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Sunday, January 21, 2018

MARKET INFORMATION

** North Sea oil production peaking 2001 - Wood Mackenzie

** US Energy Administration long term energy forecast

** US oil production declining, product output at record level, stocks down

** “All time high” market - index

** 94 VLCCs fixed to 2002 and later, 114 oil/state owned, 232 in the spot market

** E-commerce needs to find a faster and better system than the current ones

North Seea oil production peaking 2001 - Wood Magazine

According to a presentation by Julian Kennedy at a seminar in Paris on 24 November, North Sea production will peak in 2001 at just above 7 million barrels per day (mbd) to decline to some three mbd in 2010.  He was questioning whether we were facing a “cliff” in the North Sea, with a quite rapid decline.  Just under 20,000 million million oil barrels equivalents (mmboe) of oil and gas have altogether been produced in the Norwegian sector and 28,000 mmboe in the British sector. Some 21,000 mmboe of reserves are under production in the Norwegian sector whereas just over 10,000 mmboe are under production in the British sector. Only some 2,000 mmboe are under development in each sector. Reserves yet to be found contain mostly gas (altogether 22,000 mmboe in the Norwegian sector of which some 8,000 mmboe are oil, some 16,000 mmboe in the British sector of which some 7,000 mmboe are oil).  However, Julian Kennedy stressed the need to be sceptical to forecasts, as production forecasts tended to be pessimistic and there were always reserve creeps, new discoveries and other new developments.

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US Energy Administration long term energy forecast

Long-term U.S. economic growth is expected to average 3.0 percent per year through 2020, increasing projected U.S. energy demand from 96 quadrillion Btu in 1999 to 127 quadrillion Btu in 2020, according to the Energy Information Administration (EIA), which this week released the reference case forecasts of its "Annual Energy Outlook 2001" ("AEO2001"). World oil prices, which increased in both 1999 and 2000, are projected to begin falling in 2001. The projected world oil price in 2020 is $22.41 per barrel (1999 dollars), similar to last year's projection.

Growth in energy demand is expected to lead to rising carbon dioxide emissions from energy combustion.  US CO2 emissions are projected to reach 1,809 million metric tons carbon equivalent in 2010 and 2,041 million metric tons in 2020, 34 percent and 51 percent respectively higher than the level of 1,349 million metric tons carbon equivalent in 1990.

Coal remains the primary fuel for electricity generation, although its share is projected to decline from 51 to 44 percent by 2020. Total natural gas demand is projected to increase by 62 percent between 1999 and 2020, from 21.4 to 34.7 trillion cubic feet. Net petroleum imports are projected to increase, providing 64 percent of U.S. demand in 2020, up from 51 percent in 1999. Growth in petroleum demand is led by transportation, where efficiency improvements are more than offset by growing travel demand. Projected production is higher in the earlier years of the forecast when projected prices are higher, contributing to lower production later. The only energy that is forecast to decline is nuclear.

US oil production declining, product output at record level, stocks down

US Crude oil inventories fell close to 5 mil bbls during October, to less than 282 mil bbls. Distillate inventories, which often decline several million barrels during October as refineries concentrate on maintenance and turnarounds, declined by only about 1 million barrels this October to 15 mil bbls, the lowest for October since 1996. Both crude oil and product imports rose in October. Crude imports, up for the third month in a row, were 4.3 percent higher than the level a year ago, while product imports jumped over 16 percent. While the largest increase among the major products was for residual fuel oil, imports of distillate fuel oil and kerosine jet fuel were also strong. Additional crude oil supplies came from the federal government's Strategic Petroleum Reserve, from which withdrawals amounted to about 5.6 million barrels during the month. A double-digit decline in Alaskan production, combined with a modest decline for the lower 48 states, led to a drop in overall domestic crude oil output of close to 3 percent. This was the largest year-to-year decline in U.S. oil production in nearly a year.

Click here for an overview of US crude oil and oil products imports.

“All time high” market - index

The average WS rate index for the selected tanker trades on the Baltic WS rates spreadsheet, found under, has never been so high as it is now.

Click here to view Freight Rates/Values on the INTERTANKO tanker market pages.

94 VLCCs fixed to 2002 and later, 114 oil/state owned, 232 in the spot market

Johan G. Olsen has now issued their VLCC list containing 527 ships, including 87 for delivery 2001-2003. Of the 87 newbuildings, 20 are for oil companies and another 14 are fixed for 2002 and beyond.  The largest VLCC owners are:

  1. Mitsui OSK, 34 VLCCs, of which only one ship unfixed, plus 1 on order (unfixed)
  2. Frontline, 26 VLCC, of which 3 on TC and 3 on BB, plus 4 on order (unfixed)
  3. World Wide, 26 VLCCs, of which 2 on TC, plus 4 on order (unfixed)
  4. NYK, 26 VLCCs, totally 4 in voyage market, plus 5 on order
  5. VELA, 21 VLCCs, plus 4 on order
  6. Bergesen dy, 18 VLCCs, of which 8 on TC, 5 on order (unfixed)
  7. AP Møller, 16 VLCCs, of which 2 on TC and 2 on BB
  8. Tanker Pacific, 12 VLCCs, of which 2 on TC and 2 on BB
  9. OSG, 9 VLCCs,  of which 3 on TC, 2 on order (unfixed)
  10. NITC 8 VLCCs,  10 on order

E-commerce needs to find a faster and better system than the current ones

E-commerce needs to find a faster and better system than the current ones, says one tanker operator who has been very active in this debate. He says that tanker chartering  based on Worldscale is very simple, quick and easy to follow. For this reason WWW needs to find a faster and better system than the way owners and charterers work today. That will not be easy.  He thinks that e-commerce may have a strong impact on tanker chartering in 2-3 years.

We encourage more replies to our questionnaire which can be found in our Weekly NEWS No. 46