally well wi...... Login to view this article


Atlantic/China tonne-miles help the market

Even if the VLCC rates have softened somewhat in recent weeks, the tanker market is still generally relatively strong.  Spot market activity does not appear to be that high and for the first four months of this year spot figures for selected VLCC trades are slightly declining, according to US broker McQuilling (see graph below). The Clarkson VLCC fixtures also show a decline of 2.4% for the...... Login to view this article


The oil price put in perspective

While the oil price has now rebounded somewhat it is only now that we start to see the widespread consequences of the plunge in prices starting at the end of 2014. Although the effects of a drop in the oil price happen gradually, iit will take many months before the full effect of a sustained low price will appear. The effects will be widespread and mainly positive for the consumers and negativ...... Login to view this article


Russian oil production hit the latest in a line of post-Soviet highs in March

Oil production in Russia was forecast to decline in 2015 by 0.030 mbd to an average of 10.54 mbd. However, despite lower oil prices and limited access to financing because of sanctions, Russian companies continue to increase crude oil production, which reached another post-Soviet record of 10.71 mbd in March, a hike of 1.34% on the year, although NGLs and condensates were supporting output in...... Login to view this article


OPEC Oil Production in March peaking – IEA

According to the Paris-based International Energy Agency’s (IEA) April Oil Market Report the forecast of global oil demand for 2015 has been raised by 90 kb/d to 93.6 mbd, a gain of 1.1 mbd for the year. The notable acceleration on 2014’s 0.7 mbd growth follows cold temperatures in 1Q15 and a steadily improving global economic backdrop. Global supply rose by an estimated 1 mbd month-on-month in...... Login to view this article


Saudi oil production at record level

Stocks in the US have continued to build steadily by some 1.1 mbd since the turn of the year and US crude oil imports increased strongly to 8.2 mbd in the 14th week of the year. This, according to the US-based Energy Information Administration (EIA) report, is despite a decline in US crude oil production of 1.5%. It will be exciting to see whether this is a temporary situation or the beginning ...... Login to view this article


Stock building continues

The US has kept importing crude oil at the same level as in 2013, but commercial oil stocks have reached an all-time high. The US commercial crude stocks as of 20 March was 82 m barrels higher than at 2 January 2015, i.e. the stocks have been built up by on average 1.1 mbd every day, or in other words some 40 VLCC loads. The Paris-based International Energy Agency (IEA) reported that the total...... Login to view this article


Structural changes in the oil market

OPEC production levels have traditionally been one of the best tanker market indicators. The tanker market became more complex when China started to take more oil from far away sources in Latin America and West Africa. And, after lending more than US$56bn to Venezuela, then China also became strongly connected to this oil producer, in particular after the fall in the oil price, when it will tak...... Login to view this article

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Bill Box
Senior Manager, Commercial
P: +44 20 7977 7023