By Christine Harvey Apr 24, 2014 3:48 AM GMT+0700 0 Comments Email Print
U.S. East Coast gasoline rose to a five-month high as imports to the area declined and refinery maintenance continued in eastern Canada and New Jersey.
Reformulated, 84-octane gasoline, or RBOB, in the New York Harbor strengthened 0.88 cent to 3.88 cents a gallon above futures on the New York Mercantile Exchange at 3:16 p.m., the highest premium since Nov. 15, according to data compiled by Bloomberg.
New York’s gasoline premium swelled for a fourth day. Motor fuel imports to the East Coast dropped 63,000 barrels a day to 402,000 barrels in the week ended April 18, the lowest level since March 14, according to weekly U.S. Energy Information Administration data. Stockpiles of RBOB gasoline fell to 15.8 million barrels, compared with 21 million barrels a year earlier, the data showed.
“Imports to New York are limited and there are very few vessels arriving in the near term,” said Tom Finlon, director of Energy Analytics Group Ltd. “There are some signs chartering will pick up next week but supply should stay limited for at least a week or two.”
Irving Oil’s Saint John, New Brunswick, refinery, which sends over half of its products to the U.S. Northeast, expects to complete maintenance this week, while work continues at Valero Energy Corp. (VLO)’s Quebec City site and Suncor Energy Inc.’s Montreal plant. PBF Energy Inc.’s Paulsboro, New Jersey, refinery conducted maintenance on a crude unit.
U.S. demand for gasoline in the four weeks to April 18 averaged 8.7 million barrels a day, a two-year seasonal high, according to EIA data.
The 3-2-1 crack spread in New York, a rough estimate of refining margins based on European benchmark Brent oil, increased 20 cents to $20.37 a barrel, the strongest since July, according to data compiled by Bloomberg.
To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net
To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Richard Stubbe, Margot Habiby
By Anthony DiPaola Apr 23, 2014 6:47 PM GMT+0700 0 Comments Email Print
Abu Dhabi’s state oil producer is almost finished reviewing technical aspects of international companies’ bids to develop the biggest onshore crude deposits in the emirate, two people with knowledge of the situation said.
Evaluating expansion plans and output targets proposed by 11 companies from the U.S., Europe and Asia seeking the concessions may take about two weeks more, said the people, who asked not to be identified since the process is confidential. Picking the best commercial terms among the offers, including how much companies would like to be paid for the work, should be finished this year, they said.
Abu Dhabi, capital of the United Arab Emirates and holder of most of the country’s crude reserves, is seeking new partners to help expand oil output. Exxon Mobil Corp., BP Plc, Royal Dutch Shell Plc and Total SA in January lost rights as partners in the company operating Abu Dhabi’s onshore fields when their joint venture agreement expired after seven decades.
“We have a process and that process is ongoing,” Abdulla Nasser Al Suwaidi, director general of Abu Dhabi National Oil Co., said on the sidelines a company event yesterday when asked about progress in the bidding. “There is no timetable” for naming winners, he said.
Abu Dhabi pumped 2.7 million barrels a day in March, or about 10 percent of all oil supplied by the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg.
The four former partners have contracts allowing them to continue buying Abu Dhabi crude oil for a six-month period from the end of the concession in January, according to Al Suwaidi. “We will see after that, subject to negotiation,” whether the contracts will be extended, he said. The companies had access to crude supply as shareholders in the deposits.
BP, Exxon, Shell, Total and seven others picked by Adnoc were invited to submit bids for the fields by October. Adnoc is reviewing the offers before submitting its recommendations to the Supreme Petroleum Council, Abu Dhabi’s top energy policy body, for a final decision on who the new partners will be.
To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net John Deane
By Mark Shenk Apr 24, 2014 2:54 AM GMT+0700 5 Comments Email Print
The U.S. is stockpiling the most crude since the Great Depression, thanks to the shale boom that has boosted production to the most in 26 years.
Inventories rose 3.52 million barrels last week to 397.7 million, the highest level since 1931, according to Energy Information Administration data going back to 1920. Crude output climbed 59,000 barrels a day to 8.36 million, the most since January 1988, as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas.
The burgeoning supply has sparked arguments over whether a 1975 law that prevents most U.S. crude exports should be repealed. It also may reduce the impetus for a quick approval of the Keystone XL pipeline moving Canadian crude to the U.S. Average weekly imports are down 3.7 percent so far this year, compared with the same period in 2013.
“This paints a secure supply picture for the U.S.,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “This will add to the political debate about exports and Keystone. Whatever issues arise, it’s important to remember you would rather deal with the problems of a supply glut rather than a dearth.”
Keystone XL
President Barack Obama’s administration said on April 18 that it will postpone a ruling on Keystone XL. The State Department said it wouldn’t make a recommendation until questions are resolved about the way the pipeline’s northern route through Nebraska was approved. The southern portion of the project began moving crude in January to the Texas Gulf Coast from Cushing, Oklahoma.
Inventories along the Gulf Coast, known as PADD 3, rose 2.44 million barrels to 209.6 million last week, the most in EIA data going back to 1990.
Much of that inventory is light, sweet crude, or oil with low density and sulfur content, from the shale fields. Many refineries along the Gulf Coast are designed to run most efficiently on cheaper heavy, sour barrels imported from Mexico and Venezuela.
“The problem is that we have a glut of light, sweet crude when what we need is sour,” Schork said. “There have to find a way to swap the barrels we’ve got in hand or exporting them, so we can take full advantage of the rise in output.”
Energy Independence
Harold Hamm, the chairman and chief executive officer of Continental Resources Inc. (CLR), who became a billionaire drilling in North Dakota, told U.S. lawmakers Jan. 30 that the country, which EIA data show supplied 86 percent of its own energy last year, can drill its way to full independence by 2020. Hamm is leading an effort to get Congress to allow crude exports for the first time since the 1970s.
Senator Lisa Murkowski of Alaska, the senior Republican on the Energy and Natural Resources Committee, said in a Jan. 7 speech that she also supports changing the export rules.
The federal Jones Act restricts domestic seaborne trade to vessels owned, flagged and built in the U.S. and crewed by citizens. Thirteen tankers can haul crude domestically out of a global fleet of about 2,400, according to the U.S. Transportation Department’s Maritime Administration. The Jones Act is a 94-year-old law.
WTI Slips
West Texas Intermediate crude for June delivery slipped 31 cents, or 0.3 percent, to settle at $101.44 a barrel on the New York Mercantile Exchange. Futures ended trading at $104.37 a barrel on April 21, the second-highest level of 2014.
The U.S. inventory level was the highest in EIA weekly data begun in 1982 and monthly government data going back to 1920. Reports before 1976 were based on data from the Bureau of Mines, according to the EIA, and stockpiles of Alaskan crude oil in transit were included starting in 1981.
Imports decreased 475,000 barrels a day to 7.8 million in the seven days ended April 18. Arrivals have averaged 7.46 million barrels in 2014, according to EIA figures, down from 7.74 million for the first 16 weeks of 2013.
“Imports remain strong,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’ve yet to waive off imports but may be nearing a breaking point because of swollen supplies along the Gulf Coast. When that occurs, there will be a major rebalancing of global markets.”
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Philip Revzin, Richard Stubbe
Iranian natural gas supplies to Iraq is expected to commence in another four months, Iran’s Gas Engineering and Development Company announced on Tuesday, says Tasnim News Agency.
According to the news agency, work on the construction of Iranian part of a gas pipeline to Iraq has witnessed a 75 percent progress, Alireza Gharibi, managing director of the company, said.
Upon completion Iran can export five million cubic meters of natural gas to Iraq in the first phase, Gharibi said. He added that the export volume could rise to 10 mcm in the subsequent stages.
The project is aimed at supplying Al-Baghdad and Al-Mansouriyah power plants with natural gas.
Iran says the new exports will earn the country nearly $3.7bln a year, adds Tasnim News Agency.
* Crude stocks drop on lower imports
* Refined fuel stocks down after 3-mth buildup (Adds detail)
(Reuters) - China's commercial crude oil inventories at the end of March fell 2.89 percent from a month earlier on lower crude imports, the official Xinhua news agency said on Wednesday.
Commercial refined fuel stocks dropped 2.05 percent from end-February after climbing for three months, Xinhua reported in its oil and gas newsletter China OGP.
Of the total, diesel stocks fell 5.66 percent as demand rebounded on the start of spring ploughing and infrastructure construction, while gasoline stocks gained 1.83 percent and kerosene stocks increased 4.53 percent, it said.
The OGP newsletter does not provide outright inventory volumes, and the government rarely discloses levels of either commercial or strategic oil stocks, making it difficult to gauge real demand in the world's second-largest oil consumer.
China's crude oil imports in March fell to a five-month low of 5.54 million barrels per day (bpd), official data has shown, after three months of high inbound shipments and gains in fuel product inventories.
On a daily basis, refinery crude throughput in March fell 5.7 percent from February as refineries scaled back production amid high product stocks.
(Reporting by Judy Hua and Chen Aizhu; Editing by Richard Pullin and Joseph Radford)
Kuwait's crude oil exports to China hits 2-year high
BEIJING, April 23 (KUNA) -- Kuwait's crude oil exports to China in March hit a two-year high of 1.25 million tons, equivalent to around 295,000 barrels per day (bpd), up 70.9 percent from a year earlier, official data showed.
The figure was the highest since March 2012, when Kuwait's crude shipments to the world's second-biggest energy consumer recorded 1.30 million tons (308,000 bpd), according to the General Administration of Customs.
China's overall imports of crude oil in March edged up 2.0 percent from year-on-year to 5.56 million bpd. Saudi Arabia remained country's top supplier, although its shipments plunged 25.5 percent to 779,000 bpd, followed by Angola with 732,000 bpd, down 9.3 percent.
Russia became third, with exports from the country surging 38.6 percent to 599,000 bpd. Iraq ranked fourth and Iran fifth, respectively.
China's net imports of petroleum and other liquids began exceeding those of the US since last September on a monthly basis, making it the largest net importer of crude oil and other liquids in the world, the US Energy Information Administration (EIA) said in a report late March.
"The rise in China's net imports of petroleum and other liquids is driven by steady economic growth, with rapidly rising Chinese petroleum demand outpacing production growth," the statistical agency within the Department of Energy said. The EIA also pointed out that China has been diversifying the sources of its crude oil imports in recent years as a result of robust oil demand growth and recent geopolitical uncertainties.
Saudi Arabia continues to be its largest supplier of crude oil, but "because production levels from Iran, Libya, and Sudan and South Sudan dropped since 2011, China replaced the lost shares of crude oil and other liquids imports from these countries with imports from Oman, Iraq, the United Arab Emirates, Angola, Venezuela, and Russia," it added. (end) mk.rk
By Bloomberg News Apr 23, 2014 12:07 PM GMT+0700
Gasoline and kerosene stockpiles in China, the world’s second-largest oil consumer, rose to the highest levels in at least four years even as exports of the fuels surged last month.
Gasoline inventories increased by 1.8 percent in March from a month earlier while kerosene supplies gained 4.5 percent, China Oil, Gas & Petrochemicals, a newsletter published by the official Xinhua News Agency, said today. Stockpiles expanded to an estimated 7.48 million metric tons and 1.87 million, respectively, the highest since January 2010 when Bloomberg started compiling the data.
Fuel supplies climbed as refiners boosted operating rates, according to OGP. Companies including China Petrochemical & Chemical Corp. and PetroChina Co. processed 41.9 million tons of crude last month, or about 9.9 million barrels a day, up 2.6 percent from a year ago, data from the National Bureau of Statistics in Beijing showed on April 16. China exported the most gasoline in more than three years in March and shipped the second-highest volume of jet fuel, the General Administration of Customs reported this week.
Diesel stockpiles dropped 5.7 percent last month while commercially held crude inventories fell 2.9 percent, according to OGP. The newsletter stopped reporting volumes in July 2010.
To contact Bloomberg News staff for this story: Jing Yang in Shanghai at jyang251@bloomberg.net
To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net Yee Kai Pin, Ramsey Al-Rikabi
The Netherlands could become a gas importer within the next decade, the International Energy Agency (IEA) said.
Following its latest in-depth review of Dutch energy policies, the IEA found gas production from the nation’s giant Groningen field is declining and outlook for domestic unconventional gas “remains uncertain”. As a result, the Netherlands is expected to shift from a net exporter to a net importer of gas by 2025.
The nation also lags behind its national target for renewable energy sources, with the share of renewables in the final energy consumption since 2005 increasing from 2.3% to just 4.5% in 2013 – still far from its ambitious target of 14% by 2020, according to the report.
While the IEA commends the nation’s renewed focus on energy efficiency and investment in energy infrastructure, the Netherlands remains one of the most fossil fuel intensive economies among IEA member countries and is being urged to step up its decarbonisation efforts.
he report found the share of fossil fuels in the energy mix in the Netherlands is above 90% – linked to its use in industries, including petrochemical, iron and steel and agriculture.
Maria van der Hoeven, IEA Executive Director said: “Promoting lower-carbon energy use, especially in industry and transport, makes economic sense and can improve both sustainability and competitiveness.”
The IEA is calling on the Government of the Netherlands to develop a longer term, consistent energy policy framework for 2030 and investing in energy efficient building and promoting it in industry and the heat sector.
It also suggests the nation to continue to “actively engage” with North-West European electricity and gas markets and across the EU on sustainable energy supply.
By Joao Peixe | Wed, 23 April 2014 19:18 | 0
The Alaskan State Legislature passed legislation on April 20 that will see the state join a partnership with oil producers on the North Slope to build a pipeline and liquefied natural gas export terminal.
If successful, it will mark the first time a U.S. state has taken such an active role in an oil and gas project.
Plans involve the construction of an 800-mile pipeline that will connect gas fields to an LNG export facility. A 42-inch pipeline will be used that will allow enough gas to both meet the state’s needs and allow for some to be exported.
The state will invest in 25 percent of the project, according to Joe Balash, commissioner of Alaska’s Department of Natural Resources Juneau will receive its royalty “in kind,” meaning that it will take natural gas instead of cash revenue.
Republican Governor Sean Parnell, who is expected to sign the bill, called it an “historic moment for Alaskans.”
“By passing Senate Bill 138, the legislature has put Alaska on a path to controlling her own destiny by becoming an owner in the Alaska LNG Project,” he said in a statement. “Alaskans have waited a long time for a gas line, and for the first time in our history, we have alignment, authorization from the legislature and a clear path forward. The Alaska LNG Project has begun.”
Construction will not begin immediately on the pipeline, which comes with a steep price tag estimated at between $45 and $65 billion. More studies are planned to refine costs and finalize engineering details.
The project is not expected to come online until 2024 at the earliest, at which point it is expected to be able to produce 16 million to 18 million tonnes of LNG per year.
Private companies involved in the project include BP, ConocoPhillips, ExxonMobil and TransCanada.
By Joao Peixe of Oilprice.com
By Charles Kennedy | Wed, 23 April 2014 19:35 | 0
The U.S. Department of Energy plans to work with private U.S. companies to help Ukraine develop its shale gas resources. In an April 22 interview with the Christian Science Monitor, DOE Secretary Ernest Moniz said, “[Ukrainians] do have a lot of gas potential that they are not developing, both conventional and unconventional. A lot of American companies – or companies operating in America – are where most of the expertise lies with regards to unconventional in particular.”
The same day, the White House outlined a new $50 million aid package to Ukraine during a visit to the country by Vice President Joseph Biden. “With the right investments and the right choices, Ukraine can reduce its energy dependence and increase its energy security,” Biden said at a press conference in Kiev, adding, “We will stand with you to help in every way we can for you to accomplish that goal.”
The aid package pushed by the White House will include visits in the near future to Ukraine by officials from U.S. government agencies intent on helping the country improve its energy security. The White House said the U.S. would help Ukraine obtain reverse flows of natural gas from European neighbors, such as Poland, Hungary and Slovakia, something that would protect Ukraine if Russia decides to turn off the taps.
In May, U.S. technical experts will travel to Ukraine along with officials from the European Bank for Reconstruction and Development to assist Kiev with boosting conventional oil and gas production from existing fields.
The U.S. will also send Department of Energy and USAID officials to assist with energy efficiency plans.
Ukraine heavily subsidizes the consumption of natural gas, and the White House said improved energy efficiency could “deliver potentially huge cost savings to Ukraine and rationalize energy consumption.”
Despite U.S. assistance, Ukraine is still at the mercy of Russia for its energy needs. Bloomberg Businessweek recently noted that the $50 million in U.S. aid pales in comparison to the debt Ukraine owes to Russia for natural gas.
By Charles Kennedy of Oilprice.com
By Daniel J. Graeber | Wed, 23 April 2014 21:14 | 0
Energy companies targeting inland shale basins in the United States are starting to reap the financial rewards of the North American production boom, with shares for big and marginal players alike posting huge gains.
Nabors Industries Ltd., which owns and operates the largest land-based drilling fleet in the world, said its first quarter performance was hit hard by the severe winter that gripped much of North America this year.
Chairman Tony Petrello, the company's president and chief executive officer, said operating income from its activity in the Lower 48 states was down slightly from what he said was a strong fourth quarter 2013, but "better than expected" given the number of weather-induced disruptions.
Shares in the company [NYSE: NBR] are up more than 65 percent since last year despite a rough first quarter. And it's outperforming some of its peers by at least 20 percent in terms of share price increases year-to-date.
The U.S. Energy Information Administration (EIA) said weather conditions in the Lower 48 left crude oil production flat in some of the richest shale basins in the country. In its short-term market report for April, EIA said it expected accelerated development in shale during the next few months, however.
Oil services company Baker Hughes said 8,853 wells were counted in its latest survey, a 3.7 percent increase from the same time last year. Parts of the Woodford shale formation in Oklahoma and the Williston Basin in the Northern Plains saw the most activity, with a combined 130 new wells since last year.
In its earnings report last week, Baker Hughes said [NYSE:BHI] its adjusted earnings per share increased 29 percent compared with the same quarter last year. Like Nabors, its share price is up more than 60 percent for the year.
EIA said it expects strong crude oil production from U.S. shale basins, primarily from southern plays and the northern plains area. Shale last year helped total U.S. output reach 7.4 million barrels per day, a number that should increase by another 1 million bpd this year. By next year, U.S. oil production is expected to reach 9.1 million bpd, just 500,000 bpd shy of the high-water mark set in the 1970s.
In the Bakken reserve area of North Dakota, oil consultant group Wood Mackenzie expects $15 billion in capital expenses during the first quarter alone. An overview of the energy sector shows a 9 percent increase in value year-on-year.
Given the rush to make up for a sluggish winter, the bulls will have their way with U.S. energy players.
By Daniel J. Graeber
By John Daly | Wed, 23 April 2014 21:00 | 1
Russia is changing its energy export policy vector as strong demand for hydrocarbons in both in China and in India continues to grow. The recent unease in both the U.S. and Europe over Russian President Vladimir Putin’s March 17 annexation of Crimea has only added to Moscow’s efforts to diversify its markets beyond Europe.
Now Russia and India are planning to construct a $30 billion oil pipeline through China’s restive Xinjiang province. If successful, the pipeline will be the most expensive in the world.
The groundwork for the project was laid on October 21, 2013, during Indian Prime Minister Manmohan Singh’s visit to Moscow for the 14th India-Russia Annual Summit. Singh and Putin issued a joint statement that said, “Russia and India have agreed to establish a joint group to study the possibility of direct ground transportation of hydrocarbons.”
That announcement reaffirmed the two countries’ joint commitment to implement the Agreement between the Government of the Russian Federation and the Government of the Republic of India on the Enhancement of Cooperation in Oil and Gas Sector, which was concluded on December 21, 2010.
The project has been on the drawing boards for nearly a decade, as Russia and India first began discussing it in 2005.
Four years later, in 2009, the foreign ministers of Russia, India and China agreed to enhance energy cooperation. Sergei Lavrov, S.M. Krishna and Yang Jiechi met in Bangalore to discuss energy security, the fight against terrorism and climate change. In a joint declaration, the diplomats said, “India, Russia and China are seeking to intensify international energy cooperation on a new basis to help make the energy market more open, transparent and competitive and reflect the common interests of all the parties involved.”
At the end of last year, India's biggest oil and gas company, Oil and Natural Gas Corp. (ONGC) confirmed its interest in the pipeline project, saying, “The pipeline from Russia seems appropriate. The details of the project will be clarified with the Russian partners.”
India currently buys very little crude oil from Russia. According to the Indian Embassy in Moscow, fuel and oil imports from Russia in 2012 were only $176 million even as bilateral trade increased by 24.5 percent to $11 billion. Indian exports accounted for $3 billion while Russian exports, primarily weaponry, were valued at $8 billion.
Political support in Russia for the Xinjiang pipeline project has increased in the wake of worsening relations with the U.S. and EU over Crimea. On February 26, Russian Deputy Prime Minister Dmitry Rogozin observed, “This is one of the major infrastructure projects that can be implemented.” But he also added, “I think it has a right to exist, but we should make calculations to see how profitable it can be.”
The pipeline also has political support in China. China’s Center for Strategic Studies in Energy Director Xia Yishan recently said, “The project is beneficial for both India and China, as it would allow China to become an oil transit in addition to its ‘status’ of recipient of the Russian oil.”
The pipeline project will strengthen India’s intention to become a member of the Shanghai Cooperation Organization (SCO), of which Russia and China are charter members.
The pipeline still faces substantial impediments, aside from its astronomical price tag. Up to 35 percent of its route runs through mountainous terrain, a factor that has set back completion schedules to 2020-2022.
Any pipeline to India through China would also become subject to the two states’ complex relationship, which is fraught with border disputes and mutual suspicion.
As Russian Center for Current Politics expert Dmitry Abzalov observed, “If a significant portion of the pipeline passes through the Middle Kingdom, there is a risk that it could be used to exert pressure on India.”
But evolving political relations may yet hasten the pipeline’s development. Russia is seeking to broaden its energy markets, India remains a major energy exporter, and China would strengthen its relations with both countries should the pipeline be built. While the last couple of years have seen major pipeline projects such as Nabucco abandoned, rising political and security considerations in this case may trump costs and end up propelling the project forward.
By John Daly of Oilprice.com
New York - April 23, 2014
U.S. commercial crude oil stocks rose 3.52 million barrels to 397.66 million barrels during the reporting week ended April 18, U.S. Energy Information Administration (EIA) oil data showed Wednesday.
The build was in line with analysts' expectations. Analysts polled Monday had been looking for a 3.1 million-barrel build.
The bulk of the build was concentrated in the U.S. Gulf Coast (USGC) region, where stocks rose 2.44 million barrels to set yet another record high of 209.61 million barrels.
This build puts USGC crude oil stocks just over 13% above the five-year average of EIA data.
Amid a modest increase in imports -- up just 16,000 barrels per day (b/d) to 3.83 million b/d -- the build was tempered by sharply higher crude oil runs at USGC refineries.
USGC runs rallied 372,000 b/d to 8.51 million b/d – the highest since the 8.55 million b/d for the week ended December 27. This helped to push USGC utilization rates 4.2 percentage points higher to 94.1% of capacity.
The gains suggest the region has largely exited spring maintenance.
Total U.S. refinery utilization rates rose 2.2 percentage points to 91% of capacity. Analysts had been looking for this to remain flat.
Meanwhile, utilization rates on the U.S. Atlantic Coast (USAC) rose 5.4 percentage points to 84.6% of capacity amid a 71,000 b/d surge in crude oil runs.
However, this barely made a dent in crude oil stocks, which rallied 2.24 million barrels to 14.05 million barrels. This is likely attributable to a 296,000 b/d jump in imports, which rose to 878,000 b/d.
This comes in somewhat below the 409,000 b/d increase shown in American Petroleum Institute (API) data released late Tuesday. However, the increase is notable considering that refiners in the region had been backing out imports in favor of Bakken crude oil railed in from North Dakota.
USAC imports hit an all-time low of 422,000 b/d during the reporting week ended November 15, 2013. According to the EIA's data, the last time USAC imports topped 1 million b/d was in September 2013.
The jump in imports could be a one-off event or could be related to the recent tightening of the Brent-WTI spread, which helped push the cost of delivered Bakken to the USAC above the delivered cost of some North Sea and West African crude oils.
The front-month, May, Brent-WTI spread narrowed to a near seven-month low of $3.27 per barrel on April 14.
Imports from Nigeria, many of which traditionally head to the USAC, rose 115,000 b/d the week ended April 18 to 219,000 b/d. This is the highest Nigerian imports have been since late October. Angolan imports also rose, up 67,000 b/d to 117,000 b/d.
U.S. Midwest crude oil stocks fell 1.73 million barrels to 95.62 million barrels, EIA data showed. Of that, stocks at New York Mercantile Exchange (NYMEX) delivery hub Cushing, Oklahoma, fell 788,000 barrels to 26.04 million barrels. This puts Cushing stocks almost 34% below their five-year average.
U.S. GASOLINE STOCKS DRAW
U.S. gasoline stocks fell 274,000 barrels to just over 210 million barrels the week ended April 18, putting them 2.5% below the five-year average.
Analysts had been looking for a 1.7 million-barrel draw.
Stocks on the USAC -- home to the New York Harbor-delivered NYMEX RBOB contract -- fell 99,000 barrels to 54.06 million barrels.
Gasoline production fell 48,000 b/d to 8.89 million b/d, while implied demand* for the fuel dropped 186,000 b/d to 8.43 million b/d.
Imports to the USAC came off slightly, down 63,000 b/d to 402,000 b/d.
U.S. distillate stocks rose 597,000 barrels to 112.51 million barrels the week ended April 18, counter to analysts' expectations of a 900,000-barrel draw.
Implied demand dropped 331,000 b/d to 3.83 million b/d, while production rose 100,000 b/d to 4.98 million b/d.
USGC ultra-low sulfur diesel stocks, meanwhile, rose 1.36 million barrels to 30.84 million barrels.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
Commercial stocks rose 3.5 million barrels to 397.7 million barrels for the week ended April 18, according to US Energy Information Administration data released Wednesday - PHOTO: AFP
[NEW YORK] US commercial oil stockpiles hit a new record last week on the strength of continued growth in oil and gas production in the world's biggest oil-consuming country.
Commercial stocks rose 3.5 million barrels to 397.7 million barrels for the week ended April 18, according to US Energy Information Administration data released Wednesday.
That is the highest level of inventories since the EIA began releasing weekly data in 1982. It is highest level of commercial stocks since 1931, according to monthly data kept by the agency.
"It's a real renaissance for the US oil production industry," said John Kilduff, founding partner at Again Capital.
Domestic oil production has risen to 8.4 million barrels per day compared with 7.3 million a year ago, driven by new production from oil shale deposits.
Mr Kilduff said infrastructure for storing crude in the US Gulf Coast refining and distribution hub is nearing capacity.
"We're approaching capacity and it should at some point reverberate through the international market," Mr Kilduff said.
If the Gulf Coast reaches the limit of its storage capacity, that would prevent the US from accepting additional imports. As a result, crude shipments could be displaced onto the international market, likely resulting in lower oil prices, Mr Kilduff said.
He said the lofty state of US stockpiles was offset by declining inventories in the closely-watched Cushing, Oklahoma hub.
He also cited the unpredictability of key international suppliers, such as Libya, as a bullish factor for oil prices.- AFP
By Christine Harvey Apr 24, 2014 3:48 AM GMT+0700 0 Comments Email Print
U.S. East Coast gasoline rose to a five-month high as imports to the area declined and refinery maintenance continued in eastern Canada and New Jersey.
Reformulated, 84-octane gasoline, or RBOB, in the New York Harbor strengthened 0.88 cent to 3.88 cents a gallon above futures on the New York Mercantile Exchange at 3:16 p.m., the highest premium since Nov. 15, according to data compiled by Bloomberg.
New York’s gasoline premium swelled for a fourth day. Motor fuel imports to the East Coast dropped 63,000 barrels a day to 402,000 barrels in the week ended April 18, the lowest level since March 14, according to weekly U.S. Energy Information Administration data. Stockpiles of RBOB gasoline fell to 15.8 million barrels, compared with 21 million barrels a year earlier, the data showed.
“Imports to New York are limited and there are very few vessels arriving in the near term,” said Tom Finlon, director of Energy Analytics Group Ltd. “There are some signs chartering will pick up next week but supply should stay limited for at least a week or two.”
Irving Oil’s Saint John, New Brunswick, refinery, which sends over half of its products to the U.S. Northeast, expects to complete maintenance this week, while work continues at Valero Energy Corp. (VLO)’s Quebec City site and Suncor Energy Inc.’s Montreal plant. PBF Energy Inc.’s Paulsboro, New Jersey, refinery conducted maintenance on a crude unit.
U.S. demand for gasoline in the four weeks to April 18 averaged 8.7 million barrels a day, a two-year seasonal high, according to EIA data.
The 3-2-1 crack spread in New York, a rough estimate of refining margins based on European benchmark Brent oil, increased 20 cents to $20.37 a barrel, the strongest since July, according to data compiled by Bloomberg.
To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net
To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Richard Stubbe, Margot Habiby
By Anthony DiPaola Apr 23, 2014 6:47 PM GMT+0700 0 Comments Email Print
Abu Dhabi’s state oil producer is almost finished reviewing technical aspects of international companies’ bids to develop the biggest onshore crude deposits in the emirate, two people with knowledge of the situation said.
Evaluating expansion plans and output targets proposed by 11 companies from the U.S., Europe and Asia seeking the concessions may take about two weeks more, said the people, who asked not to be identified since the process is confidential. Picking the best commercial terms among the offers, including how much companies would like to be paid for the work, should be finished this year, they said.
Abu Dhabi, capital of the United Arab Emirates and holder of most of the country’s crude reserves, is seeking new partners to help expand oil output. Exxon Mobil Corp., BP Plc, Royal Dutch Shell Plc and Total SA in January lost rights as partners in the company operating Abu Dhabi’s onshore fields when their joint venture agreement expired after seven decades.
“We have a process and that process is ongoing,” Abdulla Nasser Al Suwaidi, director general of Abu Dhabi National Oil Co., said on the sidelines a company event yesterday when asked about progress in the bidding. “There is no timetable” for naming winners, he said.
Abu Dhabi pumped 2.7 million barrels a day in March, or about 10 percent of all oil supplied by the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg.
The four former partners have contracts allowing them to continue buying Abu Dhabi crude oil for a six-month period from the end of the concession in January, according to Al Suwaidi. “We will see after that, subject to negotiation,” whether the contracts will be extended, he said. The companies had access to crude supply as shareholders in the deposits.
BP, Exxon, Shell, Total and seven others picked by Adnoc were invited to submit bids for the fields by October. Adnoc is reviewing the offers before submitting its recommendations to the Supreme Petroleum Council, Abu Dhabi’s top energy policy body, for a final decision on who the new partners will be.
To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net John Deane
By Mark Shenk Apr 24, 2014 2:54 AM GMT+0700 5 Comments Email Print
The U.S. is stockpiling the most crude since the Great Depression, thanks to the shale boom that has boosted production to the most in 26 years.
Inventories rose 3.52 million barrels last week to 397.7 million, the highest level since 1931, according to Energy Information Administration data going back to 1920. Crude output climbed 59,000 barrels a day to 8.36 million, the most since January 1988, as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas.
The burgeoning supply has sparked arguments over whether a 1975 law that prevents most U.S. crude exports should be repealed. It also may reduce the impetus for a quick approval of the Keystone XL pipeline moving Canadian crude to the U.S. Average weekly imports are down 3.7 percent so far this year, compared with the same period in 2013.
“This paints a secure supply picture for the U.S.,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “This will add to the political debate about exports and Keystone. Whatever issues arise, it’s important to remember you would rather deal with the problems of a supply glut rather than a dearth.”
Keystone XL
President Barack Obama’s administration said on April 18 that it will postpone a ruling on Keystone XL. The State Department said it wouldn’t make a recommendation until questions are resolved about the way the pipeline’s northern route through Nebraska was approved. The southern portion of the project began moving crude in January to the Texas Gulf Coast from Cushing, Oklahoma.
Inventories along the Gulf Coast, known as PADD 3, rose 2.44 million barrels to 209.6 million last week, the most in EIA data going back to 1990.
Much of that inventory is light, sweet crude, or oil with low density and sulfur content, from the shale fields. Many refineries along the Gulf Coast are designed to run most efficiently on cheaper heavy, sour barrels imported from Mexico and Venezuela.
“The problem is that we have a glut of light, sweet crude when what we need is sour,” Schork said. “There have to find a way to swap the barrels we’ve got in hand or exporting them, so we can take full advantage of the rise in output.”
Energy Independence
Harold Hamm, the chairman and chief executive officer of Continental Resources Inc. (CLR), who became a billionaire drilling in North Dakota, told U.S. lawmakers Jan. 30 that the country, which EIA data show supplied 86 percent of its own energy last year, can drill its way to full independence by 2020. Hamm is leading an effort to get Congress to allow crude exports for the first time since the 1970s.
Senator Lisa Murkowski of Alaska, the senior Republican on the Energy and Natural Resources Committee, said in a Jan. 7 speech that she also supports changing the export rules.
The federal Jones Act restricts domestic seaborne trade to vessels owned, flagged and built in the U.S. and crewed by citizens. Thirteen tankers can haul crude domestically out of a global fleet of about 2,400, according to the U.S. Transportation Department’s Maritime Administration. The Jones Act is a 94-year-old law.
WTI Slips
West Texas Intermediate crude for June delivery slipped 31 cents, or 0.3 percent, to settle at $101.44 a barrel on the New York Mercantile Exchange. Futures ended trading at $104.37 a barrel on April 21, the second-highest level of 2014.
The U.S. inventory level was the highest in EIA weekly data begun in 1982 and monthly government data going back to 1920. Reports before 1976 were based on data from the Bureau of Mines, according to the EIA, and stockpiles of Alaskan crude oil in transit were included starting in 1981.
Imports decreased 475,000 barrels a day to 7.8 million in the seven days ended April 18. Arrivals have averaged 7.46 million barrels in 2014, according to EIA figures, down from 7.74 million for the first 16 weeks of 2013.
“Imports remain strong,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’ve yet to waive off imports but may be nearing a breaking point because of swollen supplies along the Gulf Coast. When that occurs, there will be a major rebalancing of global markets.”
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net Philip Revzin, Richard Stubbe
Iranian natural gas supplies to Iraq is expected to commence in another four months, Iran’s Gas Engineering and Development Company announced on Tuesday, says Tasnim News Agency.
According to the news agency, work on the construction of Iranian part of a gas pipeline to Iraq has witnessed a 75 percent progress, Alireza Gharibi, managing director of the company, said.
Upon completion Iran can export five million cubic meters of natural gas to Iraq in the first phase, Gharibi said. He added that the export volume could rise to 10 mcm in the subsequent stages.
The project is aimed at supplying Al-Baghdad and Al-Mansouriyah power plants with natural gas.
Iran says the new exports will earn the country nearly $3.7bln a year, adds Tasnim News Agency.
* Crude stocks drop on lower imports
* Refined fuel stocks down after 3-mth buildup (Adds detail)
(Reuters) - China's commercial crude oil inventories at the end of March fell 2.89 percent from a month earlier on lower crude imports, the official Xinhua news agency said on Wednesday.
Commercial refined fuel stocks dropped 2.05 percent from end-February after climbing for three months, Xinhua reported in its oil and gas newsletter China OGP.
Of the total, diesel stocks fell 5.66 percent as demand rebounded on the start of spring ploughing and infrastructure construction, while gasoline stocks gained 1.83 percent and kerosene stocks increased 4.53 percent, it said.
The OGP newsletter does not provide outright inventory volumes, and the government rarely discloses levels of either commercial or strategic oil stocks, making it difficult to gauge real demand in the world's second-largest oil consumer.
China's crude oil imports in March fell to a five-month low of 5.54 million barrels per day (bpd), official data has shown, after three months of high inbound shipments and gains in fuel product inventories.
On a daily basis, refinery crude throughput in March fell 5.7 percent from February as refineries scaled back production amid high product stocks.
(Reporting by Judy Hua and Chen Aizhu; Editing by Richard Pullin and Joseph Radford)
Kuwait's crude oil exports to China hits 2-year high
BEIJING, April 23 (KUNA) -- Kuwait's crude oil exports to China in March hit a two-year high of 1.25 million tons, equivalent to around 295,000 barrels per day (bpd), up 70.9 percent from a year earlier, official data showed.
The figure was the highest since March 2012, when Kuwait's crude shipments to the world's second-biggest energy consumer recorded 1.30 million tons (308,000 bpd), according to the General Administration of Customs.
China's overall imports of crude oil in March edged up 2.0 percent from year-on-year to 5.56 million bpd. Saudi Arabia remained country's top supplier, although its shipments plunged 25.5 percent to 779,000 bpd, followed by Angola with 732,000 bpd, down 9.3 percent.
Russia became third, with exports from the country surging 38.6 percent to 599,000 bpd. Iraq ranked fourth and Iran fifth, respectively.
China's net imports of petroleum and other liquids began exceeding those of the US since last September on a monthly basis, making it the largest net importer of crude oil and other liquids in the world, the US Energy Information Administration (EIA) said in a report late March.
"The rise in China's net imports of petroleum and other liquids is driven by steady economic growth, with rapidly rising Chinese petroleum demand outpacing production growth," the statistical agency within the Department of Energy said. The EIA also pointed out that China has been diversifying the sources of its crude oil imports in recent years as a result of robust oil demand growth and recent geopolitical uncertainties.
Saudi Arabia continues to be its largest supplier of crude oil, but "because production levels from Iran, Libya, and Sudan and South Sudan dropped since 2011, China replaced the lost shares of crude oil and other liquids imports from these countries with imports from Oman, Iraq, the United Arab Emirates, Angola, Venezuela, and Russia," it added. (end) mk.rk
By Bloomberg News Apr 23, 2014 12:07 PM GMT+0700
Gasoline and kerosene stockpiles in China, the world’s second-largest oil consumer, rose to the highest levels in at least four years even as exports of the fuels surged last month.
Gasoline inventories increased by 1.8 percent in March from a month earlier while kerosene supplies gained 4.5 percent, China Oil, Gas & Petrochemicals, a newsletter published by the official Xinhua News Agency, said today. Stockpiles expanded to an estimated 7.48 million metric tons and 1.87 million, respectively, the highest since January 2010 when Bloomberg started compiling the data.
Fuel supplies climbed as refiners boosted operating rates, according to OGP. Companies including China Petrochemical & Chemical Corp. and PetroChina Co. processed 41.9 million tons of crude last month, or about 9.9 million barrels a day, up 2.6 percent from a year ago, data from the National Bureau of Statistics in Beijing showed on April 16. China exported the most gasoline in more than three years in March and shipped the second-highest volume of jet fuel, the General Administration of Customs reported this week.
Diesel stockpiles dropped 5.7 percent last month while commercially held crude inventories fell 2.9 percent, according to OGP. The newsletter stopped reporting volumes in July 2010.
To contact Bloomberg News staff for this story: Jing Yang in Shanghai at jyang251@bloomberg.net
To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net Yee Kai Pin, Ramsey Al-Rikabi
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The Netherlands could become a gas importer within the next decade, the International Energy Agency (IEA) said.
Following its latest in-depth review of Dutch energy policies, the IEA found gas production from the nation’s giant Groningen field is declining and outlook for domestic unconventional gas “remains uncertain”. As a result, the Netherlands is expected to shift from a net exporter to a net importer of gas by 2025.
The nation also lags behind its national target for renewable energy sources, with the share of renewables in the final energy consumption since 2005 increasing from 2.3% to just 4.5% in 2013 – still far from its ambitious target of 14% by 2020, according to the report.
While the IEA commends the nation’s renewed focus on energy efficiency and investment in energy infrastructure, the Netherlands remains one of the most fossil fuel intensive economies among IEA member countries and is being urged to step up its decarbonisation efforts.
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he report found the share of fossil fuels in the energy mix in the Netherlands is above 90% – linked to its use in industries, including petrochemical, iron and steel and agriculture.
Maria van der Hoeven, IEA Executive Director said: “Promoting lower-carbon energy use, especially in industry and transport, makes economic sense and can improve both sustainability and competitiveness.”
The IEA is calling on the Government of the Netherlands to develop a longer term, consistent energy policy framework for 2030 and investing in energy efficient building and promoting it in industry and the heat sector.
It also suggests the nation to continue to “actively engage” with North-West European electricity and gas markets and across the EU on sustainable energy supply.
By Joao Peixe | Wed, 23 April 2014 19:18 | 0
The Alaskan State Legislature passed legislation on April 20 that will see the state join a partnership with oil producers on the North Slope to build a pipeline and liquefied natural gas export terminal.
If successful, it will mark the first time a U.S. state has taken such an active role in an oil and gas project.
Plans involve the construction of an 800-mile pipeline that will connect gas fields to an LNG export facility. A 42-inch pipeline will be used that will allow enough gas to both meet the state’s needs and allow for some to be exported.
The state will invest in 25 percent of the project, according to Joe Balash, commissioner of Alaska’s Department of Natural Resources Juneau will receive its royalty “in kind,” meaning that it will take natural gas instead of cash revenue.
Republican Governor Sean Parnell, who is expected to sign the bill, called it an “historic moment for Alaskans.”
“By passing Senate Bill 138, the legislature has put Alaska on a path to controlling her own destiny by becoming an owner in the Alaska LNG Project,” he said in a statement. “Alaskans have waited a long time for a gas line, and for the first time in our history, we have alignment, authorization from the legislature and a clear path forward. The Alaska LNG Project has begun.”
Construction will not begin immediately on the pipeline, which comes with a steep price tag estimated at between $45 and $65 billion. More studies are planned to refine costs and finalize engineering details.
The project is not expected to come online until 2024 at the earliest, at which point it is expected to be able to produce 16 million to 18 million tonnes of LNG per year.
Private companies involved in the project include BP, ConocoPhillips, ExxonMobil and TransCanada.
By Joao Peixe of Oilprice.com
By Charles Kennedy | Wed, 23 April 2014 19:35 | 0
The U.S. Department of Energy plans to work with private U.S. companies to help Ukraine develop its shale gas resources. In an April 22 interview with the Christian Science Monitor, DOE Secretary Ernest Moniz said, “[Ukrainians] do have a lot of gas potential that they are not developing, both conventional and unconventional. A lot of American companies – or companies operating in America – are where most of the expertise lies with regards to unconventional in particular.”
The same day, the White House outlined a new $50 million aid package to Ukraine during a visit to the country by Vice President Joseph Biden. “With the right investments and the right choices, Ukraine can reduce its energy dependence and increase its energy security,” Biden said at a press conference in Kiev, adding, “We will stand with you to help in every way we can for you to accomplish that goal.”
The aid package pushed by the White House will include visits in the near future to Ukraine by officials from U.S. government agencies intent on helping the country improve its energy security. The White House said the U.S. would help Ukraine obtain reverse flows of natural gas from European neighbors, such as Poland, Hungary and Slovakia, something that would protect Ukraine if Russia decides to turn off the taps.
In May, U.S. technical experts will travel to Ukraine along with officials from the European Bank for Reconstruction and Development to assist Kiev with boosting conventional oil and gas production from existing fields.
The U.S. will also send Department of Energy and USAID officials to assist with energy efficiency plans.
Ukraine heavily subsidizes the consumption of natural gas, and the White House said improved energy efficiency could “deliver potentially huge cost savings to Ukraine and rationalize energy consumption.”
Despite U.S. assistance, Ukraine is still at the mercy of Russia for its energy needs. Bloomberg Businessweek recently noted that the $50 million in U.S. aid pales in comparison to the debt Ukraine owes to Russia for natural gas.
By Charles Kennedy of Oilprice.com
By Daniel J. Graeber | Wed, 23 April 2014 21:14 | 0
Energy companies targeting inland shale basins in the United States are starting to reap the financial rewards of the North American production boom, with shares for big and marginal players alike posting huge gains.
Nabors Industries Ltd., which owns and operates the largest land-based drilling fleet in the world, said its first quarter performance was hit hard by the severe winter that gripped much of North America this year.
Chairman Tony Petrello, the company's president and chief executive officer, said operating income from its activity in the Lower 48 states was down slightly from what he said was a strong fourth quarter 2013, but "better than expected" given the number of weather-induced disruptions.
Shares in the company [NYSE: NBR] are up more than 65 percent since last year despite a rough first quarter. And it's outperforming some of its peers by at least 20 percent in terms of share price increases year-to-date.
The U.S. Energy Information Administration (EIA) said weather conditions in the Lower 48 left crude oil production flat in some of the richest shale basins in the country. In its short-term market report for April, EIA said it expected accelerated development in shale during the next few months, however.
Oil services company Baker Hughes said 8,853 wells were counted in its latest survey, a 3.7 percent increase from the same time last year. Parts of the Woodford shale formation in Oklahoma and the Williston Basin in the Northern Plains saw the most activity, with a combined 130 new wells since last year.
In its earnings report last week, Baker Hughes said [NYSE:BHI] its adjusted earnings per share increased 29 percent compared with the same quarter last year. Like Nabors, its share price is up more than 60 percent for the year.
EIA said it expects strong crude oil production from U.S. shale basins, primarily from southern plays and the northern plains area. Shale last year helped total U.S. output reach 7.4 million barrels per day, a number that should increase by another 1 million bpd this year. By next year, U.S. oil production is expected to reach 9.1 million bpd, just 500,000 bpd shy of the high-water mark set in the 1970s.
In the Bakken reserve area of North Dakota, oil consultant group Wood Mackenzie expects $15 billion in capital expenses during the first quarter alone. An overview of the energy sector shows a 9 percent increase in value year-on-year.
Given the rush to make up for a sluggish winter, the bulls will have their way with U.S. energy players.
By Daniel J. Graeber
By John Daly | Wed, 23 April 2014 21:00 | 1
Russia is changing its energy export policy vector as strong demand for hydrocarbons in both in China and in India continues to grow. The recent unease in both the U.S. and Europe over Russian President Vladimir Putin’s March 17 annexation of Crimea has only added to Moscow’s efforts to diversify its markets beyond Europe.
Now Russia and India are planning to construct a $30 billion oil pipeline through China’s restive Xinjiang province. If successful, the pipeline will be the most expensive in the world.
The groundwork for the project was laid on October 21, 2013, during Indian Prime Minister Manmohan Singh’s visit to Moscow for the 14th India-Russia Annual Summit. Singh and Putin issued a joint statement that said, “Russia and India have agreed to establish a joint group to study the possibility of direct ground transportation of hydrocarbons.”
That announcement reaffirmed the two countries’ joint commitment to implement the Agreement between the Government of the Russian Federation and the Government of the Republic of India on the Enhancement of Cooperation in Oil and Gas Sector, which was concluded on December 21, 2010.
The project has been on the drawing boards for nearly a decade, as Russia and India first began discussing it in 2005.
Four years later, in 2009, the foreign ministers of Russia, India and China agreed to enhance energy cooperation. Sergei Lavrov, S.M. Krishna and Yang Jiechi met in Bangalore to discuss energy security, the fight against terrorism and climate change. In a joint declaration, the diplomats said, “India, Russia and China are seeking to intensify international energy cooperation on a new basis to help make the energy market more open, transparent and competitive and reflect the common interests of all the parties involved.”
At the end of last year, India's biggest oil and gas company, Oil and Natural Gas Corp. (ONGC) confirmed its interest in the pipeline project, saying, “The pipeline from Russia seems appropriate. The details of the project will be clarified with the Russian partners.”
India currently buys very little crude oil from Russia. According to the Indian Embassy in Moscow, fuel and oil imports from Russia in 2012 were only $176 million even as bilateral trade increased by 24.5 percent to $11 billion. Indian exports accounted for $3 billion while Russian exports, primarily weaponry, were valued at $8 billion.
Political support in Russia for the Xinjiang pipeline project has increased in the wake of worsening relations with the U.S. and EU over Crimea. On February 26, Russian Deputy Prime Minister Dmitry Rogozin observed, “This is one of the major infrastructure projects that can be implemented.” But he also added, “I think it has a right to exist, but we should make calculations to see how profitable it can be.”
The pipeline also has political support in China. China’s Center for Strategic Studies in Energy Director Xia Yishan recently said, “The project is beneficial for both India and China, as it would allow China to become an oil transit in addition to its ‘status’ of recipient of the Russian oil.”
The pipeline project will strengthen India’s intention to become a member of the Shanghai Cooperation Organization (SCO), of which Russia and China are charter members.
The pipeline still faces substantial impediments, aside from its astronomical price tag. Up to 35 percent of its route runs through mountainous terrain, a factor that has set back completion schedules to 2020-2022.
Any pipeline to India through China would also become subject to the two states’ complex relationship, which is fraught with border disputes and mutual suspicion.
As Russian Center for Current Politics expert Dmitry Abzalov observed, “If a significant portion of the pipeline passes through the Middle Kingdom, there is a risk that it could be used to exert pressure on India.”
But evolving political relations may yet hasten the pipeline’s development. Russia is seeking to broaden its energy markets, India remains a major energy exporter, and China would strengthen its relations with both countries should the pipeline be built. While the last couple of years have seen major pipeline projects such as Nabucco abandoned, rising political and security considerations in this case may trump costs and end up propelling the project forward.
By John Daly of Oilprice.com
New York - April 23, 2014
U.S. commercial crude oil stocks rose 3.52 million barrels to 397.66 million barrels during the reporting week ended April 18, U.S. Energy Information Administration (EIA) oil data showed Wednesday.
The build was in line with analysts' expectations. Analysts polled Monday had been looking for a 3.1 million-barrel build.
The bulk of the build was concentrated in the U.S. Gulf Coast (USGC) region, where stocks rose 2.44 million barrels to set yet another record high of 209.61 million barrels.
This build puts USGC crude oil stocks just over 13% above the five-year average of EIA data.
Amid a modest increase in imports -- up just 16,000 barrels per day (b/d) to 3.83 million b/d -- the build was tempered by sharply higher crude oil runs at USGC refineries.
USGC runs rallied 372,000 b/d to 8.51 million b/d – the highest since the 8.55 million b/d for the week ended December 27. This helped to push USGC utilization rates 4.2 percentage points higher to 94.1% of capacity.
The gains suggest the region has largely exited spring maintenance.
Total U.S. refinery utilization rates rose 2.2 percentage points to 91% of capacity. Analysts had been looking for this to remain flat.
Meanwhile, utilization rates on the U.S. Atlantic Coast (USAC) rose 5.4 percentage points to 84.6% of capacity amid a 71,000 b/d surge in crude oil runs.
However, this barely made a dent in crude oil stocks, which rallied 2.24 million barrels to 14.05 million barrels. This is likely attributable to a 296,000 b/d jump in imports, which rose to 878,000 b/d.
This comes in somewhat below the 409,000 b/d increase shown in American Petroleum Institute (API) data released late Tuesday. However, the increase is notable considering that refiners in the region had been backing out imports in favor of Bakken crude oil railed in from North Dakota.
USAC imports hit an all-time low of 422,000 b/d during the reporting week ended November 15, 2013. According to the EIA's data, the last time USAC imports topped 1 million b/d was in September 2013.
The jump in imports could be a one-off event or could be related to the recent tightening of the Brent-WTI spread, which helped push the cost of delivered Bakken to the USAC above the delivered cost of some North Sea and West African crude oils.
The front-month, May, Brent-WTI spread narrowed to a near seven-month low of $3.27 per barrel on April 14.
Imports from Nigeria, many of which traditionally head to the USAC, rose 115,000 b/d the week ended April 18 to 219,000 b/d. This is the highest Nigerian imports have been since late October. Angolan imports also rose, up 67,000 b/d to 117,000 b/d.
U.S. Midwest crude oil stocks fell 1.73 million barrels to 95.62 million barrels, EIA data showed. Of that, stocks at New York Mercantile Exchange (NYMEX) delivery hub Cushing, Oklahoma, fell 788,000 barrels to 26.04 million barrels. This puts Cushing stocks almost 34% below their five-year average.
U.S. GASOLINE STOCKS DRAW
U.S. gasoline stocks fell 274,000 barrels to just over 210 million barrels the week ended April 18, putting them 2.5% below the five-year average.
Analysts had been looking for a 1.7 million-barrel draw.
Stocks on the USAC -- home to the New York Harbor-delivered NYMEX RBOB contract -- fell 99,000 barrels to 54.06 million barrels.
Gasoline production fell 48,000 b/d to 8.89 million b/d, while implied demand* for the fuel dropped 186,000 b/d to 8.43 million b/d.
Imports to the USAC came off slightly, down 63,000 b/d to 402,000 b/d.
U.S. distillate stocks rose 597,000 barrels to 112.51 million barrels the week ended April 18, counter to analysts' expectations of a 900,000-barrel draw.
Implied demand dropped 331,000 b/d to 3.83 million b/d, while production rose 100,000 b/d to 4.98 million b/d.
USGC ultra-low sulfur diesel stocks, meanwhile, rose 1.36 million barrels to 30.84 million barrels.
* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
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Commercial stocks rose 3.5 million barrels to 397.7 million barrels for the week ended April 18, according to US Energy Information Administration data released Wednesday - PHOTO: AFP
[NEW YORK] US commercial oil stockpiles hit a new record last week on the strength of continued growth in oil and gas production in the world's biggest oil-consuming country.
Commercial stocks rose 3.5 million barrels to 397.7 million barrels for the week ended April 18, according to US Energy Information Administration data released Wednesday.
That is the highest level of inventories since the EIA began releasing weekly data in 1982. It is highest level of commercial stocks since 1931, according to monthly data kept by the agency.
"It's a real renaissance for the US oil production industry," said John Kilduff, founding partner at Again Capital.
Domestic oil production has risen to 8.4 million barrels per day compared with 7.3 million a year ago, driven by new production from oil shale deposits.
Mr Kilduff said infrastructure for storing crude in the US Gulf Coast refining and distribution hub is nearing capacity.
"We're approaching capacity and it should at some point reverberate through the international market," Mr Kilduff said.
If the Gulf Coast reaches the limit of its storage capacity, that would prevent the US from accepting additional imports. As a result, crude shipments could be displaced onto the international market, likely resulting in lower oil prices, Mr Kilduff said.
He said the lofty state of US stockpiles was offset by declining inventories in the closely-watched Cushing, Oklahoma hub.
He also cited the unpredictability of key international suppliers, such as Libya, as a bullish factor for oil prices.- AFP
