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Iraqi oil exports for Apr have been pencilled in at 45.2m bbl, or 1.51m b/d, up from the 1.32m b/d exported in March, reports Energy Intelligence Briefing. Around 667k b/d are heading to the US with the total trans-Atlantic flow reaching 867k b/d, up from 710k b/d in March. Approximately 330k b/d is destined for Europe, up from 258k b/d in Mar, while levels to Asia are expected to be 15k b/d lower than the previous month at 340k b/d. Oil exports were cut by 4m bbl to 41m bbl, or 1.32m b/d in March, down from 1.43m b/d in Feb, due to bad weather in the Persian Gulf forcing a 3 day closure of the Basrah Oil Terminal.

US gasoline stocks continued to fall by another 4.4m bbl to 211.8m bbl last week, the lowest since 13 Jan ’06, due to falling production and a 9k b/d rise in demand to 9.06m b/d, the latest data from the US Department of Energy shows. The fall came despite a 38k b/d rise in imports to nearly 1.1m b/d, the ninth consecutive week they have averaged over 1m b/d, just over 20% higher year-on-year. Crude inventories grew by another 2.1m bbl to 342.8m bbl, the highest since the week ending 9 Apr 1999. The rise came despite a 147k b/d drop in imports to 9.95m b/d due to refinery utilisation falling 1.1% to 85.9%. Distillate stocks fell 2.6m bbl to 121.6m bbl but remained 16.8% lower than the same week last year. The decline came regardless of an 87k b/d increase in imports to 309k b/d and a 39k b/d fall in demand to 4.03m b/d.

A sharp fall in tanker freight rates through March for some of the key routes is an indication that the tanker markets are starting to feel the effects of a growing fleet. In its latest edition of World Oil Tanker Trends, SSY examines the prospects for the tanker markets through the medium term, sector-by-sector, in view of the relatively firm demand-side fundamentals and heavy newbuilding delivery schedule ahead. In the Feature Article of the 'WOTT', SSY focuses on the role of India in its drive to become a product cargo hub. Heavy investment into the country's refinery sector over recent years has led India into becoming a net exporter of products and spot fixture analysis suggests a growth in the volume of cargoes moving West, thus adding some positive pressure to tonne-mile demand. To subscribe to the latest edition of SSY's World Oil Tanker Trends please contact our research departments in London or Singapore or click on the 'buy online' link on this website.

According to the latest data from Australia, delays are high at the country’s coal and iron ore ports. SSY calculates that average delays at iron ore ports are over 9 days, far above the average for 005 of 4.6 days. One of the contributing factors behind the congestion was the cyclones which hit Western Australia in the 1q06. According to the SSY Australian coal port congestion index, average
delays at coal are pitched at around 10 days, the highest seen for 8 months.

Product exports from the FSU fell month-on-month in March by 2.9% to 10.2m tonnes (roughly 2.4m b/d), reports Petroleum Argus. Gasoline exports were down around 40% at roughly 190k b/d on the back of lower US demand while gasoil exports dropped 11% to around 800k b/d as Russia began stockpiling ahead of the agricultural season, according to Argus. Fuel oil exports, though, rose by around 38% (to roughly 1.1m b/d) due to higher Russian production and a greater volume of
shipments to the Asia-Pacific.

According to McCloskey, Colombian coal exports for the months of January and February totalled 8.72 Mt, falling well below the 10.4 Mt target.

However, this did represent a 0.29 Mt increase year on year. The slow start to the year could be attributed to the seasonal poor weather, which often brings strong winds and heavy rainfall that can disrupt the supply chain.

Columbia has seen its coal export levels rise significantly in recent years. Steam coal exports rose from 51.2 Mt in 2004 to 54.6 Mt in 2005
an increase of 6.6%.

Angola overtook Saudi Arabia to become China’s top oil supplier in Feb by shipping 456k b/d, or 15% of China’s imports, in the first 2 months of the year, reports Bloomberg. This was more than OPEC’s top 2 exporters, Saudi Arabia and Iran, who supplied 445k b/d and 391k b/d respectively. West African producers Congo and Equatorial Guinea also made it into China’s 10 largest suppliers, providing 140k b/d and 133k b/d. China, where oil imports have tripled in 5 years, has agreed to lend Angola $3 billion, build a new refinery and develop deepwater reserves as it competes with the US for West African oil. Production in Angola may reach 2m b/d by 2008, from 1.25m b/d in ’05 as new fields come on stream. Oil imports to China rose 34% to 179m bbl in the first 2 months of the year from the same period in ’05, due to rising demand as the country’s automakers sell over 500k cars, buses and trucks a month, reports Bloomberg.

US gasoline stocks plummeted by another 5.4m bbl to 216.2m bbl last week, the largest drop since the week ending 22 Aug 2003, the latest data from the US Department of Energy shows. Despite a 62k b/d fall in imports they remain over 1m b/d for the eighth consecutive week, just over 20% higher year-on-year. Crude stocks grew by 2.1m bbl to 340.7m bbl, the highest since the week ending 16 Apr 1999, and 8.2% higher on the year. Imports rose 769k b/d to 10.1m b/d but remained 4.4% lower than the same week last year. Distillate inventories dropped 2.5m bbl to 124.2m bbl but remained 20% higher on the year, while imports
inched 2k b/d higher to 222k b/d. Refinery utilisation was 0.3% higher at 87%.

Another cyclone is strengthening off the West Australian coast and is disrupting port operations, according to sources in Australia. The Australian Bureau of Meteorology now classifies Cyclone Glenda as a force five storm. The approach of Glenda has led to the closure of Port Walcott with ships being sent out to sea at Dampier. The cyclone is expected to hit land on Thursday or Friday.

The first loading from the new Chinguetti Oil Field, Mauritania’s first oil development, was completed on Mar 24, with the first 1m bbl cargo destined for China, reports Platt’s. The target production of 75k b/d was reached within 2 weeks, and cumulative gross production passed the 1m bbl mark in just 3 weeks. Chinguetti is currently producing around 70k b/d and is expected to maintain this output for
the rest of the year. The field holds gross proven and probable reserves of 123m bbl of oil and will typically be sold into either Europe, East Coast US or Asian refineries.

Seaborne exports of steam coal from Poland may turn out to be 2-3 Mt lower than in 2005 this year, according to McCloskey. The cold winter in Poland has raised domestic coal prices and diverted supplies from the international market. This has prompted Poland's coal exporter, Weglokoks, to expect seaborne steam coal exports in 2006 of 10 Mt. Any shortfall in Polish shipments could force their customers to source from longer-haul suppliers.

Platts reports that Korean Western Power (Kowepo) is about to award a contract for 0.3 Mt of steam coal from Russia with a further 0.6 Mt from Indonesia. According to the report, the contracts are for three years. Increased reliance on these suppliers shows the tightness of supply from China. Last year, South Korea imported 61.2 Mt of steam coal.

Coal shipments from Murmansk and the Baltic ports climbed in January and February, McCloskey reports. Combined shipments from these ports in the first two months of the year reached 5.7 Mt (up 1.1 Mt year-on-year). Coal exports through Riga rose 0.3 Mt YOY to 1.6 Mt, while shipments from Murmansk increased 0.2 Mt to 1.9 Mt.

Brazil's Agriculture Ministry forecasts soyabean production to reach 57.2 Mt this year, according to a market report from the Chicago Board of Trade. While this is 1 Mt lower than last month's forecast, it would still mark a record crop. The US Department of Agriculture expects Brazil's soyabean exports in 2005/06 to reach 26.1 Mt with soyameal exports totalling 14.1 Mt.

Chinese cities and towns are expected to absorb about 300 million people from rural areas in 20 years if the urbanization drive maintains a growth of one per cent annually, reports China Daily. Liu He, vice-minister of the Office of the Central Leading Group of Financial and Economic Affairs, told the 2006 China Development Forum yesterday that the massive migration of rural labourers will contribute greatly to the development of cities. The urbanization rate currently stands at 1.4 per cent, which means that about 20 million farmers become urban residents each year.

In the first two months of 2006, steel production in both China and India grew over 16% from the same period last year, according to the latest data from the International Iron and Steel Institute. Given global year-on-year growth of 4.3% in January and February, this underlines the importance of China and India to the world steel industry. China produced 29.5 Mt in February, while India's output was 8.9 Mt. Elsewhere, Japan maintained its high production level, with Jan/Feb output totaling 18.3 Mt (up 0.9% YOY), while Russia's output rose 3.3% to 11.0 Mt.

OPEC has lowered its forecast for global oil demand growth in 2006 by 110k b/d, after signs of large stocks in the US and higher demand in Jan and Feb, reports Associated Press. Oil demand growth for this year has been set at 1.46m b/d, with total demand for the year reaching 84.5m b/d. OPEC pumped nearly 30m b/d in Feb, up 320 b/d from the previous month despite production from OPEC-10 dropping 50k b/d to 28.07m b/d.

Global oil stocks ended Feb 150m bbl higher year-on-year at 6.43 billion bbl, with OECD strategic stocks adding 30m bbl, despite last September's authorised drawdown, reports Energy Intelligence. Feb OECD oil stocks stood at 2.59 billion bbl versus 2.57 billion bbl at end Feb '05. While OECD crude stocks in Feb were 32m bbl higher on a year ago, Asia's crude stores were 18m bbl below last year as high refinery runs due to cold temperatures ran down stocks.

China's industrial production rose 16.2% year-on-year in January and February, according to government figures. YOY growth in industrial production has exceeded 16% in every month since April, Bloomberg reports. Surging car production contributed to the healthy increase in industrial output with car production in the first two months of the year climbing 83%.

US crude stocks jumped another 4.8m bbl last week to 339.9m bbl, the highest since the week ending 16 Apr ’99 and 11.4% higher year-on-year, the latest data from the US Department of Energy shows. The rise came despite a 205k b/d fall in imports to 9.9m b/d and refinery utilisation recovering 2.7% to 85.7%. Distillate stores dropped 3.9m bbl to 127.5m bbl, but remained 19% higher on the year, partly due to a 41k b/d fall in imports to 282k b/d. Gasoline stocks fell another 0.9m bbl to 223.9m bbl despite a 158k b/d increase in imports to 1.3m b/d, the highest import level since 14 Oct ’05.

The IEA has revised down its global oil demand growth forecast from 1.78m b/d to 1.49m b/d, or 1.8%, in 2006 to 84.7m b/d, which still represents a recovery from the 1.02m b/d growth in '05, according to their latest market report. The decline is a response to persistently high oil prices and demand weakness in South East Asia. World oil supply rose 490k b/d in Feb to average 84.6m b/d, driven by a 335k b/d rebound in Iraqi supply over the month due to higher southern exports. Despite this, total crude supply from the 11 OPEC states only rose 220k b/d to average 29.6m b/d in Feb due to a dip in OPEC-10 supply to 27.8m b/d as a result of stoppages in Iran and Nigeria and production slippage in Indonesia and Venezuela. On 8 Mar, shut-in oil production in the Gulf of Mexico following last year's hurricanes was 348k b/d.

BHP Billiton Mitsubishi Alliance (BMA) expects the No. 1 coal loader at Hay Point coal terminal to be operational again in mid-April, Platts reports. Initial estimates were that the loader would be out of action for around eight weeks and would be recommissioned in March, weather permitting. But delays caused by high seas and cyclonic conditions meant the damaged boom from the coal loader was removed for repairs on March 6.

Seasonal maintenance work in Apr is set to cut oil production by at least 153k b/d from the North Sea compared to Mar, reports Reuters. Norway's 300k b/d Oseberg oilfield is reducing production for 3 days at the beginning of the month causing the Oseberg crude stream to suffer a 21k b/d fall in its Apr loading schedule. The Statfjord offshore terminal will be halting loadings for 10 days due to pipeline maintenance while Statfjord A and Snorre A oilfields will be closed for most of the month. The combined loading plan for the crude oil streams of Brent, Forties and Oseberg (BFO) is pencilled in at 1.05m b/d in Apr, down 40k b/d from Mar.

The South African transport workers union SATAWU has begun a national strike from 1400 hrs local time today, McCloskey reports. The strike was originally planned to begin March 13, in protest at plans to restructure the passenger service Metrorail. A regional rail strike is also threatened on March 15 in Mpumalanga. Spoornet officials said they had had no notification of the transport workers strike starting early today, instead of on Monday, and had not heard of any disruption to railings to Richards Bay Coal Terminal. The terminal's coal stocks have fallen below 2 Mt to around 1.8 Mt today, because heavy rains have continued to hamper production.

OPEC has agreed to keep its oil output ceiling at 28m b/d, unchanged since July ’05. The group will meet again June 1 to review this position. Oil prices remain in contango, and this is widely expected further stock build and could put some downward pressure on prices.

Last week in the US crude stocks rose to 11% above levels for the same period last year to their highest level since the end of April 1999. This was partially due to a surge in imports to over 10.1mb/d and refinery utilization dropping another 2.2% to 83% - about 5% lower year-on-year. US production remains about 8% down year-on-year at an average of 5.054mb/d.
American gasoline stocks were relatively steady last week and remain similar to levels a year ago. Gasoline imports, meanwhile, remain firm, up 17% year-on-year at an average of 1.1mb/d last week.
Despite the firm stock and import levels, US gasoline prices rose last week and the US Dept of Energy (EIA) says that this trend will continue on the back of the following points:
- EIA does not expect a precipitous drop in crude oil prices, with an expectation that WTI crude will stay above $60 per barrel through the summer months.
- Strong global demand, combined with the potential for continued supply disruptions in many key producing areas.
- Seasonal rise in gasoline demand.
- The elimination of MTBE as a gasoline additive and the concurrent switch to ethanol. The EIA concludes that the transition away from MTBE-blended reformulated gasoline may give rise to local imbalances between supply and demand and associated price surges during the change.