U.S. record oil exports bite into Russia, OPEC market share in Asia
Record crude oil volumes exported from the United States will be heading to Asia in the next couple of months to take another piece of the market away from Russia and producers in the Organization of the Petroleum Exporting Countries (OPEC). The United States is set to export 2.3 million barrels per day (bpd) in June, of which 1.3 million bpd will head to Asia, estimated a senior executive with a key U.S. oil exporters. Data from the Energy Information Administration shows U.S. oil exports peaked at 2.6 million bpd two weeks ago. The record outbound volumes come as U.S. crude production hit all-time highs, depressing U.S. prices to discounts of more than $9 a barrel below Brent crude futures on Monday, the widest in more than three years and opening an arbitrage for excess supplies to other markets. The difference in the key benchmarks was a chance for Asian refiners to reduce light crude imports from the Middle East and Russia after Brent and Gulf prices touched multi-year highs, traders in Asia said. “We’re diversifying a lot to other regions. If Saudi Aramco still doesn’t reduce prices next month and ADNOC (Abu Dhabi National Oil Company) follows, we will increase our U.S. crude purchases,” a Southeast Asian oil buyer said. CHINA BUYS AMERICAN In Asia, China – led by Sinopec, the region’s largest refiner – is the biggest lifter of U.S. crude. The company, after cutting Saudi imports, has bought a record 16 million barrels (533,000 bpd) of U.S. crude, to load in June, two sources with knowledge of the matter said. India and South Korea are the next biggest buyers in Asia, each lifting 6 million to 7 million barrels in June, sources tracking U.S. crude sales to Asia said. Indian Oil Corp bought 3 million barrels earlier this month via a tender, while Reliance Industries purchased up to 8 million barrels, the sources said, although it wasn’t clear if Reliance’s cargoes would all load in June. The sources declined to be named due to company policies. South Korea’s purchases are driven by its top refiners SK Energy and GS Caltex. Taiwanese state refiner CPC Corp has also snapped up 7 million barrels to be lifted in June and July. U.S. exports to Thailand will increase to at least 2 million barrels. State oil company PTT PCL is 1 million barrels of WTI Midland, while Thai Oil and Esso Thailand bought at least 500,000 barrels of Bakken crude each, said traders with knowledge of the country’s crude deals. Reliance declined to comment. PTT, Thai Oil and Esso Thailand all did not respond to requests for comment. But even if Asia and Europe are keen to take more U.S. crude, the record volumes are straining export infrastructure in the United States, limiting its ability to pump and ship more oil. “Tight (shale) oil’s been eating OPEC’s lunch for the last few years. The lack of infrastructure will temporarily cede market share back to OPEC,” R.T. Dukes, head of U.S. Lower 48 oil supply at Wood Mackenzie said in a note last week. Curtis Martin Womens Jersey
Shell, Chevron returning to eastern Gulf of Mexico after storm
Royal Dutch Shell Plc was returning workers to the eastern Gulf of Mexico and Chevron Corp restored some production on Monday after the passage of Subtropical Storm Alberto, the companies said. Shell plans to restore production at its Ram Powell Hub in the Viosca Knoll area of the Gulf as it soon as it confirms the platform can be operated safely, the company said in a statement. On Friday, Shell shut in production at its offshore Ram Powell hub ahead of the storm’s move into the U.S. Gulf of Mexico. The facility is capable of processing about 60,000 barrels of oil and 200 million cubic feet of gas per day. Separately, Chevron restored production on the Blind Faith and Petronius production platforms in the Gulf after the passage of Storm Alberto, a company spokeswoman said on Monday. The two platforms were shut in as Alberto, the first named Atlantic storm of 2018, was charging across the eastern Gulf. The Atlantic hurricane season officially begins on June 1. The Gulf of Mexico is home to 17 percent of daily U.S. crude output and 5 percent of natural gas output, according to the U.S. Energy Information Administration. More than 45 percent of U.S. refining capacity and 51 percent of natural gas processing capacity are located along the Gulf. Devon Kennard Authentic Jersey
States can lower petrol prices by Rs 2.65, diesel by Rs 2: SBI research report
States can cut petrol prices by Rs 2.65 a litre and diesel prices by Rs 2 litre, a SBI research report has said. This suggestion has come at a time when government-owned oil marketing companies have hiked fuel prices for 15th successive day. Retail price of petrol on Monday were at Rs 78.27 a litre in Delhi, Rs 86.08 a litre in Mumbai, Rs 80.91 a litre in Kolkata and Rs 81.26 a litre in Chennai. All these prices are the highest so far. Similarly, diesel was being sold at Rs 69.17 a litre in Delhi, Rs 71.72 a litre in Kolkata, Rs 73.64 a litre in Mumbai and Rs 73.03 a litre in Chennai. Now the good news is that Brent crude prices have slipped from a record high of $80 a barrel (one barrel = 159 litres) and is now hovering in the range of $75-76 a barrel. The Government has maintained that it is trying to find out a solution for rising fuel prices. A report authored by Dr. Soumya Kanti Ghosh Group, Chief Economic Adviser, SBI, believed that finding a lasting solution to the current increase in oil prices is a delicate balancing act. “Our analysis shows that at the current crude prices, and extending our analysis to 19 States (overall consumption share is 93 per cent both in petrol and diesel), the States could have gained at least an additional Rs 187.28 billion of revenue/Rs 26.75 billion additional revenue over and above the budget estimates of States revenue for every $1/barrel increase in oil prices,’’ it said. It further added that given that these revenue if foregone will not impact the States fiscal position. “We estimate that on an average, States can cut petrol prices by Rs 2.65 /litre and diesel by Rs 2/ litre, if the entire revenue gain was to be neutralised. This is the most plausible scenario under the current circumstances,” it said. It has one more suggestion to lower the prices but it could raise fiscal deficit for the States. “One suggestion to further rationalise the petrol and diesel prices is to consider a pricing mechanism where VAT is imposed on base price only by States and not on prices inclusive of Centre’s tax. If this was the case, diesel prices could further reduce by Rs 3.75 /litre and petrol prices by Rs 5.75/ litre,” it said, while adding that such an exercise would cost Rs 346.27 billion of tax revenues and translate into 0.2 per cent of consolidated fiscal deficit of states. Supporting Centre’s reluctance on reducing the excise duty, the report said that if the Centre cuts the excise by Re 1, the loss of revenue will be to the tune of Rs 107.25 billion for every Re 1 cut in central excise. This will push up the deficit of Centre, unlike states. “We strongly believe that the revenue collected by the Centre on oil through excise duty has helped it to significantly step up capex expenditure from the levels of FY14. Road building has jumped by 2.3 times over 4,260 km in FY14 and railways capex by 2 times from Rs 674.32 billion in FY14 and provision of financing social sector programmes and MSP support programme in FY19 budget,” it said. Tyreek Hill Womens Jersey
The fall in crude oil prices is just what Modi needed
The sharp fall in global crude oil rates over the last couple of days may come as a breather for India’s Narendra Modi government which had run into tricky political waters over rocketing fuel prices. The world’s three largest oil producers—Saudi Arabia, Russia, and the US—have increased supply, leading to a near 5% crash in the global benchmark Brent crude since Friday (May 25). Earlier, the world’s major oil-exporting nations had cut back production, leading to the surge in oil prices since the start of the year. That, in turn, led to surging domestic prices, putting the government at odds with voters a year before the next general election. India’s fuel retailers have hiked petrol and diesel prices now for 15 days in a row to pass on the rise in global prices. This had led to a demand for a cut in duties that make up for over half the retail price in India. Even Rajiv Kumar, the vice-chairman of the government’s leading think tank, the Niti Aayog, had advised a cut in duties at both the central and the state level to ease consumers’ load. However, the government did not budge as the proposed cut in duties would have eaten into its revenue, further stretching its delicate financials. Now, bringing some respite to Modi, the tide has halted, at least temporarily. The Oil and Petroleum Exporting Countries (OPEC), the lobby of the world’s largest oil producers, along with Russia, is looking to pump more oil as the global inventory has depleted. OPEC had cut back production at the start of 2018 to ensure a reduction in global inventories. On the other hand, the latest data show that US oil producers have hired more rigs than in any one week since 2015. Drillers in the US have stepped up production now that global crude oil prices are back to a level that is well above their cost of production. International crude prices may have come off the spiral for now, but it may be too soon to predict that the slide will continue unabated. Chicago Bears Womens Jersey
Oil Ministry gives in-principle nod to launch petrol, diesel futures: ICEX
The oil ministry has given its in-principle approval for futures trading in petrol as well as diesel and the final clearance from regulator SEBI should come soon, a top official of commodity derivatives exchange ICEX said today amid rising fuel prices. The development also comes at a time when state-run oil marketers have hiked petrol and diesel prices continuously for the past two weeks. “The Petroleum and Natural Gas Ministry has given an in-principle nod to launch petrol and diesel futures contracts and we are hoping that SEBI will give final approval in this regard soon,” ICEX Managing Director and Chief Executive Officer Sanjit Prasad told PTI. He said the decision was taken by the ministry after consultations with oil marketing companies and other experts. The contracts are expected to help hedge against volatility in oil prices. The Indian Commodity Exchange (ICEX) had approached SEBI seeking its nod to launch petrol and diesel futures contracts. Following this, the capital markets watchdog had sought views from the ministry in this regard. ICEX was asked by the ministry to give a detailed presentation on petrol and diesel futures contracts to oil minister Dharmendra Pradhan, senior bureaucrats and oil marketing companies, Prasad noted. “After getting approval from the regulator, we will soon launch the product as we have all the infrastructure in place for this,” he added. Petrol price has been hiked by Rs 3.64 a litre and diesel by Rs 3.24 in Delhi since state-owned oil firms ended a 19-day pre-Karnataka poll hiatus to resume daily price revision on May 14. Diamond futures Last month, the commodity exchange launched 30-cents diamond futures contracts in addition to its product basket of 1-carat and 50-cents contracts. The bourse had launched the world’s first diamond derivatives contracts in August 2017 with 1-carat futures contracts, and had subsequently added the 50-cents contracts. Keke Coutee Authentic Jersey
PM Modi: 100 million LPG connections given in 4 years against 130 million in 6 decades
Prime Minister Narendra Modi on Monday said 100 million LPG connections including 40 million free to poor women, were given in last four years, compared to 130 million in six decades since independence, as his government stepped up efforts to shield women and children from kitchen smoke. Interacting through video-conference with some of the women beneficiaries who received free cooking gas connection under the Pradhan Mantri Ujjwala Yojana, Modi recounted his own childhood when his mother struggled with smoke emitting from cooking on firewood or cow dung, to say his government will increase coverage of clean fuel to 100 per cent households in the near future. “Till 2014, only 130 million LPG connections were given. These were mostly to rich and affluent class. In the past four years, we have given 100 million new LPG connections, mostly to poor,” he said. “Ujjwala Yojana has strengthened the lives of the poor, marginalised, dalits, tribal communities. This initiative is playing a central role in social empowerment.” Launched in May 2016, the scheme aims to provide in next three years as many as 50 million free cooking gas connections to women from extremely poor households, aimed at reducing the use of polluting fuels such as wood and dried cow dung that, according to the World Health Organization, cause 1.3 million premature deaths in India every year. The target was raised to 80 million this year by adding two additional years. India aims to increase liquefied petroleum gas (LPG) usage to cover 80 per cent of its households by March 2019, against 72.8 percent in 2017. The Prime Minister did not give a date for achieving 100 per cent coverage. Modi said LPG is the cleanest and easily available source of energy that is giving women a healthier lifestyle, saving them time, helping them financially and saving the environment. As many as 45 per cent of the 40 million free LPG connections given under Ujwalla are to dalits, he said. Stating that his government stood for empowerment of the dalits, the Prime Minister said more than 1,200 petrol pumps have been given to dalit families since 2014 as compared to 445 retail outlets given to such families during 2010-2014 period of the previous UPA regime. Similarly, 1,300 families got LPG distributorship as compared to 900 in the previous years. The government, he said, is very serious in eliminating middlemen and so the beneficiary list has been made transparent. Apart from those included under socio-economic caste census (SECC) to avail the scheme, the extended Pradhan Mantri Ujjwala Yojana would now cover all SC/ST households, most backward classes, beneficiaries of Pradhan Mantri Awas Yojana (Gramin), Antyoday Anna Yojana, forest dwellers, people residing in river and river islands. Modi said the government is targeting 0.1 million LPG Panchayats (peer learning platforms to support behaviour change in Ujjwala beneficiaries) this year to boost the LPG refill consumption and provide a window for the benefits of cleaner fuel to become visible. Under the Pradhan Mantri Ujjwala Yojana, the government provides a subsidy of Rs 1,600 to state-owned fuel retailers for every free LPG gas connection that they install in poor rural households without one. This subsidy is intended to cover the security fee for the cylinder and the fitting charges. The beneficiary has to buy her own cooking stove and refills. To reduce the burden, the scheme allows beneficiaries to pay for the stove and the first refill in monthly installments. However, the cost of all subsequent refills has to be borne by the beneficiary household. He said 70 per cent of the villages are 100 per cent covered by LPG and 81 per cent village are covered up to 75 per cent. In his interaction with women beneficiaries from different states, he asked them if they were getting LPG refills on time and if any middlemen were asking for money. He asked them about their experience of using LPG and how it saved them time, which they can utilise for supporting the family financially by starting schemes like tiffin service. Modi said he will never forget one of Premchand’s stories, Idgah. “The story is about young Hamid, who does not buy sweets or gifts during Id but buys a ‘Chimta’ so that his grandmother does not burn her hands while cooking. This story is extremely emotional.” “Ujjwala Yojana is leading to better health for India’s Nari Shakti,” he said. Louis Lipps Authentic Jersey