FSU Product Exports Rise in October
FSU product exports increased by almost 5% in October to 9.2m t, roughly 2.2m b/d, reports Petroleum Argus. The rise is due to higher fuel oil demand in Europe where fuel oil prices weakened after a prolonged period of oversupply. Shipments of fuel oil totalled 930k b/d, up by 14% mth-o-mth. However, gasoil shipments declined to 720k b/d, 18% lower mth-o-mth, because of high stocks of heating oil and fairly weak demand during a mild October. Gasoline exports were also down to 131k b/d, 2.2% lower mth-o-mth, due to enough supply at refineries in the west Mediterranean.
Russian Crude Oil Exports Fall in October
Russian exports of crude oil fell by 178,000 b/d in October to 3.7m b/d due to cooler weather, reports Energy Intelligence. Exports from Primorsk fell to 1.31m b/d, compared to 1.43m b/d in September, because of higher crude viscosity as a result of colder weather. Increased shipments from the Black Sea port of Yuzhny offset some of the above losses.
IEA lowers 2006 global oil demand forecast
In its November report, the International Energy Agency lowered its global oil demand growth forecast for 2006 to around +1.1% (or up 0.9m
b/d) compared with its previous estimate of 1.2% growth, making marginal downward adjustments to consumption in Asia. The group kept demand growth for 2007 unchanged at +1.7% or +1.45m b/d. Meanwhile, oil supply rose by 100k b/d in October, with OECD producers offsetting a near 300k b/d drop in total OPEC output. The IEA highlighted a build in total OECD industry oil stocks of 29m bbls in September, due to a rise in inventories in North America and the Pacific. However, weekly data for the US and Japan for October is showing an offsetting drawdown in product stocks.
US Trade Deficit
The US trade deficit fell 6.8% to $64.3 billion in September from a record $69 billion in August, reports Bloomberg. This represents the biggest drop in almost two years and is due to falling crude oil prices and higher demand for American goods from growing economies abroad. US exports increased to a record due to higher shipments of more business equipment. However, the trade deficit with China reached an all-time high of $23 billion as imports from China increased to a record $27.6 billion in September, while US exports to China declined.
BP halts oil flow to Supsa
BP said Thursday it has stopped pumping oil from Azerbaijan through the Baku-Supsa pipeline due to "anomolies" exposed on the pipeline, reported Itar-Tass. Oil exports from Supsa were halted as a result and current estimates are that the pipeline may be shut until the end of November.
Meanwhile, European gasoline stocks fell sharply in October, down 6.8% year-on year, due to refinery maintenance, data from Euroilstock showed, reported Reuters. European October refinery utilisation fell to 91% compared with 93% in September and 96.2% in October 2005. Distillate stocks were down 3.7% year-on-year.
Newcastle Vessel Queue Expected to Increase
The vessel queue at Newcastle has increased to 33 from 28 last week, McCloskey reports. According to the Hunter Valley Coal Chain, the queue is expected to exceed 50 this month, which, if realised, would represent the worst bottleneck at the port since 2004. The delays have been exacerbated by termination of coal railings from November 10-13 as a result of planned rail infrastructure work. This will coincide with the highest vessel arrival rate for 2006: total vessel nominations for this month are over 8.1 Mt, compared with an expected capacity of 6.2 Mt for the month. The SSY Australian Port Congestion Index, which takes into account delays at all coal ports in Australia, increased to 7.6 days this week, compared to 6.8 last week.
US Distillate Stocks Fall
US distillate stocks decreased by 2.7m bbl to 138.6m bbl last week as a result of lower refinery throughputs due to planned maintenance, but are still running 14.7% higher year-on-year, according to the latest data from the US Department of Energy. Refinery utilisation was at 88.1%, slightly down from 88.9% last week. Gasoline inventories were down marginally by 0.6m bbl to 204m bbl, 1.4% lower on the year as production declined to 8.7m b/d and as gasoline imports fell 228k b/d to 991m b/d. Meanwhile, US crude stocks increased by 0.4m bbl last week to 334.7m bbl, 4.1% higher year-on-year, and remain well above the upper end of the average range for this time of year. Crude oil imports, though, averaged 9.8m b/d, 306k b/d less than last week.
Japans Crude Imports Down 2% in Sep
Japans crude imports were down 2% year-on-year in September at 4.1m b/d due to lower refinery runs and heavy product inventories, reported Petroleum Intelligence. Japan reduced crude supplies from the UAE and Kuwait. Latest reports are that refinery throughputs in Japan continued to fall during October, according to Petroleum Argus, dipping to 3.5m b/d - with just 74% of capacity being utilized - the lowest monthly figure in 2 years.
Eurozone Economic Growth in 2006
Eurozone economic growth in 2006 has picked up and is now expected to reach 2.6%, compared to 1.4% in 2005, according to the latest figures from the European Commission. This is the fastest rate of expansion in the last six years. The growth is being supported by strong domestic demand, sustained global growth, and investment in particular. The commission also reported that the economy in the EU would expand by 2.8% this year from 1.7% in 2005.
Polish Coal Exports Expected to Decline in 2006
Polish coal exports are expected to fall by 2.6 Mt this year to about 16 Mt, compared with 18.6 Mt in 2005, reports Platts. The decline in exports is due to higher domestic demand, production problems at some mines and unattractive international coal prices. Some traditional customers of Polish coal have switched to other supplies such as Russian coal, however, Russian supplies remain tight and difficulties continue with the country's railways.
With coal shipments from Richards Bay Coal Terminal down to 5.6 Mt in October from 7.2 Mt in September due to problems with two of the terminal's four ship loaders, there have been increased opportunities for Indonesian coal in Europe (to the benefit of the backhaul market).
Another attack on an oil facility in Nigeria
An oil facility operated by Italian oil firm Agip in Tebidaba, Southern Nigeria, was attacked Monday, reports Reuters. The Tebidaba region supplies crude oil to the Brass tanker terminal, which exports about 200k b/d. This latest incident adds to violence in the world's eight largest exporter, which has cut output by 500k b/d since February.
Meanwhile, Shell and Chevron have restarted around 60k b/d of crude production in Nigeria, following a week-long occupation of three flow stations by Nigerian villagers, reports Argus. Due to security concerns, 477k b/d of Shell's western delta production and 98k b/d of Chevron's Niger delta output remains shut in. However, according to last week's news reports, exports of crude oil from Nigeria in December are expected to be 50k b/d more than in November, despite announced cuts of 100k b/d agreed in OPEC deal.
Rising Iron Ore Imports from Brazil Into Japan
Japanese iron ore imports for the first nine months of 2006 reached 100.0 Mt, up 0.8 Mt from the same period last year, according to trade data. While the total import volume has remained relatively constant compared with 2005, the first three quarters of this year have seen more shipments from Brazil (24.3 Mt, up 10% year-on-year). Australia remains by far the main importer into Japan with 61.0 Mt in the year to date (-2% YOY), with shipments from India accounting for 7.2 Mt (-13%).
World Oil Demand Rises 3.44m b/d In October
World oil demand reached 84.88m b/d in October, 3.44m b/d higher year-on-year with the US leading the growth with a 5.6% increase since October 2005, reports Energy Intelligence. According to their latest report, although a relatively low base for demand inflated the growth compared to both 2005 and 2004, falling oil prices may also have been fuelling consumption. Two-thirds of the growth came from industrialised OECD nations and one-third from developing non-OECD countries. In terms of oil supply, production was outstripping demand by 1.4m b/d in October with non-OPEC output rising 0.8m b/d month-on-month to 50.3m b/d. Meanwhile, OPEC members are preparing with varying degrees of commitment to implement 1 November production cuts, reports Energy Intelligence.
Richards Bay Throughput 5.6 Mt in October
Citing unofficial sources, McCloskey reports that coal exports from Richards Bay in October totalled 5.6 Mt compared with 7.2 Mt the month before. Despite shiploaders at two out of the terminal's four berths being taken out of service during the month after cracks were discovered in the apparatus, the terminal's output still exceeded the monthly average of around 5.2 Mt. The annualised total for 2006 is now 62.8 Mt compared with the 2005 throughput total of 69.6 Mt.
Iraq's Oil Exports To Rise in November
Iraq's oil exports are set to rise 51k b/d in November month-on-month to 1.6m b/d, with most of the additional cargoes going to Asia, reports Energy Intelligence Briefing. Around 700k b/d, or 44% of November Basrah exports, are scheduled to go to Asia, almost double October shipments to the region. 567k b/d, or 35%, are set for America, down from the 968k b/d, or 62% of total exports, that went to the Americas in October. Volumes to Europe are set to rise 107k b/d to 333k b/d during the month. All of the October exports were from southern Basrah oil fields as northern Kirkuk crude output has remained shut-in since early September as a result of insurgent activities.
Portuguese Coal Consumption in 2007
A Portuguese generator is to reduce coal consumption by 0.5 Mt in 2007 to 1.3 Mtpa, Platts reports. The reduction is due to a temporary shutdown of one power plant in the 1q07 and another in the 3q07 for the installation of equipment for flue gas desulfurisation. Coal consumption is expected to return to normal levels after the work is completed. Portugal sources coal from South Africa and, in particular, Colombia.
US Crude Stocks Grow, Gasoline and Distillate Fall
US crude stocks grew 1.91m bbl last week to 334.3m bbl taking them 4.7% higher year-on-year helped by a 599k b/d rise in imports to 10.1m b/d as unloadings resumed at Loop following bad weather the previous week, according to the latest data from the US Department of Energy. Gasoline inventories continued to fall by another 2.8m bbl to 204.6m bbl, 3.9% lower on the year, despite imports increasing 962m b/d to 1.22m b/d. Gasoline production recovered slightly to 8.8m b/d, while demand dipped 12k b/d to 9.5m b/d. Distillate stores dropped 2.7m bbl to 141.3m bbl but remained 16.8% higher than the same week last year. Imports were 24k b/d higher at 265k b/d but demand rose 311k b/d to 4.59m b/d, the highest seen since the week ending 16 Dec 2005. Refinery utilisation was up 2.7% at 88.9%.
UAE Cuts Oil Production
The United Arab Emirates has started to reduce its crude production by 100k b/d as part of OPEC's decision to cut 1.2m b/d, reports AFP. The UAE is ranked fourth within OPEC with an oil production quota of 2.44m b/d, and has proven reserves of 97.8 billion bbls of oil -- the fifth largest in the world.
Newcastle Vessel Queue Falls Below 30
According to McCloskey, the vessel queue at Newcastle has fallen to 28 this week compared with 32 a week ago. This has taken the estimated average waiting time for vessels to 11.6 days. Annualised port throughput now stands just over 80 Mt once more, with year-to-date exports of 66.25 Mt.
Japan's Crude Imports Fall in September
Japan imported 4.09m b/d of crude in September, down 2% year-on-year and 2.3% lower than August, according to preliminary data from the Ministry of Economy, Trade and Industry, reports Platt's. Imports from the Middle East accounted for 90.3% of Japan's total crude imports during September, 0.2% down on the year. Saudi Arabia remained the largest exporter to Japan, accounting for 29.5% of the country's total crude imports in September, but were 0.3% down on the year at 1.2m b/d. The United Arab Emirates provided 27.7% of the total, while levels from Iran rose 17.6% on the month to take their total contribution to 11.8%. Oman also saw its share of Japan's imports rise 184.4% since August to 94k b/d.
Japanese Industrial Production Slows In September
Japanese industrial production slowed 0.7% in September month-on-month due to a drop in exports, although levels remained 5.1% higher on the year, reports the BBC. The slowdown has been attributed to weaker demand for cars, auto parts and machines to produce semiconductors. The fall follows a 1.8% rise in output in August. The Ministry of Economy, Trade and Industry now expect output to fall 0.2% in October but then rise 0.5% in November. However, despite healthy economic conditions, oil demand growth in Japan is slowing, largely due to a switch to alternative energy sources, such as LPG.
Indonesia Not Cutting Oil Output
Indonesia, OPEC's second-smallest member in terms of output, will not cut its oil production despite the group's decision to reduce supplies, reports Reuters. Indonesia should cut 39k b/d of production after the OPEC decision. Indonesian crude oil output rose to 862.9k b/d in September from 860.5 b/d in August, helped by steady production at several wells. Levels had fallen in August, extending successive drops to the lowest level in over 3 decades.
New Export Tax on Chinese Steel Exports Announced
China is to impose an export tax on pig iron, steel billet and semi-finished steel products of 10%. The move will take effect from November 1, Metal Bulletin reports, with coking coal and coke exports taxed at 5%. The Ministry of Finance also announced that import taxes on steel scrap imports (presently 2%) were to be abolished, while import taxes on alumina and export taxes for a range of ferro-alloys, base and minor metals are to be added.
China's steel exports have continued to rise this year, reaching 34.7 Mt in the first nine months. This marks an increase of 12.9 Mt on the same period last year, with 3q06 exports of 14.5 Mt, a quarterly record. The US steel consultancy, World Steel Dynamics, comments that the export tax indicates that the China's government wishes to reduce the country's trade surplus, thereby diminishing the chances of anti-dumping measures from China's trade partners.
Australian Drought Prompts Lower Wheat Trade Projection from IGC
The International Grains Council has revised down its world wheat trade forecast for 2006/07 (July-June) in response the drought-hit Australian wheat crop. The IGC now expects Australian wheat exports of 13.5 Mt compared with its September projection of 17.0 Mt and the June forecast of 19.0 Mt. As a result, the IGC has lifted export projections for a number of producer countries by between 0.1 and 0.4 Mt individually. These include Argentina (+0.2 Mt to 8.7 Mt), Canada (+0.3 Mt to 20.0 Mt), Kazakhstan (+0.4 Mt to 5.1 Mt), Russia (+0.1 Mt to 7.9 Mt) and the US (+0.2 Mt to 26.2 Mt). However, the new IGC world trade projection for 2006/07 is now 109.6 Mt, as opposed to last month's forecast of 112.0 Mt and the 2005/06 estimate of 107.7 Mt. The IGC revision follows a downgraded projection for the Australian wheat crop by the Australian Wheat Board from 12-15 Mt to 9-11 Mt.
Saudi Arabia Protects Against Possible Oil Attack
Top world oil exporter Saudi Arabia has said it was taking measures to protect its oil and economic installations from a terrorist threat, reports Reuters. Western naval forces in the Gulf have been deployed to counter a possible seaborne threat to its Ras Tanura oil terminal. Ras Tanura, just north of the Saudi oil capital of Dhahran, is the worlds largest offshore oil loading facility with a capacity of 6m b/d, reports AP.