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David Sheppard News

30 Mar 2015

Amid Yemen Chaos, China Lifts More Oil

China has managed to export a large shipment of crude oil from Yemen over the weekend, ship-tracking data showed on Monday, despite mounting chaos in the country after the launch of Saudi-led air strikes last week. The 2 million barrel Very Large Crude Carrier (VLCC), Tai Hung San, left the Yemeni port of Ash Shihr on Sunday, and has been chartered by PetroChina's shipping-arm Glasford, the data showed. The supertanker was sailing towards the Chinese port of Qingdao on Monday after exiting the Gulf of Aden. The shipment shows that some oil is still being exported from the country, which has become a growing supplier to China despite years of falling output and political instability.

16 Mar 2015

N. Sea Forties Echo Platform Shut after Collision

The Forties Echo platform in the North Sea has been shut after being hit by a supply vessel, a spokesman for operator Apache North Sea said on Monday. Fifteen workers were taken off the platform and transferred to the nearby Forties Bravo platform following the collision, which happened at about 0840 GMT on Monday morning, the spokesman said. Another 15 remain on the platform. The spokesman also confirmed there had been no leak of hydrocarbons, but was unable to give a restart date for production. Apache North Sea, part of Apache Corp, is investigating the extent of any damage but there was no structural risk to the rig, he added. "An…

11 Mar 2015

Libya Exports Three Oil Tankers from Western Mellitah Port

Oil and condensate has been exported at least three times from the Libyan port of Mellitah since the start of this month, according to industry sources and ship-tracking data, a surprise move with other terminals in the west of the country largely shut. The North African OPEC member is split between two rival governments each allied to heavily armed groups that have been fighting for control of the oil-producing nation since the fall of Muammar Gaddafi in 2011. The Mellitah port, not far from Libya's western border with Tunisia, is jointly-operated by Italian energy major ENI and the Libyan National Oil Corporation (NOC), and lies in territory largely controlled by a rival government that seized the capital Tripoli last summer.

03 Mar 2015

Oil Storage at Sea Stalls as Profit Play Fades

Traders are cutting plans to use tankers to store oil at sea as the price incentive recedes, the global head of oil at mining and commodities group Glencore's said on Tuesday. In January, the price of spot oil was around 50 percent lower than a peak hit in June, enabling traders to potentially make money by storing crude for delivery months down the line, when prices were expected to recover. Tanker industry sources estimated in late January that the volume of oil booked for floating storage had reached up to 50 million barrels. The economics of storage can only work if oil prices for delivery in the future are at a large enough premium to those in the spot market - a market structure known in the industry as contango. A backwardation is when the opposite occurs.

20 Feb 2015

Cold Snap has European Traders Eyeing Diesel Exports to US

Diesel and heating oil exports will increase to the United States from Europe, traders said, reversing the usual flow, as refineries on the U.S. East Coast struggle against extreme cold that has partly frozen the Delaware River. On Friday New York heating oil's premium to European gasoil spiked to its highest level since the January 2014 'polar vortex', as temperatures dropped as low as -18 degrees centigrade (-0.4 Fahrenheit), knocking a number of key refineries offline. Traditionally the United States has sent diesel to Europe, where the fuel is much more commonly used in cars, while European refiners have sent excess gasoline cargoes across the Atlantic. A so-called 'reverse-arbitrage' trade has been underway since the start of February as a cold snap on the U.S.

05 Feb 2015

Oil Tankers Run Gauntlet in Nigeria's 'Pirate Alley'

Photo: Edward Stegle

A pirate attack that killed a supertanker crewman off the coast of Nigeria this week has highlighted a growing threat off oil-rich West Africa, as vessels carrying millions of barrels of crude traverse a region that has become known as "pirate alley". The 2 million barrel Kalamos Very Large Crude Carrier (VLCC) was heading to Nigeria's main oil terminal when it was attacked late on Monday, leaving the ship's Greek deputy captain dead and three crew members taken hostage. Security experts say the waters off Nigeria are now the deadliest on earth…

21 Jan 2015

Tankers Booked to Store Oil at Sea

Oil traders have booked up to 20 tankers to store an estimated 40 million barrels of crude at sea, rising from 25 million barrels last week, as they soak up a stocks glut in anticipation of future profits, shipping and oil market sources said. The more than 50 percent fall in spot prices since June enables traders to make money by storing the crude for delivery months down the line, when prices are expected to recover. The sources said the volume of oil earmarked for floating storage had risen in recent days. Some of the tankers could nonetheless still be used for conventional oil transportation. "Floating storage remains a major focus in the tanker market as charterers have been fairly active in securing VLCCs (very large crude carriers) on time charters…

16 Jan 2015

U.S. Oil Traders Storing W.African Crude

Glencore, Suncor, ENI, Vitol all booking tankers; U.S. crude oil stocks at highest ever level for time of year. Traders are shipping West African crude to the United States to store the oil until prices recover, as the global glut forces them to source any tanks available and as seaborne cargoes are able to compete better on price with U.S. crude. Oil firms including Swiss-based Glencore, Italian energy major ENI and Canada's biggest oil company Suncor have lined up ships to take at least 10 million barrels of West African crude to North America, ship brokers say, with freight bookings and tanker tracking also showing the moves. The move reinvigorates a trade that had been largely shut off by the U.S.

15 Jan 2015

Traders to Store W.African Crude in US Until Prices Recover

Traders are shipping West African crude to the United States to store the oil until prices recover, as the global glut forces them to source any tanks available and as seaborne cargoes are able to compete better on price with U.S. crude. Oil firms including Swiss-based Glencore, Italian energy major ENI and Canadian's biggest oil company Suncor have all lined up ships to take at least 10 million barrels of West African crude to North America, ship brokers say, with freight bookings and tanker tracking also showing the moves. The move reinvigorates a trade that had been largely shut off by the U.S. shale boom, as West African barrels that used to be imported to the United States were some of the first to be pushed out by soaring output in Texas and North Dakota. While U.S.

13 Jan 2015

Traders Book Oil Tankers to Store 25m Barrels at Sea

Some of the world's biggest oil traders have booked supertankers to store at least 25 million barrels at sea in recent days, seeking to take advantage of the crash in crude prices and make a profit down the line. Floating storage levels are expected to increase further in coming weeks as trading companies adopt a strategy that was last used in 2009 when prices slumped and led to over 100 million barrels of oil being parked on tankers at sea before stocks were sold off. The play is also driving up tanker hire rates, and shipping firms have seen their share prices surge in recent days. In the past week, trading firms including Trafigura…

03 Jan 2015

Oil Declines in Thin, Volatile Trading

Global benchmark Brent crude oil closed down nearly a dollar a barrel Friday after a day of choppy trading despite expectations of new investments in the new year, as strong mid-day rallies in crude fizzled. Brent was down 91 cents at $56.42 a barrel. Earlier, it touched a post-2009 low of $55.48, having averaged around $110 a barrel between 2011 and 2013. Front-month U.S. crude for February delivery settled down 58 cents a barrel at $52.69, before a steep 50-cent drop post-settlement. The U.S. dollar index was 0.9 percent stronger on Friday. The combination of the supply glut and the strong dollar has been a "double whammy" for crude oil prices, said Walter Zimmerman, chief technical analyst at United-ICAP. "This is a long-term cyclical downtrend," Zimmerman said.

06 Nov 2014

Shippers, Traders Scramble After OW Bunker Says Near Bankruptcy

Shipping companies and bunker oil traders scrambled to source fuel and take over supply contracts on Thursday after OW Bunker, one of the world's biggest shipping fuel firms, said it faces possible bankruptcy after uncovering internal fraud. Traders said refineries and other shipping fuel suppliers were cutting deliveries and were likely to cancel long-term contracts with the Danish company, which handles around 7 percent of all global bunker fuel supplies. An OW Bunker spokesman, asked whether the firm had put its activities on hold, said he could not comment further while the in-court restructuring process was ongoing. But a source familiar with the matter said OW Bunker was halting the majority of its operations. "Most activities are put on hold," the source said.

31 Oct 2014

Total CEO: EU Must Fight US Crude Export Law

First major public appearance of new Total head; he challenges European politicians to fight US ban. The new head of French energy major Total challenged Europe to fight Washington over the U.S. oil export ban, in his first public appearance since his predecessor Christophe de Margerie was killed in a Moscow plane crash last week. Patrick Pouyanne said on Thursday the export ban flouts free-trade agreements and puts European and Asian refiners at a disadvantage, making a bold appeal to European politicians. "We need to fight and put this topic on the table," Pouyanne said during a sometimes emotional appearance at London's annual Oil & Money conference, where de Margerie had been a popular speaker over the years. "I hope the European Commission raises this issue ...

02 Oct 2014

Oil Traders Say OPEC May Be Heading for Price War

Saudi Arabia's decision to slash the official selling price for its oil has sparked trader talk of an emerging OPEC price cutting war, as members of the producer group could compete to defend their market share amid ample supplies and tepid demand. Industry and trading sources in the Middle East say there was now a risk of a race to the bottom, at a time when many were calling for unity from members of the Organization of the Petroleum Exporting Countries (OPEC) as it faces one of the steepest price slides since the financial crisis. The group's next meeting in November will be closely-watched to see whether it cuts supply. Benchmark Brent crude prices continued to slide towards $90 a barrel on Thursday…

08 Sep 2014

China's Unipec Books Megatanker to Store Crude

Chinese oil trader Unipec has booked one of the world's largest ships to store crude off Singapore, trade sources said on Monday, hiring a 3.2 million barrel capacity supertanker to hold the oil at sea until prices recover. The TI Europe is one of just a handful of Ultra Large Crude Carries (ULCC), a category of vessel that is capable of carrying more than 3 percent of daily global world oil demand. International benchmark Brent crude prices fell below $100 a barrel on Monday for the first time in more than a year, with prices tumbling by more than 15 percent since June due to weak demand and ample supply. (Reporting by David Sheppard and Ron Bousso in London; editing by David Clarke)

04 Sep 2014

Accident Claims One in BP North Sea Incident

A man has died after an incident on a North Sea oil platform owned by BP Plc, the company said on Thursday. "BP is deeply saddened to confirm that an offshore worker has died following an incident on the Unity platform," BP said in a statement. It did not name the man but said the man's immediate family had been informed. The Edinburgh-based Scotsman newspaper website said it was understood the death had resulted from a fall. BP's safety record on its oil rigs has been under heightened scrutiny since the 2010 Gulf of Mexico oil spill. The offshore worker was an employee of British energy services firm Cape Plc. The Unity platform does not produce any oil but is part of the BP-operated Forties Pipeline System (FPS), which brings oil to shore in Scotland.

03 Sep 2014

Buckeye Buys Trafigura's Texas Assets

Oil logistics specialist Buckeye Partners LP will pay $860 million for control of Trafigura's prized oil facilities in the Texas shale hub amid expectations Washington will relax its crude oil export ban. U.S. firm Buckeye will buy 80 percent of the global commodities trader's South Stream assets which include a deep-water tanker loading terminal in Corpus Christi, liquefied petroleum gas (LPG) storage and a small refining unit known as a condensate splitter. Trafigura will hold on to the remaining 20 percent in the Corpus Christi facility, described in Trafigura's 2013 annual report as "one of the company's most important strategic assets ... at the center of the action in the world's largest, most dynamic, energy market". The deal comes at a time of increased pressure on the U.S.

28 Aug 2014

UK's Hound Point VLCC Jetty Down Until Sept. 15

The supertanker jetty at the North Sea's Hound Point crude oil terminal is shut for maintenance and will not reopen until Sept. 15, operator BP Plc said on Thursday, making sending excess cargoes to Asia more difficult for traders. The Hound Point jetty has two berths, but only Jetty 1 is large enough for the Very Large Crude Carriers (VLCC) that traders normally use to send cargoes to Asia. "Hound Point 1 berth will be closed to carry out maintenance. The berth won't be available for loading from 26th August 2014 until the work is complete, which we estimate as 15th Sept 2014," BP said in a statement. "Hound Point 2 berth is fully available for normal operations.

20 Aug 2014

Tanker Carrying Kurdish Oil Reappears Unladen off Israel

A tanker carrying crude oil from Iraqi Kurdistan reappeared unladen on Aug. 19 about 30 kilometres off the coast of Israel, ship tracking data on Reuters showed. This is the second time the Kamari has appeared in the area in the last two weeks carrying Kurdish oil. The tanker Kamari was partly laden north of Egypt's Sinai on Aug. 17, tracking showed, before it turned off its satellite transponder until early on Aug. 19. It was not possible to determine where the oil had been delivered to or who the buyer was. A spokesman for the Kurdistan Regional Government (KRG) Ministry of Natural Resources did not immediately respond to phone calls and emails seeking comment on Wednesday. The KRG has previously denied selling oil to Israel "directly or indirectly".

09 Aug 2014

Oil Production gets Disrupted in Iraqi Kurdistan

Oil companies in Iraqi Kurdistan began withdrawing more staff on Friday in the siege of militants from the Islamic State to the capital of the region, with Afren became the first to announce that he was reducing their production. Shares in London-listed oil and operating in northern Iraq fell for a second day because the closure and evacuation of personnel at other sites became more likely in a region hitherto considered relatively safe compared to rest of the country. The United Islamic group considered non-Muslims and adherents of Shia Islam as apostates and in many cities that has taken control made a tough proposition: become, escape or die.

30 Jul 2014

Iraqi Kurdish Pipeline Stopped; Tanker in Limbo off Texas

Iraqi Kurdistan's attempts to export oil independently of Baghdad hit another obstacle on Wednesday, as a Turkish energy official and industry sources said the autonomous region's pipeline to the Mediterranean has been shut for the past week. The Kurdistan Regional Government (KRG) has not launched any oil tankers from the Turkish port of Ceyhan in over a month as Baghdad has moved to block the vessels from unloading at foreign ports. The latest set-back comes as Iraqi Kurdistan's increasingly bitter legal and diplomatic struggle with Baghdad over oil sales threatens to spill over into the United States. Arguing all oil sales outside its control are illegal…

28 Jul 2014

Tanker with Iraqi Kurdish Oil Anchors off Texas Port

A tanker carrying crude oil from Iraqi Kurdistan was anchored near the Port of Galveston, Texas, and must undergo a routine safety inspection by the U.S. Coast Guard on Sunday before it can unload its cargo, an official said. The Marshall Islands-flagged tanker United Kalavrvta sailed from the Turkish port of Ceyhan in June bound for the U.S. Gulf Coast despite Washington's concerns over independent oil sales from the autonomous region and threats from the Iraqi central government. Crude offloading could begin as early as Sunday, if the tanker passes the Coast Guard inspection "and there are no other issues," said Coast Guard Petty Officer Andy Kendrick. The Coast Guard was communicating with the U.S.

25 Jul 2014

Iraqi Kurdish Oil Nears US Port Despite Concern in Washington

A tanker carrying crude oil from Iraqi Kurdistan is just one day away from arriving at a U.S. port, according to ship tracking satellites, despite Washington's long-standing concern over independent oil sales from the autonomous region. The United Kalavrvta tanker, which left the Turkish port of Ceyhan in June carrying oil delivered via a new Kurdish pipeline, is due to dock in Galveston, Texas on Saturday, Reuters AIS Live ship tracking shows. A sale of Kurdish crude oil to a U.S. refinery would infuriate Baghdad, which sees such deals as smuggling, and raises questions about Washington's commitment to preventing oil sales from the autonomous region.