Tag: tankers

Best in Energy – 15 December 2022

G7/Vietnam plan aims to avert big increase in coal

Germany spends heavily to offset energy shock

China’s coal output hit record high in November

China accumulates inventories of cheaper crude

U.S. cargo terminals sold to container lines ($WSJ)

Tanker rates rise on war, sanctions, longer routes

Drax coal-fired unit to start up in test run ($BBG)¹

Mekong hydro dams and sediment flow

U.S. refiners report higher profits

¹ Running a “test” of the cold-start process at Drax on December 16 just four days after the coal-fired power plant received instructions (subsequently cancelled) to light up and prepare to generate for “real” on December 12 to help with insufficient reserve margins is interesting timing.

U.S. DISTILLATE inventories increased by +1 million barrels to 120 million barrels over the seven days ending on December 9. Stocks are still -16 million barrels (-12%, -0.79 standard deviations) below the pre-pandemic five-year average, but the deficit has halved from -34 million barrels (-24%, -2.05 standard deviations) on October 7. The biggest seasonal inventory accumulation for at least two decades has erased a large part of the previous shortage:

Best in Energy – 24 November 2022

China’s coronavirus cases hit record high

Russia tanker fleet too small to avoid price cap

China/India slow purchases of Russian crude

United States to relax Venezuela oil sanctions

Europe hit by high gas prices for years ($FT)

BRENT’s six-month calendar spread fell to a backwardation of just over $2 per barrel on November 23, down from almost $9 a month earlier, and a high of almost $22 in early March, shortly after Russia invaded Ukraine. The spread has been easing consistently for a month and has fallen to its lowest level since December 2021. The business cycle downturn is expected to offset production restraint by OPEC⁺ and U.S. shale firms while traders anticipate Russia’s oil exports will continue flowing despite sanctions and the planned price cap:

Best in Energy – 31 May 2022

EU/Russia oil embargo agreed in principle

(see also press statement from the EU)

EU/Russia oil ban on seaborne imports ($FT)

(see also background on negotiations ($FT))

Global refiners cannot keep up with demand

India boosts discounted oil imports from Russia

Greece advises tankers to avoid Iran waters ($FT)

Russia/Ukraine war focuses on rail system ($WSJ)

China plans big increase in wind and solar (trans.)

BRENT spot prices and calendar spreads have surged as traders anticipate EU sanctions on Russia’s exports will increase the shortage of oil.  Both have returned to levels last seen in March in the immediate aftermath of Russia’s invasion of Ukraine. The six-month calendar spread is at a near-record backwardation of $16 per barrel, signalling inventories are expected to fall further in the rest of the year, leaving the market critically tight:

BRENT’s inter-month spreads for the rest of 2022 and 2023 have moved into an increasingly large backwardation over the last two months as the prospect of EU sanctions is expected to tighten the market and leave it short of both crude and fuels:

CHINA’s manufacturers reported a continued contraction in business activity in May but the downturn was less widespread than in April. The official purchasing managers’ index increased to 49.6 (10th percentile) up from 47.4 (1st percentile) the previous month:

CHINA’shydro-electric generation increased to a record 313 TWh in the first four months of the year, surpassing the previous peak of 299 TWh in 2019, and sharply reducing coal consumption:

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Best in Energy – 30 May 2022

Russia threat to respond to sanctions with output cuts

Global oil flows re-route around Russia sanctions

U.S. seasonal gasoline prices highest since 2012

EU struggles to agree Russia oil sanctions

India’s coal shortage to worsen

Iran seizes two oil tankers ($FT)

EUROPE’s gas storage is filling at the fastest rate on record, and now holds above-average volumes, as utilities try to accumulate inventories ahead of a possible shut off of imports from Russia next winter, and high prices attract heavy LNG inflows away from Asia while discouraging industrial consumption:

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