Reliance’s Nov oil imports down 9 per cent from Oct: Trade sources
India’s Reliance Industries, owner of the world’s biggest refining complex, imported nearly 9 percent less oil in November compared with October and did not purchase Iranian oil, according to data from shipping and industry sources. The sources declined to be identified as they were not authorised to speak to the media. Sources previously told Reuters that Reliance would halt imports of Iranian oil from November to protect its wider exposure to the U.S. economy. The private refiner shipped in about 23 percent of its oil imports from Latin America in November, compared with about 37 percent in September, while the share of Middle East grades in its overall purchases rose sharply to 71 percent, driven by higher purchase of Iraqi oil, from 40 percent. The share of African grades in its overall purchases shrank to just about 4 percent from 16 percent same month last year.
Hungary looks at Cyprus gas to diversity energy supply
Hungary’s foreign minister says Cyprus’ offshore gas deposits could become an alternative energy source for his country, which is seeking to diversify its natural gas supply beyond Russia in order to bolster its energy security. Peter Szijjarto says Hungary “constantly seeks alternative solutions” and that his country considers as “realistic” the supply of gas from Cyprus’ Aphrodite offshore deposit. He said an agreement signed with his Cypriot counterpart Friday will ready the groundwork for Cypriot gas “over the medium term to play a role” in the energy supply of central Europe. Szijjarto also said that Hungary is willing to share its advanced technological know-know with Cyprus in order to help the east Mediterranean island nation with its water shortage problems.
Baker Hughes Things are looking good for oil, but headwinds building up too
Crude prices rallied before the end of the week and gained 5 per cent in reaction to the new production cut agreement. LAst week, OPEC announced that it will reduce overall production among its members by 1.2 million bpd during the first six months of 2019 in an effort to stave off a global glut in supplies and prop up prices. The recent decline in crude prices sparked jitters as international trade relations between China and the US escalated and raised concerns about demand for oil. Market tension intensified after the arrest of Huawei Technologies’s chief financial officer, Meng Wanzhou, in Canada at the request of the US. OPEC meet OPEC-led group agreed to roll back output by 1.2 million bpd during first six months of 2019 against the expectations for a cut between 1 million and 1.4 million bpd. OPEC will curb output by 0.8 million bpd from October levels while non-OPEC allies contribute an additional 0.4 million bpd of cuts. A further breakdown shows Saudi Arabia will reduce its production down to about 10.7 million bpd in December and 10.2 million bpd in January. Russia is going to be responsible for cutting about 2,28,000 to 2,30,000 bpd. Inventory report For this week, data from EIA showed that inventories fell by 7.3 million barrels for the week against the expectations for a decline of 2.39 million barrels. This was the first reported draw in 11 weeks. EIA reported a rise in gasoline stockpiles by 1.7 million barrels against the expectations for an increase of 3,57,000 barrels while distillate stockpiles climbed by 3.8 million barrels against an expectation of 1.25 million barrel build-up in inventories. Offering a hint on US production activity, Baker Hughes reported that the number of active domestic rigs drilling for oil fell by 10 to 877. US exports and imports For this month, the major factor that added pressure to the bearish momentum was data which showed that the US became a net oil exporter last week for the first time in 75 years. US crude oil exports surged to record high of 3.203 million bpd last week as oil production hit record highs. EIA data showed that US crude oil production kept at a record 11.7 million bpd throughout November, which was more than what each of Russia and Saudi Arabia pumped in November, although the Saudis are also expected to have reached record highs in their production last month. Demand China, the world’s biggest oil importer, over the weekend reported an annualised 8.5 per cent jump in November crude imports, to 10.43 million bpd, marking the first time when China imported more than 10 million bpd. That leaves the world’s second-biggest economy on track to set yet another annual import record. The country’s crude imports in November totalled 42.87 million mt, up 10.3 per cent from 38.88 million mt in October. This has supported prices as the increase in imports reduces the fear of slowdown in global demand. Natural Gas Natural gas price moved higher following a drop in the wake of the EIA estimate of stockpiles. The EIA storage report showed a 63 bcf withdrawal from storage stocks during the week-ending November 30. Demand in the US fell in the latest week as LNG exports continue to rise. China has now become the largest importer of natural gas, and a trade agreement would go a long way towards increasing US exports. Total US consumption of natural gas fell by 1 per cent compared with the previous week. Prices remain supported after a strong cold weather forecast for the next week followed by higher demand for natural gas. Conclusion The current trend for crude remains positive and the markets can get an additional boost from a weaker dollar, which could drive up foreign demand for US crude. However, gains could be capped by concerns over a slowing global economy, worries over a potential escalation in the US-China trade dispute and stock market weakness and volatility. Market players will also focus on monthly reports from OPEC and the IEA this week to assess global oil supply and demand levels. We expect crude to trade in a broad range of $50-56 for WTI.
Singapore’s petroleum company Coastal Oil to exit market
Singapore petroleum company Coastal Oil Singapore Pte Ltd has entered liquidation as of Dec. 13, according to the Accounting and Corporate Regulatory Authority. The company has decided to wind up but no other information was available. Coastal Oil declined to comment when contacted. Coastal Oil is a subsidiary of Hong Kong-incorporated Coastal Holdings and handles cargo trading, global oil product supply and blending, according to company website.
China builds 16 bcm of gas storage capacity: State planner
* China’s natural gas storage capacity exceeds 16 bcm this year, the state planner said in a press conference on Friday * Gas companies and other suppliers have filled underground tanks with 8 bcm of gas, said Meng Wei, spokesperson of the National Development and Commission. * China’s daily gas consumption reached 862 million cubic meters on Nov. 21, breaking the record of last winter, Meng said
Energy group Total sells 4 per cent of Ichthys to INPEX for $1.6 billion
French energy company Total has agreed to sell a 4 percent stake in its Australian Ichthys liquefied natural gas (LNG) project to partner INPEX for $1.6 billion, following cost over-runs. “This transaction is part of our constant portfolio review to optimize our capital allocation. Ichthys is part of a wave of Australian LNG projects, which have unfortunately experienced major cost overruns and delays during their construction phase,” Arnaud Breuillac, president of exploration and production at Total, said in a statement.
Oil worth $150 mn stolen from Shell’s biggest refinery over several years
Around $150 millions’ worth of oil was stolen from Shell’s biggest global refinery over several years, Singapore court documents reviewed by Reuters show, far more than reported when police first revealed the heist earlier this year. Almost a year on from raids that led to over a dozen arrests, including of several former employees of the local unit of Royal Dutch Shell, charge sheets state that around 340,000 tonnes of gasoil were stolen from the oil major’s Pulau Bukom site in Singapore, in incidents dating back to 2014. Charges filed in the first few months of investigations after police raids in January related to the theft of around $10 million in oil. Further charges levied in May showed a total of $40 million had been stolen. A spokeswoman for Shell said the firm is “disappointed”, adding that it has been working with investigators and taken measures to avoid repeat incidents at the Pulau Bukom facility, which lies just south of Singapore’s main island. “These include closer monitoring of products moving in and out of Bukom, tightening vessel management procedures, and stepping up ethics and compliance training,” the spokeswoman said in an emailed statement to Reuters on Thursday. Southeast Asia is a hot spot for illegal fuel trading, with its island-dotted waters providing cover for small-scale smuggling of oil products across borders. But the regularity and audacity of the thefts at Shell’s refining facility – some of which took place during working hours – stand out. “Fuel is both ubiquitous and untraceable, making its theft a seemingly low-risk criminal operation compared to something like drug smuggling or arms trafficking, where the concern about being caught is much higher,” said Ian Ralby, a maritime crime expert who works with both the U.N. and the U.S.-based think tank Atlantic Council. “That false sense of security leads to some fairly brazen forms of theft.” Fuel theft could be worth $133 billion a year globally, according to industry estimates, although Ralby said that figure might be conservative. CASE DRAGS The case in Singapore looks like it could drag on, given the routine addition of new charges and amendments to older charges. The police investigation is still ongoing. “We are at the stage that the charges are still being rearranged … it’s quite far from final sentencing,” said Ho Lifen, a lawyer for one of the accused former Shell employees, Chai Zhi Zong. Besides the former Shell employees, there have been related charges filed against former employees of one of Singapore’s biggest marine fuel suppliers, Sentek Marine & Trading Pte Ltd; a Singaporean who worked for Intertek, a British-listed company specializing in quality and quantity assurance, including for fuel products; and three Vietnamese nationals who allegedly received stolen property aboard ships.
Bulgaria to seek binding bids for new gas link by January 16
Bulgaria’s state gas network operator Bulgartransgaz plans to seek binding bids from shippers by Jan 16 for a new gas link to transport mainly Russian gas from the TurkStream pipeline to central Europe, company documents showed on Thursday. Bulgartransgaz plans to take a final investment decision and spend 1.4 billion euros ($1.59 billion) on a new 484-km gas pipeline from its border with Turkey to Serbia by 2020, pending the outcome of the open season. Potential shippers will be invited to register for the bidding from Dec 21 and should file their offers to book capacity for 15 years by January 16, the documents, pending approval by the energy regulator, showed. Bulgartransgaz plans to hold two more rounds of the economic test by the end of January in case it is unable to secure enough interest to make the project viable. Five companies have expressed interest in shipping gas through Bulgaria’s network and sources said Russia’s Gazprom was interested in using most of the capacity. Gazprom said on Nov 30 it was considering whether to book capacity in the Bulgarian gas system. Bulgaria saw that as an intention to ship its gas from TurkStream to Serbia, Hungary and Austria through Bulgaria. Moscow has also suggested that the option for an extension of TurkStream via Greece to Italy is also possible. Gazprom is building TurkStream to bypass Ukraine on the south amid strong political tensions with the West over Russia’s actions against Ukraine in the Kerch Strait. Its two lines will each have an annual capacity of 15.75 billion cubic meters. The first line, which runs from Russia to Turkey under the Black Sea, is intended for Turkish consumption. The United States has said that an extended TurkStream, along with Nord Stream 2 pipeline that aims to bring Russian gas to Western Europe via the Baltic Sea will deepen EU dependence on Russia and increase Moscow’s grip over Ukraine. Brussels has also said that Bulgaria, currently fully dependent on Russian gas, needs to sell Russian gas through its planned gas hub in Varna along with gas from other sources rather than just building transit pipelines. Sofia has vowed to fully comply with EU rules and seek ways to transit some of the gas and sell part of it via its planned Varna hub.
LPG Consumption In India Drops For First Time In Five Years
India’s monthly petroleum products consumption dropped 1.7 per cent to 17,273 in November primarily due to a decline in usage of Liquefied Petroleum Gas (LPG), Diesel, Kerosene and Petcoke, fresh data released by the oil ministry’s statistical arm showed. LPG consumption, which had been recording growth for 62 straight months, declined for the first time in November. It dropped 7.34 per cent to 1,842 tonne during the month as compared to 1,988 tonne recorded in November 2017, data from Petroleum Planning and Analysis Cell (PPAC) showed. Consumption of cooking gas has been buoyant over the past few years mainly due to increased LPG penetration under Pradhan Mantri Ujjwala Yojana (PMUY). According to the latest figures available on the PMUY website, state-owned Oil Marketing Companies (OMCs) have distributed 58.4 million LPG connections under the scheme. LPG penetration in the country has gone up to 88.5 per cent in 2018 as compared to 56.2 per cent in 2015, according to oil ministry data. A senior executive at one of the Oil Marketing Company (OMC) told ETEnergyWorld that LPG penetration has almost reached a saturation point and consumption of LPG may from now be flat or witness decline in the coming future. Petrol consumption grew at 8.72 per cent to 2,318 tonnes during the month on the back of robust growth in the sale of two-wheelers, which account for around 60 per cent of the country’s petrol demand. Data sourced from the Society of Indian Automobile Manufacturers (SIAM) shows that domestic two-wheeler sales in November grew 7.15 per cent to 16,45,791 units aiding the consumption of petrol. Consumption of diesel declined 4.80 per cent to 6,921 tonnes in November despite a robust growth in sales of commercial vehicles, a driver of diesel consumption. Domestic sales of commercial vehicles grew 5.71 per cent to 72,812 units during the month. Consumption of Aviation Turbine Fuel (ATF) grew 5.07 per cent to 683 tonnes in November as compared to the corresponding month a year ago, on the back of growth in domestic air traffic. Also, the consumption of pet-coke, a polluting fuel primarily used in the cement and power industries, witnessed a decline of 2.26 per cent to 1,856 tonnes. However, according to PPAC, the consumption of pet-coke by the cement industry is on the rise after the Supreme Court order of December 2017 allowed its use as a feedstock. The Directorate General of Foreign Trade under the commerce ministry has also banned import of pet-coke for use as fuel. It has allowed its import only for use as feedstock in a few select industries such as cement, lime kiln, calcium carbide and gasification industries.