Economy, Demand Data Drives Oil Down
World oil prices resumed a months-long rout on Tuesday to close at their lowest in more than two years, pressured by reduced economic and demand growth forecasts. U.S. crude oil prices fell faster than European Brent, reversing a weeks-long compression in the Brent/WTI spread amid signs that U.S. refiners are starting to buy cut-priced West African or Mediterranean crudes, re-opening a once common arbitrage. The International Monetary Fund cut its global economic growth forecasts for the third time this year, warning of weaker growth in core euro zone countries, Japan and Brazil. And German industrial output fell in August at its steepest rate since January 2009. "The IMF forecast is weighing on (demand) sentiment," said Phil Flynn, an analyst for the Price Futures Group in Chicago.
Tanker Carrying Kurdish Crude Changes Course toward Cyprus
A tanker carrying 300,000 barrels of Kurdish crude oil has changed its destination to Limassol, Cyprus, as it returned from the United States without delivering its disputed cargo to a New Jersey refiner. The Minerva Joy tanker had previously listed its destination as "Gibraltar orders," which usually implies a destination in the Eastern Mediterranean or further east. It changed its destination to "Limassol orders" at around 1600 GMT on Saturday, according to Reuters AIS Live shiptracking. On Aug. 13, the Minerva Joy began sailing eastwards from off the coast of Paulsboro, New Jersey, after refiner Axeon Specialty Products said it would not buy or accept delivery of any cargoes of disputed Kurdish crude oil for its Paulsboro refinery.
Refiners Seek Jones Act Workarounds as Crude Export Debate Heats Up
As the first U.S. oil condensate exports head to Asia from the Gulf Coast, crude producers and refiners are exploring ways to get around a century-old law that makes it three times more expensive to ship by water between U.S. ports than to sail to a foreign port. The Jones Act, originally passed to protect the U.S. maritime industry, restricts passage between U.S. ports to ships that are U.S.-built, U.S.-flagged and U.S.-crewed. If oil exports pick up pace while the Jones Act is left in place, U.S.
Lukoil Shipped Canadian Crude from Houston
Russian oil major Lukoil has emerged as one of the first companies to buy Canadian crude re-exported from a U.S. port, shipping one cargo last month to its refinery in Augusta, Italy, data showed on Tuesday. A 445,000-barrel cargo of Canadian Sour grade loaded on the Sifnos, a Suezmax crude tanker, in Houston and departed on July 6, according to PIERS oil export trade flows data available via Thomson Reuters' Eikon. It discharged at the 320,000 barrel-per-day (bpd) ISAB refinery in Augusta, Italy, on the island of Sicily, on Aug. Lukoil, the second-biggest oil producer in Russia, took a stake in the Sicilian refinery in 2008 and gradually increased its stake to full ownership in December 2013. The U.S.
NGL Energy, TransMontaigne End Talks on Acquisition Proposal
NGL Energy Partners LP and TransMontaigne Partners LP said on Friday they have terminated discussions on NGL's non-binding proposal to acquire the outstanding common units of TLP, according to a press release. The discussions were terminated after the Conflicts Committee of TransMontaigne GP LLC's Board of Directors reviewed the terms of NGL's non-binding proposal and determined the two parties would not be able to agree on the price to be offered to unitholders of TLP. The board's independent advisors held several discussions with NGL's representatives in the last month, the release stated. TransMontaigne GP LLC is the general partner of TLP. TransMontaigne Partners LP provides transport and storage of petroleum and refined products.
Jones Act Tanker Chartered for Airline Refinery
Delta Air Lines Inc's refining unit has chartered a U.S.-flagged oil tanker for the first time, allowing it to tap directly into cheap Texas shale oil as the company overhauls its supply strategy. Monroe Energy LLC, the Delta subsidiary that runs the airline's 165,000 barrel per day (bpd) Trainer refinery, has time-chartered the 330,000-barrel MR Seabulk Arctic, a Jones Act vessel built in 1998, for two years beginning in August, according to sources familiar with the deal. A Delta spokesman confirmed the charter but provided no further details. It has an option to switch to a newly build ship in 2016 for an additional three years. Seabulk Tankers Inc…
Ship Reportedly Booked for First US Condensate Export
The first condensate cargo for export is due to load in Texas at the end of this week, headed via the Panama Canal to Asia, shipping sources said. Westport Petroleum Inc., the Franklin, Tennessee-based shipping arm of Japanese trader Mitsui & Co., chartered the BW Zambesi, an LR1 tanker, also known as a Panamax class vessel. Reuters previously reported that Mitsui had bought a 400,000-barrel cargo, and is said to be being marketed to refiners in Asia. According to a Reuters shipping database, the BW Zambesi has capacity of more than 76,000 deadweight tons (DWT). Shipping sources said the BW Zambesi will likely carry less than its maximum capacity, due to draft restrictions in the Panama Canal. The $1.8 million one-way trans-Pacific trip is expected to take a month or more, sources said.
US Tankers Built on Spec Face Choppy Waters
U.S. shipbuilders are making a $500 million bet on robust domestic demand for crude oil from newly-tapped shale fields by building new tankers without having lined up customers to lease them. Philly Tankers AS, majority-owned by Aker Philadelphia Shipyard is building four ships on spec, and Seabulk Tankers Inc, an indirect wholly-owned subsidiary of SEACOR Holdings Inc, is building another two. The 330,000-barrel ships, which cost about $125 million each, conform to the 1920 Jones Act, which requires ships moving between U.S.
Commodity Giant Steps out of the Shadows
A detailed new case study scrutinizing the risk-management Swiss-based Trafigura is the latest effort to "demystify" the once-secretive commodity trading industry, just big merchants seek to fill a void being left by Wall Street banks. The study, "The Economics of Commodity Trading Firms," comes as U.S. regulators mull new restrictions on banks' physical commodity trading, a crackdown some large energy companies say would rob them of credit-worthy, transparent counterparties and leave them at the mercy of shadowy and risky firms.
Crashes in Crucial US Crude Waterway Hit 10-year Low
Serious crashes in the bustling Bay of Galveston have fallen to the lowest level in a decade even as more oil moves on U.S. waterways, official data show, suggesting that better training and equipment are helping avert spills like one in March. The number of crashes in the Texas bay, home to the Houston Ship Channel and the country's heaviest crude, fuel and chemical ship traffic, fell 68 percent to eight in 2013 from 25 in 2011, according to U.S. Coast Guard data obtained by Reuters through the Freedom of Information Act. But the March 22 crash of a Kirby Corp.
U.S. Crude Jumps $1 on Jobs Data, Libya Doubt
Crude oil prices on both sides of the Atlantic rose on Friday as data showed strong jobs growth in the United States and investors cast doubt on reports Libya's oil ports were about to reopen. The March U.S. non-farm payrolls report showed 192,000 jobs were added in March in major test of the argument that the economic weakness of January and February was due to bad weather. Expectations had been building that an eight-month blockage of Libya's oil export ports would end after rebels and the government said they were close to an agreement. The Libyan government said it had seen evidence of "good intentions" at indirect talks with eastern rebels that could lead to renewed exports.