Crude oil boosted as EIA forecasts price rise in H2
Crude oil futures traded marginally higher on Thursday morning as the US Energy Information Administration (EIA) estimated an increase in crude oil prices through 2024. At 9.53 am on Thursday, September Brent oil futures were at $79.53, up by 0.09 per cent, and September crude oil futures on West Texas Intermediate (WTI) were at $75.38, up by 0.12 per cent. August crude oil futures were trading at ₹6,196 on Multi Commodity Exchange (MCX) in the initial trading hour of Thursday morning against the previous close of ₹6,206, down by 0.16 per cent, and September futures were trading at ₹6,215 as against the previous close of ₹6,224, down by 0.14 per cent. US EIA forecast higher crude oil prices in the second half of 2023 and into 2024 because of moderate but persistent inventory drawdowns, which occur when demand exceeds supply. “We expect production cuts from OPEC members and forecast higher petroleum consumption will lead to an average inventory drawdown of 0.4 million barrels per day between July 2023 and the end of 2024,” it said. It forecast an increase in Brent crude oil price to mid-$80 a barrel by the end of 2024, up from the June 2023 average of $75 a barrel. It forecast a similar path for the WTI crude oil price, to maintain a discount to Brent of $5 a barrel. US EIA estimated that Saudi Arabia accounted for about 10 per cent of the global production of petroleum and other liquid fuels, or 10.1 million barrels a day, in June 2023. “We forecast OPEC production of petroleum and other liquid fuels will average 33.9 million barrels a day in 2024, down 1.2 million barrels a day from the group’s 2022 peak of 35.1 million barrels a day. These production cuts will keep total OPEC production below the pre-pandemic five-year (2015–19) average of 36.2 million barrels a day and reduce OPEC’s share of world production to 33 per cent in 2024, down from the pre-pandemic average share of 37 per cent,” it said.
India’s oil & gas import bill contracts 33% y-o-y in April-June quarter as prices drop
India’s oil and gas import bill contracted by a third from a year earlier to $35 billion in the April-June quarter as prices sharply dropped, as per the oil ministry data. Crude oil worth $31.4 billion was imported during the April-June period, lower than $48.1 billion in the same period last year. The volume of oil imports marginally reduced to 60.1 million metric tonnes (mmt) in the first quarter from 60.7 mmt in the same period last year. Liquefied natural gas (LNG) imports rose 4.3% in volume terms to 7590 mmscm but in value terms dropped 19% to $3.8 billion Oil and gas prices were extremely volatile in the April-June quarter last year due to the uncertainties induced by the Russia-Ukraine war and the consequent Western sanctions imposed on Moscow. The global crude benchmark Brent averaged $116 per barrel in the April-June of 2022. It was 35% lower at $76 per barrel in the same period this year.
HPCL setting up green hydrogen plant in Andhra: MoS Rameswar Teli
State-owned Hindustan Petroleum Corporation Limited (HPCL) is setting up a 370-tonne-per-annum electrolyzer-based green hydrogen plant at Visakh Refinery in Andhra Pradesh, Union Minister of State (MoS) for petroleum and natural gas Rameswar Teli informed Parliament on Thursday In a written reply to a question in Lok Sabha, the minister said the state-owned entity spent INR 110 million out of a total fund allocation of INR 330 million for this project. The scheduled completion date of the project is September this year, the minister added. Union Cabinet in early January approved the National Green Hydrogen Mission, aiming to make India a global hub for such technologies’ production, utilization, and export.
National Gas Grid: 68 Per Cent Work Complete, All States Likely To Get Connected By 2026
A total of 23,173 kilometre of natural gas pipelines, including spur lines, are operational in the country and another 12,206 kilometre length of pipeline is under various stages of construction. This information was provided by Union Minister for Petroleum and Natural gas, Hardeep Singh Puri, while replying to a question in Lok Sabha on 20 July. The Petroleum and Natural Gas Regulatory Board (PNGRB), which is the regulator for gas pipeline infrastructure, has authorised the development of 33,592 km natural gas pipeline network in the country. The pipeline projects are being implemented by various entities including oil companies as per the authorisation by PNGRB. All natural gas pipelines are part of the ‘Gati Shakti National Master Plan’. Under-Construction Projects The Minister in his reply also furnished target dates for the completion of various natural gas pipeline network under implementation. Kakinada-Vizag-Srikakulam: This natural gas pipeline in Andhra Pradesh, which is being executed by Andhra Pradesh Gas Distribution Corporation, will be completed by June 2024. Kakinada-Vijayawada-Nellore: This pipeline, in Andhra Pradesh which has been allotted to IMC Limited, is to be completed by March, 2024. Srikakulam-Angul: The 744-km-long pipeline project from Srikakulam in Andhra Pradesh to Angul in Odisha via Ganjam, Nayagarh, Khordha, Cuttack, and Dhenkanal is to be completed by July 2023. Ennore-Nellore: The pipeline connecting Chennai’s northern suburb of Ennore to Nellore in Andhra Pradesh was scheduled to be completed by April 2020, but is currently stalled due to litigation. North-East Natural Gas Pipeline Grid: The 1,656-km-long North-East gas grid, will cater to eight states of Northeastern India in a phased manner. Being executed by Indradhanush Gas Grid Limited — a joint venture company of five central public sector enterprises, namely, IOCL, Oil India Ltd, Numaligarh Refineries, ONGC, and GAIL — the entire project is targeted to be completed by 31 March 2024. Kanai-Chhata-Panitar Pipeline: Being developed by Hooghly Pipelines Private Limited, a subsidiary of H-Energy, the natural gas pipeline from Haldia to Panitar is to be completed by September 2023. Mumbai-Nagpur-Jharsuguda: The 1755-km-long ambitious project, encompassing vast geographical areas across Maharashtra, Madhya Pradesh, Jharkhand, and Odisha is under the advanced stage of completion and has sought an extension till 30 October 2024. Jamnagar-Dwarka: The pipeline between Jamnagar and Dwarka in Gujarat will be completed by August 2024. The 33,592 kilometre pipeline network will create a national gas grid in the country and help increase the share of natural gas in the primary energy mix to 15 per cent in 2030, from about 6.3 per cent currently.
China Snaps Up Record-High Volumes Of Russian Crude In The First Half Of 2023
Despite an apparent weakness in its economy, China is importing record volumes of oil and is buying record amounts of Russian crude to add to stockpiles. During the first half of 2023, Chinese imports of Russian crude oil averaged 2.13 million barrels per day (bpd), which helped Russia oust its OPEC+ partner Saudi Arabia from the top spot as the single biggest supplier to the world’s top crude importer so far this year, per Financial Times estimates based on Chinese customs data. Imports from the world’s top crude oil exporter, Saudi Arabia, averaged 1.88 million bpd between January and June, according to FT’s calculations. In June alone, China broke – for yet another month – the record for importing Russian crude oil, per data from the Chinese General Administration of Customs cited by Reuters. Chinese imports from Russia averaged 2.56 million bpd last month, a surge of 44% compared to the same month in 2022, the Chinese customs data showed. The previous record, of 2.29 million bpd, was set in May as Chinese refiners continued to buy discounted Russian oil. The discounts for Russia’s crude narrowed relative to the benchmarks in June, but this didn’t stop China from boosting imports and breaking in June the record from May. China’s imports from Saudi Arabia also rose in June, compared to May and June last year. But at 1.93 million bpd in June 2023, those imports still trailed behind the record-breaking Chinese crude oil imports from Russia. Total Chinese oil imports are also surging. China’s crude oil imports in June jumped by 45.3% on the year to the second-highest monthly figure on record, as refiners continued building up inventories despite weak domestic demand. Oil imports in June totaled 12.67 million bpd—a sharp increase from a year ago when the country was still under Covid-19 lockdowns.
Has India’s appetite for Russian oil peaked? What latest data shows
India’s imports of oil from Russia rose to an all-time high in June. However, the growth in import was the slowest pace since October 2022 This is being seen as a signal that India’s appetite for Russian oil may have peaked, Reuters reported citing tanker data. Indian refiners have been buying Russian oil heavily ever since Russia began selling it at a discount following western sanctions in the wake of the Ukraine war. Discounts have now narrowed and problems have arisen in payments settlement. That has lately sent Indian refiners on the lookout for for alternative sources in the Middle East. India bought nearly 2 million barrels per day (bpd) of Russian crude in June. It accounted for a marginal growth from over May, data showed. Before the Ukraine war, India rarely bought oil from Russia because of high freight costs. India’s June imports of Russian oil exceeded its combined purchases from Iraq and Saudi Arabia, the second- and third-biggest sellers to New Delhi. The United States emerged as the fourth-largest supplier to India, pushing UAE to the fifth place, the data showed. In terms of market share, Russia supplied about 42% of India’s crude oil imports in April-June, the first quarter of India’s fiscal year, the data showed, while the Middle East share rose to about 41% after slipping in the previous three months. Imports from the Middle East fell by about 34% in the June quarter from a year ago, while those from the C.I.S. nations – Azerbaijan, Kazakhstan and Russia – nearly trebled, the data showed. Lower imports from the Middle East dragged down OPEC’s share in India’s overall crude imports.
GAIL, LanzaTech Enter Strategic Partnership to Explore Biorecycling Carbon Waste into Fuels and Chemicals
GAIL (India) Limited, India’s largest natural gas company and LanzaTech Global, Inc., USA, an innovative carbon capture and utilization (“CCU”) company that converts waste carbon into products that people use in their daily lives, have entered a partnership to explore innovative technology solutions that advance GAIL’s Net Zero 2040 goals and have the potential to support wider decarbonization applications globally. GAIL and LanzaTech will explore setting up a pilot scale CO2 capture and conversion project that has the potential to be a role model for converting CO2 into useful materials instead of emitting it to the atmosphere. Combining LanzaTech’s carbon capture and utilization technology with GAIL’s renewable H2 and CO2 gas streams, the project will enable resource utilization where the building blocks of everyday consumer goods viz. Fuel, Packaging and Clothing can be made from biorecycled material instead of virgin fossil fuel. “The possibilities coming out of this collaboration with LanzaTech are very promising and significant to improving our carbon footprint,” said Sandeep Kumar Gupta, Chairman and Managing Director of GAIL. “Using LanzaTech’s cutting-edge technology will enhance our environmental stewardship and open up new avenues for driving sustainability across our operations.” “Waste CO2 can be used to make the things we need,” said Dr. Jennifer Holmgren, LanzaTech’s CEO and Board Member of the US-India Strategic Partnership. “By combining LanzaTech’s expertise in carbon recycling with GAIL’s commitment to reducing emissions and implementing renewable projects, this project has the potential to turn CO2 from an environmental liability to a value added product. CO2 can be the raw material of the future, enabling fossil carbon to stay underground. We look forward to launching our collaboration with GAIL to make this vision a reality.”
Amid supply concerns, Indian crude basket rises 4% in July
The Indian crude oil basket which was largely subdued in May and June has witnessed over 4% increase in its average price in July amid global supply concerns. The average Indian crude basket for July stands at $78.22 per barrel, compared to $74.93 a barrel in June. In May, it averaged at $74.98 a barrel as prices eased amid growing concerns of a global slowdown.
Energy storage, offshore wind, Green Hydrogen define govt’s renewable energy strategy: MNRE Joint Secy Jagdale
In order to boost and support India’s renewable energy sector going forward, the government is working on a multi-pronged strategy that focus on energy storage, offshore wind and Green Hydrogen simultaneously, according to Dinesh Jagdale, Joint Secretary, Ministry of New and Renewable Energy (MNRE). Speaking at the US-India Energy Summit here, Jagdale said MNRE has adopted a strategy of faster adoption of renewable energy in the Indian electricity sector. “We are following the mantra of greening the grid and more electrifying of the economy. This is the way forward and at this stage defines our endeavour to move towards India’s energy transition,” he said. agdale was speaking as a panelist in a discussion on “Fostering Innovation: Technology for Sustainability”. He said the results of MNRE’s efforts over the past 5-6 years are being seen now, the electricity grid has adopted RE at a fast pace, solar power which has shown maximum growth and wind energy’s growth is also set to pick up. “What is really important is the new areas of growth we are looking at. With more penetration of renewable energy we require more support to the grid. We now need a grid that is stronger, safer and more secure. Looking at the energy era that is going to come till 2030, and the pace at which the energy capacity will be added, it will also require a lot of support in other systems and we need to add energy storage capacity,” he said.
Netherlands was top destination for US LNG supplies in May
The Netherlands was the top destination for US LNG exports in May, according to the Department of Energy’s newest LNG monthly report. The report shows that US terminals shipped 64.5 Bcf of LNG to the Netherlands in May, 51.7 Bcf to France, 31.2 Bcf to Japan, 26.9 Bcf to Argentina, and 25.2 Bcf to the UK. These five countries took 54.4 percent of total US LNG exports in May. Previously, the UK was the top destination for US LNG supplies for six months in a row. The Netherlands has expanded its capacity with the launching of Gasunie’s Eemshaven FSRU-based LNG terminal. The country’s first FSRU-based terminal adds to the Gate LNG import facility in Rotterdam, also operated by Gasunie and Vopak. US LNG exports rise 4.4 percent The US exported in total 366.7 Bcf of LNG in May, up by 4.4 percent compared to the same month last year and a drop of 1.4 percent from the prior month, the DOE report shows. US terminals shipped 127 LNG cargoes in May, compared to 114 cargoes in May 2022 and 110 cargoes in April this year, according to the report. Cheniere’s Sabine Pass plant sent 38 cargoes, while its Corpus Christi terminal shipped 18 cargoes in May. In addition, Cameron LNG dispatched 29 shipments, Freeport LNG sent 28 cargoes, Cove Point LNG sent 11 cargoes, and Elba Island LNG dispatched 3 shipments. 4816 LNG cargoes According to DOE’s report, the weighted average price by export terminal reached 7.05/MMBtu in May. Moreover, the report said that in the period from February 2016 through May 2023, the US exported 4816 cargoes or 15,368.6 Bcf to 44 countries. South Korea remains the top destination for US LNG with 524 cargoes, followed by Japan with 393 cargoes, the UK with 390 cargoes, France with 364 cargoes, and Spain with 371 cargoes. Besides these five countries, China, the Netherlands, India, Turkey, and Brazil are in the top ten as well