Wells Fargo Calls $100 Oil a 'Pipe Dream'
USD 100 per barrel oil is but a “pipe dream,” Wells Fargo said in a new investor note, reports MarketWatch. The report quoted Wells Fargo’s John LaForge saying that he’s doesn’t expect oil prices to climb anywhere near $100 a barrel over the next few years. Barrels price will bounce between $30 and $60 in the coming years, according to top bank’s diagnosis. “We continue to hear that big cutbacks are on the cusp of happening,” he said. “The evidence, however, implies otherwise. Shale production has caused American output to stand higher than it did in 2014, before the oil price crisis began.
Glencore Sees Record Oil Trading Volumes as Margins Shrink
Glencore looks set to cement its position as the world's second-largest oil trader as it tries to offset low volatility and tight margins with record volumes this year, its global head of oil, Alex Beard, told Reuters. The London-listed commodities trader and miner will shift around 6 million barrels per day (bpd) of crude and refined product this year, up 25 percent from last year. The figure represents around 6 percent of global supply and only rival Vitol trades more oil, at some 7 million bpd. Most merchants are being forced to ramp up volumes to protect profits in an environment of low volatility. "We don’t set targets in terms of volumes," Beard told the annual Reuters Global Commodities Summit.
Cautious Optimism on Multipurpose Shipping: Drewry
Recovering demand for multipurpose shipping combined with improved market conditions for competing sectors will result in rising market share for the multipurpose shipping fleet and a recovery in freight rates in 2018, according to the latest Multipurpose Shipping Market Review and Forecaster report published by global shipping consultancy Drewry. Although China’s plans to curb steel production in an attempt to clean-up the air pollution blighting its cities may well slow steel exports over the short term, the longer term outlook is still positive for the multipurpose and heavy lift sector.
Oil Rallies on Chinese Import Boost and Mideast Tensions
Oil prices firmed on Friday as bullish news from strong Chinese oil imports to turmoil in the Middle East put Brent on track for a nearly 3 percent weekly gain. The developments added to other signs that the market was finally rebalancing after years of excess, but analysts warned that the 2018 balance was still shaky. Brent was at $57.20 at 1335 GMT, up 95 cents. U.S. West Texas Intermediate (WTI) crude was at $51.44 per barrel, up 84 cents from its last settlement. The contracts were on track for weekly gains of more than 2 percent and 4 percent, respectively.
Wren Completes Isle of Man Steam Packet Company Deal
Liverpool marine fabrication firm Wren Industrial has manufactured and installed a collection of new water-tight and fire-rated doors for leading UK ferry operator Isle of Man Steam Packet Company. The welding and fabrication specialist has a long-standing relationship with the famous ferry firm, which is renowned as the oldest continuously operating passenger shipping company in the world - founded in 1830. The latest contract involved ‘through-night’ door maintenance onboard freight, passenger and vehicle ferries the Manannan and Ben-my-Chree.
Crude Oil Markets Bullish, But Not Really: Russell
Sentiment is often a somewhat flighty and nebulous concept, but it appears that crude oil markets are turning increasingly bullish about the prospect for higher prices. Certainly the mood at this week's major industry conference in Singapore was a marked change from recent years, with several upbeat presentations, panel discussions and off-the-record chats giving the view that prices were more likely to rise than fall. The most bullish commentary at the Asia Pacific Petroleum Conference (APPEC) was from trading house Trafigura…
Indonesia, CNOOC Talks End in Deadlock
Early renegotiation of gas selling price with China National Offshore Oil Company (CNOOC) has ended in deadlock as the ceiling price proposed by CNOOC was seen as too low, according to Asian Pulse. Indonesia has signed a long term contract to supply China's Fujian province with 2.6 million tons of liquefied natural gas (LNG) annually from Tangguh, Papua. Under the agreement in 1992 the LNG price was tide with crude oil price or around $2.4 per MMBTU based on a ceiling price of $25 per barrel of crude oil. The ceiling price is no longer acceptable to Indonesia with the soaring crude oil price at present. Currently the LNG price is around $8 per MMBTU based on a crude oil price of $65 per barrel.
US Shipbuilding: The Road Ahead
Matt Paxton, president of the Shipbuilder’s Council of America, shares with Maritime Reporter & Engineering News his insights on the opportunities and challenges ahead. The United States shipbuilding market is diverse and geographically widespread, tasked to build everything from the most sophisticated military warships on the planet to small ferries, and everything in between. As president of SCA since 2007, Matt Paxton has made it job one to make SCA a unifying voice for the collective industry, a champion of the industry in raising its profile and stature in political and business circles.
Asia Tankers-VLCCs Rates Ease as Tanker Jams Fade
Port congestion eases at Basra and Chinese ports; tanker demand set to expand on lower oil prices. Freight rates for very large crude carriers (VLCCs), hurt by slower-than-usual release of cargo, could slip further next week as more tonnage becomes available with the easing of recent tanker traffic jams in China, ship brokers said on Friday. Charter rates from the Middle East to Japan slipped to a six-month low on Thursday, falling by 12 Worldscale points or almost $14,000 since April 21.
Asia: LPG Shipping and LNG Pricing
While declining Asian LNG prices have reduced margins on the long-distance LNG trade, causing spot-charter rates for LNG vessels to fall, LPG shipping earnings are forecast to remain buoyant on the back of low oil prices and the absence of fuel substitution. According to LPG Forecaster, published by global shipping consultancy Drewry, low oil prices have not triggered the substitution of LPG as the fuel of industrial use, as feared by some analysts. As a result, LPG shipping demand has remained intact and low bunker prices have supported vessel earnings.
U.S. Midwest Refiners Boost Output
U.S. refineries from Ohio to Minnesota are capitalizing on access to cheap crude from Western Canada and North Dakota oilfields, helping their region break a historic dependence on fuel from the Gulf Coast while redrawing oil trade maps. Since the early 2000s, crude and fuel flows from the Gulf Coast into the U.S. heartland have been cut in half, as crude coming from Canada and North Dakota has pushed U.S. Midwest refining activity to record levels. In 2016, Midwest refining capacity rose to 3.9 million barrels per day (bpd) of crude, the highest annual volume on record.
U.S. Crude Imports To Continue To Rise
Due to declining domestic crude oil production and rising oil demand, crude imports will continue to increase over the next two decades accounting for 64 percent of U.S. oil supplies by 2020, the U.S. Energy Information Administration (EIA) said in its annual long-term energy outlook. Currently, the U.S. imports 52 percent, or 8.6 million bpd of its oil and domestic oil output at 6 million bpd is at its lowest level since the early 1950s. U.S. petroleum consumption is projected to rise an average 1.3 percent annually over the next two decades, growing from the current 19.4 million bpd to 25.1 million bpd by 2020, EIA said. Although world crude oil prices have more than doubled since the beginning of 1999…
Vanishing Volatility Signals Oil Market Shift
The oil market has rarely been so quiet. Benchmark Brent has traded in a narrow range of $5 either side of $110 per barrel since the summer of 2012. Price volatility has fallen to some of the lowest levels since crude futures markets were established in the early 1980s. Oil prices have rarely been so stable for so long since the 1973 oil shock ended the long period of calm in the 1950s and 1960s and ushered in the era of OPEC dominance. Measured volatility in front-month Brent futures prices has been below average continuously for almost two years.
Two-month Global LNG Rally Ends, Weak Oil Tempts Buyers
Asian spot liquefied natural gas prices ended their 2-month rally this week, interrupted by weak demand in Japan and South Korea as falling crude oil prices push importers to turn to oil-linked long-term LNG supplies. Spot LNG prices for November delivery lost ground to $14.60 per million British thermal units (mmBtu), versus $15 per mmBtu last week, amid still scarce demand from end-users in Asia. Most LNG trade takes place via 20-year supply deals offered by major oil companies and producer countries such as Qatar, where buyers pay a price linked to the cost of crude oil. With the benchmark Brent crude price slipping nearly as far as $92 a barrel, from $105/barrel several weeks ago, oil-linked LNG for delivery in January is becoming increasingly competitive against spot priced cargoes.
Oil Below $40/bbl After Rise in US Oil Rigs
U.S. crude oil prices on Friday dove below $40 a barrel for the first time since the 2009 financial crisis, notching their longest weekly losing streak in 29 years after a further rise in U.S. drilling and a drop in Chinese manufacturing. Oil prices pushed briefly below the $40-pivot mark following weekly data that showed U.S. energy firms added two oil drilling rigs last week, the fifth increase in a row. The rise in rigs, which is emerging now after a second quarter lull in prices, is adding to concerns U.S. shale production is proving slow to respond to falling prices, prolonging a global glut. "Everyone is still looking at it saying 'Wow, you still don't have production coming down,'" said Tariq Zahir, founder at Tyche Capital in Laurel Hollow, New York.
Italy Breaks up Libyan Fuel Smuggling Ring
Sicilian police on Wednesday sought the arrest of nine people, including a suspected mobster, for running a Libyan fuel-smuggling ring in which at least 30 million euros ($35 million) of diesel was sold in gas stations in Italy and Europe. A Libyan, nicknamed the "boss", used small boats to steal fuel from a refinery in Zawiya, a port city west of Tripoli, a statement from the finance police said. The fuel, stolen from Libya's National Oil Corporation (NOC), was then transferred to a larger ship off the coast of Malta and brought to Italy. Police from the Sicilian city of Catania "documented in detail 30 voyages in which more than 80 million kilos of diesel fuel was imported," the statement said.
Brent Slips below $105
Brent crude slipped under $105 a barrel on Monday, dropping from a one-week high hit on Friday, as U.S. intervention in Iraq eased concerns over the risk of disruption to supply from OPEC's second-largest producer. * U.S. Analysts have said that U.S. air strikes on Islamic State targets in northern Iraq over the weekend could help enforce stability in the country, curbing the risk of supply disruptions. Iraqi Kurdistan said on Friday that its oil output remained unaffected. "For this week…
Statoil Charters ULCC to Hold Crude for Asia buyers
Oil storage is feasible with low freight rates, capital costs; backwardation pushes traders to churn oil faster from storage. Norway's Statoil ASA has chartered the last remaining Ultra-Large Crude Carrier (ULCC), the world's largest oil tankers, to store oil off of Malaysia for distribution in smaller parcels to its clients in Asia, company executives said. Statoil has booked the TI Europe, capable of carrying up to 3 million barrels of oil, more than the daily consumption of South Korea…
Oil Price Crash Claims First US LNG Project Casualty
Excelerate Energy's Texan liquefied natural gas terminal plan has become the first victim of an oil price slump threatening the economics of U.S. LNG export projects. A halving in the oil price since June has upended assumptions by developers that cheap U.S. LNG would muscle into high-value Asian energy markets, which relied on oil prices staying high to make the U.S. supply affordable. The floating 8 million tonne per annum (mtpa) export plant moored at Lavaca Bay, Texas advanced by Houston-based Excelerate has been put on hold, according to regulatory filings obtained by Reuters. The project was initially due to begin exports in 2018. Excelerate's move bodes ill for thirteen other U.S.
Arctic Research Explores the ‘Roomba’ Approach
The pace and quality of oil spill research in the United States typically ebbs and flows as a function of two, if not three important variables. First, after the 1989 Exxon Valdez grounding, there was a flurry of activity to ramp up oil spill research because it had been dormant for so long. The need was recognized, with plenty of money made available. Primarily, this research centered on conventional spill remediation techniques – for example, a tanker or barge spilling oil – and not much else. Predictably, when memory of the spill faded, so did interest in research and funding followed.
Oil Price Depends Less on Supply & Demand Says OAPEC Chief
The selling price of crude oil is more likely to be determined by geopolitical considerations, speculations, status of global oil reserves, rate of the US dollar, conditions at global financial markets, major shares, weather forecast and production and exports, opined Secretary General of OAPEC Abbas Al-Naqqi. Al-Naqqi whose remarks came in a statement issued before the Gulf Petroleum Conference and Exhibition (2012) expressed his belief that events that had prevailed across the Arab world over the past months did not result in significant effects on the prices of oil. Price of crude oil rose from USD 90 per barrel in at the end of 2010 to become USD 12 by the end of April 2011…
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.
US LNG Shipments Point to Global Gas Price Convergence
The emergence of US liquefied natural gas as a competitive alternative for European and Asian customers, combined with an oversupplied market, should drive more convergence between natural gas prices at major hubs and weaken the link between gas and oil prices, Fitch Ratings says. The first shipment of US liquefied natural gas (LNG) from Cheniere Energy's Sabine Pass facility to Europe arrived in Portugal at the end of April. It is unclear how many more shipments will arrive in Europe in the near term…