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Friday, September 21, 2018

MARKET INFORMATION

World Oil Transit Chokepoints - Energy Information Administration (EIA)

A large part of the world's oil flows through narrow straits, canals and pipelines. By far the most important oil transit chokepoint is the 2-mile wide Strait of Hormuz connecting the (http://www.eia.doe.gov/emeu/cabs/pgulf.html) Persian Gulf with the Gulf of Oman and the Arabian Sea. The estimated oil flow through this strait in 2000 was 15.5 mbd or 21% of world's oil consumption. Today the main part of this oil goes eastward to India, S Korea, China, Thailand, the Philippines and Japan.

This oil will therefore also pass through another transit chokepoint, the Strait of Malacca, connecting the Indian Ocean with the <http://www.eia.doe.gov/emeu/cabs/schina.html> South China Sea and the Pacific Ocean. The oil flow in 1999 was estimated to be 10.3 mbd. The Strait of Malacca is the shortest sea route between three of the world's most populous countries. The narrowest point of this shipping lane is the 1.5 miles wide Singapore Strait. The greatest hazards of this strait are regarded to be navigational, in addition to piracy. More than 50,000 vessels per year transit the Strait of Malacca according to Dept. of Geography, National University of Singapore (1994). 30% of these, 150 ships a day, are estimated to be tankers.

Some of the Persian Gulf oil also passes through Bab el-Mandab located by Djibouti/Eritrea/ (http://www.eia.doe.gov/emeu/cabs/yemen.html) Yemen and connecting the Red Sea with the Gulf of Aden and the Arabian Sea. The oil flow in 2000 was estimated to be some 3.2 mbd. The Bab el-Mandab could be bypassed for northbound oil traffic by utilizing the East-West oil pipeline, which traverses (http://www.eia.doe.gov/emeu/cabs/saudi.html) Saudi Arabia and has a capacity of about 4.8 mbd. However, southbound oil traffic would still be blocked. In addition, closure of the Bab el-Mandab would effectively block non-oil shipping from using the (http://www.eia.doe.gov/cabs/#SUEZ) Suez Canal, except for limited trade within the Red Sea region.

Oil passing through Bab el-Mandab will to a great extent be transported to Ain Sukhna to be sent through the 2.2 mbd Sumed Pipeline. Some of the oil will also be partly discharged in Ain Suhkna and the partly loaded VLCC will pass through the Suez Canal. The Suez Canal Authority reported that 82 VLCCs passed through the Canal northbound Jan-Sep 2001 compared to 91 in the whole of 2000. Altogether in 2000 1,170 tanker transits were recorded laden northbound through the Suez Canal. The projection for this year is 1,235 northbound laden tanker transits. The biggest increase is for the 50-100,000 dwt tankers increasing from 77 in 1999, to 136 in 2000. The projection for 2001 based on 9 months is 209 transits. To view the development see:

Web link: http://www.intertanko.com/pubupload/Suez%20Canal%20Transits.XLS

The Bosphorus is another strait of increasing importance. This 17-mile long half a mile wide waterway divides Asia from Europe and connects the Black Sea with the Mediterranean Sea oil flows. The 2000 estimated oil flow through this strait was 1.6 mbd. Destination of oil exports: Western and Southern (http://www.eia.doe.gov/emeu/cabs/euro.html) Europe; Main Concerns: Bosphorus is one of the world's busiest straits with some 50,000 vessels annually (the same as the Strait of Malacca), including 5,500 oil tankers. Increasing exports from the (http://www.eia.doe.gov/emeu/cabs/caspian.html) Caspian Sea region will mean increasing tanker traffic through this strait. In July 2000, the International Energy Agency estimated that exports through the Black Sea could reach 2.3 mbd, but that the Turkish Straits could handle only a maximum of 1.8 mbd .

Non-OPEC oil increase more than demand in 2002 - EIA

Non-OPEC oil production is expected to increase by about 1.1 mbd in 2002, greater than the EIA's projected growth in demand of 0.8 mbd. Russian oil production is projected to grow by 0.3 mbd, compared to 0.5 mbd growth in 2001. Other large production increases are expected to result from new developments in Angola and Canada. As a result, the call on OPEC oil is expected to decline.

The outlook assumes that global jet fuel demand will decline by 10 percent during fourth quarter 2001. Following the initial stages of the terrorist crisis, commercial jet fuel use is projected to recover somewhat, with global jet fuel demand down by roughly 5 percent in 2002.

US oil demand is projected to be 0.3 mbd less than that projected by EIA last month. Still demand is projected to increase and demand 3Q02 is projected to be 20.158 mbd, 0.437 above 3Q01. However, demand in 2Q02 is projected to decline by 0.03 mbd to 19.691 mbd.

Web link: http://www.eia.doe.gov/steo/

2001 South Korean oil demand at 1999 level - International Energy Agency

According to the October IEA Oil Market Report, South Korean oil demand is estimated to be 2.09 mbd for 2001, only slightly down on the 2.13 mbd level of 2000. IEA project 2002 oil demand to be 2.07 mbd. In essence oil demand has remained flat since 1999. The highest level of oil demand was recorded in 1997 at 2.29 mbd.

U.S. crude oil proved reserves increased

Last year U.S. crude oil proven reserves increased by about 1%. Crude oil reserves additions replaced 115% of oil production. The majority of crude oil proven reserves additions came from the deepwater Gulf of Mexico Federal Offshore frontier area. Discoveries of crude oil in 2000 also came mainly from this Federal Offshore frontier area and the Alaskan North Slope, which both provided very high discoveries per exploratory well. Proven reserves are the estimated quantities which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.

US Crude oil stocks up

US crude oil stocks rose 3.6 million barrels (MMB) to end week 44 at 311.9 MMB. As of 2 November, crude oil stocks were 12.1% higher than last year, and 1.5% higher than the five-year average.

Distillate inventories rose 0.3 (MMB) to 128.2 MMB by 2 November 2001 and remained within their normal seasonal range. Diesel fuel inventories fell 1.3 MMB to 69.4 MMB while heating oil inventories increased 1.5 MMB to 58.8 MMB. Total inventories ended the week 11.0 MMB higher than last year's unusually low level.

Motor gasoline stocks decreased week 44 despite higher production levels. Total motor gasoline stocks were down 1.4 MMB to end the week at 206.9 million barrels. Stocks of reformulated gasoline rose 2.8 MMB to a total of 44.2 MMB while stocks of conventional gasoline fell 1.9 MMB to a total of 117.0 MMB. Stocks of motor gasoline blending components ended the week at 45.2 MMB, 2.0 million barrels below the level at the end of the prior week. Total motor gasoline stocks at the primary storage level were 18.6 MMB above the level for the same week last year.

Old oil pipeline Iraq Syria re-activated- - Lloyd's List

Charles Moore, head of an international force that patrols Gulf waters, said that while smuggling by sea had reduced by approximately one half, the overall smuggling of oil by Iraq had increased over the past year because of flows through a pipeline to Syria and trucks travelling by road to Turkey and Jordan. The pipeline resumed carrying crude from Iraq to Syria last November, after remaining idle for 19 years, and pumps as much as 200,000 barrels per day, Admiral Moore said.