Oil Price Recovery News

Expectations are high that exhaust gas scrubber technology demand will soon be resurge. But what lessons have been learned from installations and which type will dominate?Installing scrubber systems on ships that were never envisaged to have them on board has brought well documented challenges for older tonnage, with accurate drawings and documents sometimes hard to source. Where class documentation is concerned, meanwhile, different societies can have subtly different requirements…

Russia's top shipping company Sovcomflot plans to sell a 15.5%-17% stake in new shares and raise around 42.25 billion roubles ($534 million) in an initial public offering (IPO) on the Moscow Exchange, the company and analysts said on Monday.Sovcomflot's IPO comes at a difficult time for the Russian currency as rising coronavirus cases worldwide threaten an oil price recovery and reduce risk appetite among investors.The rouble was trading close to a 6-month low against the U.S.

Malayasia-based MISC Berhad  has secured a long-term charter contract from Hess Exploration and Production Malaysia  for the lease of a floating, storage and offloading facility (FSO) known as FSO Mekar Bergading on a bareboat basis. The long-term charter contract is pursuant to a sale and charter agreement between MISC and HESS in respect of the FSO, which also resulted in MISC acquiring ownership of the FSO. The investment is consistent with the MISC2020 strategy of which one of the target is to achieve a sustainable level of secured profit by year 2020 and MISC has been exploring opportunities to diversify the profit stream contribution across all business segments, including acquisition of assets that are able to give the Company secure and sustainable income.

OPEC said on Monday the world oil market would return to balance only towards the end of 2018 as extra barrels from the United States and other non-member producers offset an OPEC-led deal intended to clear a supply glut. In a monthly report, the Organization of the Petroleum Exporting Countries said outside producers would boost supply by 1.4 million barrels per day (bpd) this year. That was the third consecutive rise from 870,000 bpd forecast in November. "The steady oil price…

Gulf of Mexico vessel operators want to see sustained, higher oil prices. After a rough two years, supply boat owners and operators in the Gulf of Mexico hope crude oil prices will improve in 2017. That would encourage activity among the offshore drillers that they service and would put unemployed boats back in the water. Vessel owners aren’t necessarily banking on a good year ahead, however. “Utilization of OSVs and PSVs in the Gulf is below 50 percent now, down from about 70 percent a year ago and 90 percent two years ago…

Petroleum Geo-Services ASA reported revenue fall in their recently released Second Quarter and First Half 2016 Results. It logged a healthy MultiClient Sales and continues to undertake cost reductions. "With the gradual recovery of the oil price from its lows in early Q1, we are starting to see early signs of a stabilizing market and improving sentiment," observed Jon Erik Reinhardsen, President and Chief Executive Officer. "We believe that this has started to impact our MultiClient performance positively. The marine contract market is still characterized by very low pricing, but here too we see indications of more predictable patterns in customer survey planning and contracting processes.

Glencore books the STI Grace tanker to store fuel at sea-traders. This has not been the summer many oil traders had expected after last year's bumper profits. Banking on more of the same, the world's refineries have churned out more diesel, gasoline and jet fuel than eager drivers and holiday makers have been able to consume even over the summer travel season. Fuel inventories in the United States, Europe and Asia are brimming despite the height of peak summer driving. European traders are now moving to store diesel on tankers at sea as on shore storage tests its limits yet again. At least one vessel, the 90,000 tonne STI Grace has dropped anchor off the chic holiday town of Southwold on England's east coast in what traders said was floating storage. The vessel was chartered by Glencore.

Less domestic petrochemical consumption of LPG would be positive for VLGC shipping as it would result in a greater surplus of LPG available for export. However, it is still unclear whether this dedicated-feedstock ethylene (five new ethylene plants, two expansions) and propylene production capacity expansion will displace a portion of the olefin production currently coming from flexible-feedstock ethylene crackers (positive for VLGC freight), or whether it will supplement it and the excess olefin production will then be exported (negative for VLGC freight). This development, along with energy prices, will be the key driver of LPG balances in the US going forward. The VLGC fleet grew by 10% in the first quarter of 2016 as 19 vessels were delivered in the quarter.

Traders shut short positions ahead of Brent expiry. Crude oil prices reversed early losses on Friday, with Brent on track for its first weekly gain in a month, as strong U.S. gasoline demand and hopes of OPEC action outweighed concerns over fundamental oversupply. Brent crude futures were trading at $36.09 a barrel at 1100 GMT, up 80 cents from their last close and an intra-day low of $34.73. U.S. West Texas Intermediate (WTI) crude futures were up 75 cents at $33.82. The gains, if they hold, would mark the third consecutive daily increase for Brent and the fifth for U.S. benchmark WTI. Traders said that the rises were driven by short positions closed ahead of Brent's expiry next week and by strong demand for gasoline in the United States.

A sustained supply glut has maintained Brent oil prices through the first five months of 2015 at some 47 percent lower than the same period in 2014. Industry observers expect low oil prices to eventually take supply out of the market and drive a price correction, noted Douglas-Westwood. So, when will this happen? To-date, supply appears unaffected - latest figures from the EIA indicate that US production has risen almost 13 percent in the last 12 months. Saudi Arabia is much the same, production has hit a record rate of 10.3 mb/d.

Our Offshore Annual edition of MarineNews headlines Jane Bugler, the Technical Director of the International Marine contractors Association (IMCA). Jane is a chartered chemical engineer who worked in the chemical industry for several years before joining the UK Health & Safety Executive (HSE), where she worked in a variety of roles (including work regarding pipeline regulation) before joining IMCA in 1997, when she became Technical Director. Today, Jane has overall responsibility for the extensive and varied technical program of IMCA and for liaison between IMCA and external organizations…

IMA has just completed a detailed assessment of the floating production sector. The study examines the impact of the global economic downturn, assesses the underlying long term market drivers and forecasts production floater orders over the next five years. The market for new floating production systems has frozen as a result of the abrupt downturn in the global economy. Over the past quarter no orders have been placed for production floaters. This is the first time since 1996, when IMA began tracking the floating production sector, where no orders have been placed during a reporting quarter. As a result, order backlog for production floaters has dropped 30 percent from the same time last year. Several orders for production floaters have been delayed, including three FPSOs and a MinDoc.

While it may be impossible to predict when offshore rig utilization will begin a meaningful recovery, Duff & Phelps Credit Rating Co. (DCR) has noticed certain industry developments that suggest improved conditions. Operating rates for drilling rigs have increased steadily over the past 12 months as drilling day rates for a shallow water jackup rig have risen from a low of $22,000 to current levels of approximately $50,000, the DCR report explains. Offshore drilling rig utilization has also steadily increased from a low of 72 percent during the summer of 1999, to 81 percent in February 2000. Yet, the report continues, utilization of the worldwide mobile offshore drilling fleet is only about 81 percent…

The absence of quality new merger opportunities will force oil companies to keep spending tight even though this year's oil price recovery has given them far more cash to work with, analysts said. Oil companies are now locked into the regime of tighter financial discipline they promised share investors during last year's crash, and will be unable to embark on the usual rush for production growth as the market recovers, they added. "The pendulum cannot swing quickly back and capital spending is not going to rebound," Fergus Macleod of Deutsche Bank said. "Oil companies have got to deliver on the agenda they set themselves. Fears of losing equity confidence mean oil companies will take around two years to raise spending in pursuit of market share left open by OPEC producers' supply cuts…