US Gasoline Stocks Continue To Rise
US gasoline inventories continued to rise by another 0.3m bbl last week to 225.9m bbl, the highest since the week ending 4 Jun '99, the latest data from the US Department of Energy shows. This was helped by a 37k b/d rise in imports to 1.23m b/d, 25% higher year-on-year, and a 95k b/d fall in demand to 8.95m b/d. Crude stores rose 1.6m bbl to 328.3m bbl to remain at the highest level since the week ending 24 Jun '05, 9.7% higher than the same week last year. The rise came despite another 81k b/d fall in imports to 9.9m b/d. Distillate stocks dropped another 1.5m bbl to 134.1m bbl but remained 21.9% higher on the year. Imports fell another 188k b/d to 306k b/d, 38% down on the previous week, while demand also fell by 103k b/d to 4.26m b/d. Refinery utilisation dropped 1.4% to 85.2%.
Port authorities expect the Parker Point berth at Dampier to re-open on Wednesday mid-afternoon (local time) weather permitting, while the East Intercourse Island berth is set to re-open later in the week. Dampier closed on Monday as Tropical Cyclone Emma approached. The SSY Australian port congestion index estimates berthing delays at the country's iron ore ports at 7.6 days.
Newcastle Shipments Dip Last Week
Coal exports from Newcastle in the last week fell to 1.30 Mt, equating to an annual rate of 67.95 Mt, according to figures from Port Waratah Coal Services quoted by McCloskey. This compares with the target annual rate for the 1q06 of 87.4 Mt. The vessel queue at the port fell to 19 from 21. Reports from Australia suggest that problems with some of the loading equipment and a squeeze in cargo availability have contributed to the lower shipment rate. The SSY Australian Coal Port Congestion Index shows delays of 9.5 days, maintaining the high levels seen so far in 2006.
Chinese crude imports top 3mb/d in January
China imported a record volume of crude in January 2006, averaging 3.13mb/d. The latest customs data confirms this 17% rise from December, which marks a 70% increase on January 2005 levels. Chinese product imports, meanwhile, averaged 620K b/d in Jan 2006, a fall of 17% from December and down by about 22% year-on-year.
Brazil's Iron Ore Exports Dip
Brazil's iron ore exports totalled 16.3 Mt in January, down from 20.5 Mt in December and down by 0.4 Mt yr-on-yr. The January total represented the lowest monthly volume since May 2004.
Oil Jumps After Saudi Suicide Bomb Attack
Crude oil prices jumped $2 a barrel, the most in a month, after an attempted suicide attack on Saudi Arabias Abqaiq oil facility, the world's biggest processing plant, which handles two-thirds of the oil from the worlds largest producer, reports Bloomberg. Saudi Arabia produces about 9.5m b/d, an amount equal to around 11% of global consumption, and is the only OPEC member with enough spare capacity to make up for disruptions in the world's supply. The kingdom accounts for a sixth of the world's oil exports, supplying 7.5m b/d. Oil output was unaffected after 3 cars packed with explosives were detonated at the gates of the facility when security forces fired on the suicide bombers trying to storm the plant, reports Reuters. 3 Saudi security forces were killed, as were all the would-be attackers, and 10 injured in the blast.
China's Coal Exports Decline
January coal exports from China fell to one of the lowest monthly totals for five years, according to official customs statistics. Exports of 4.1 Mt were down from 6.5 Mt in December and down 2.6 Mt yr-on-yr. Meanwhile, coal imports stood at 2.6 Mt, up by 0.6 Mt compared to January 2005.
Global Oil Stocks Grow In Jan
Global oil supply outstripped demand by over 1m b/d in Jan, reversing a large stockdraw at the end of 2005, reports Energy Intelligence Briefing. Jan demand totalled 84.5m b/d, 2.3% higher year-on-year despite falling 2.3m b/d from Dec, while supply reached 85.6m b/d, also 2.3% up on the year, having risen 0.3m b/d since Dec. Total OECD stocks rose 300k b/d in Jan from the previous month, growing 26m b/d on Jan '05, having experienced a 2.1m b/d decline in Dec. Total global stocks in Jan came in at 6.4 billion bbl, 147m bbl higher than the same time last year.
Record Chinese Aluminium Output
January saw a new all-time high for Chinese aluminium production, of 690,000 tonnes, according to data published by the International Aluminium Institute This ensured that January's global output total remained at its December 2005 peak of 2.7 Mt.
Ecuador Stops Crude Exports Due To Protests
Ecuador's state oil firm Petroecuador has been forced to suspend 144k b/d of crude exports after the government declared a state of force majeure after a violent demonstration in Napo province shut a key pipeline, reports AFP. The affected pipeline ships 380k b/d from the Amazon to the port of Balao in the north-west of the country and is expected to be down for 24-36 hours. A private pipeline with a 500k b/d capacity continued operating normally. Ecuador produces 532k b/d, making it South America's fifth largest oil producer and an average 270k b/d was exported to the US in Jan-Nov '05. Local inhabitants are demanding a crackdown on alleged corruption by big oil companies and want more of the country's wealth to be spent on infrastructure and new jobs. A similar protest last August halted Ecuador's daily exports of crude oil for 2 weeks.
World Steel Output up 5% in January
Global crude steel output in January totalled 94.7 Mt, a year-on-year increase of 5%, according to data from the International Iron & Steel Institute. Chinese production of 30.3 Mt was up by 21% and India recorded a new monthly record for steel output of 3.6 Mt, up 18% YOY. Other major steel producing regions continued to show negative growth: Japan's production fell by 1% to 9.5 Mt while EU-25 output was down 7% at 13.7 Mt. However, there were some signs of a potential rebound in the more traditional steelmaking regions: US production of 8.3 Mt was equal to that of January 2005, following several months of negative growth, while UK output of 1.2 Mt was the highest since May and French production of 1.8 Mt was the highest for a year.
Nigerian Militants Attack Oil Targets Again
Royal Dutch Shell Plc stopped pumping 455k b/d in Nigeria, 19% of the country's output, or 1.5 percent of OPECs output, after militants set fire to an export terminal and kidnapped nine foreign oil workers over the weekend, reports Bloomberg. The rebels have also announced they blew up a military houseboat and an oil pipeline earlier today, extending a campaign of sabotage in the worlds eighth largest exporter which has already cut supplies by a fifth. The militants are attempting to prevent Royal Dutch Shell from using the damaged Forcados export loading platform, which accounts for 15% of Nigerian's output. Nigeria pumps about 2.8% of the worlds oil with production reaching 2.36m b/d in Jan, making it the sixth-biggest producer in OPEC and the fifth-largest supplier to the U.S, reports Bloomberg.
January data suggests surge in crude and iron ore volumes
Preliminary Chinese customs data suggests that crude imports rose by more than 17% in January on December's figures to an average of 3.13mb/d. Should this be confirmed it will be the highest volume of crude imports on record and would mark a 70% increase on January 2005 levels. Chinese product imports, meanwhile, averaged 620K b/d in Jan 2006, a fall of 17% from December and down by about 22% year-on-year.
For dry bulk markets, early data suggests that Chinese monthly iron ore imports were over 26 million tonnes for a third consecutive month in January 2006. Should this figure be confirmed, it would indicate a 27% rise year-on-year.
Strong Start to the Year for Chinese Iron Ore Demand
China's January iron ore imports totalled 26.6 Mt, according to news agency Xinhua. If confirmed, this would be the third consecutive month of imports over 26 Mt, representing year-on-year growth of 5.7 Mt. Meanwhile, Macquarie Bank reports that a resumption of buying after the Chinese New Year has lifted iron ore spot prices.
OPEC Revises World Oil Demand Growth Forecast For 2006
Global oil demand is forecast to rise by 1.89% in 2006 to 84.6m b/d, marginally lower than the previous estimate of 84.8m b/d, according to OPEC's latest monthly report. The largest rise is expected in China, with demand projected to increase by 6% to 6.9m b/d. North America oil demand is estimated to rise by 0.35m b/d, or 1.38% year-on-year, to average 25.8m b/d, accounting for more than 75% of the total 0.93% expected growth within the OECD, according to the group. Demand in developing countries is expected to grow by 2.9% to average 22.8m b/d, with non-OECD Asia's oil demand growth of 3.8% accounting for half of the total expansion. Average OPEC 10 crude oil production totalled 29.7m b/d in Jan, 170k b/d lower than the previous month but about 8% higher year-on-year. Output from non-member states is expected to rise 1.38% in 2006 to 51.53m b/d.
Iron Ore Railway Disruption in Brazil
Metal Bulletin reports that with effect from early Tuesday, a group of indigenous Indian community representatives have again occupied the Carajas railway. This has halted all iron ore, other cargo and passenger traffic on the line for the second time in a week. The Guajajaras are demanding better health services from Brazil's national health service. CVRD, which operates the railway, claims that it has nothing to do with the issue and points out that the Guajajaras are acting in defiance of the law. Last week a three-day occupation of the tracks in Maranhao state ended after a court ordered that the tracks be unblocked.
US Gasoline Stocks Reach Highest For 6.5 Years
US gasoline inventories grew by 2.2m bbl to 225.5m bbl, the highest since the week ending 4 Jun 99, the latest data from the US Department of Energy shows. The expansion came despite a 94k b/d drop in imports to 1.1m b/d and a 116k b/d rise in demand to 9.08m b/d. Distillate imports rocketed back up by 75.3% last week to reach the
seventh highest weekly average ever at 680k b/d, 109.9% higher than the same week last year. This led to a 0.9m bbl rise in stocks to 136.9m bbl, the highest since the week ending 9 Jan 04 and 21.6% up on the year. Distillate demand remained unchanged at 4.23m b/d despite the extreme weather in the North East. Crude stocks jumped 4.9m bbl to 325.6m bbl, the highest since the week ending 24 Jun 05, and 9.8% higher than last year. The rise was partly due to a 404k b/d increase in imports to 10.3m b/d. Refinery capacity improved slightly at 86.1%.
Indian Coal Imports Up
Coal imports into India started the year at a fast pace, with total January shipments of 3.9 Mt, McCloskey reports. Steam coal imports were the main driver of growth, with January's total of 2.1 Mt representing year-on-year growth of 0.34 Mt. Of that total, some 1.72 Mt was sourced from Indonesia compared to 1.02 Mt in January 2005. South Africa also increased its exports to India, from just 49,000 tonnes to 0.32 Mt. By contrast, imports from China collapsed from 0.66 Mt in January 2005 to just 63,000 tonnes last month.
Sudan's Oil Output Scheduled To Double In 2006
Sudan's oil output is expected to double from current levels of approximately 330k b/d by the end of 2006, reports Dow Jones. The rise in oil production capacity comes from the completion of the Petrodar project in southeast Sudan, originally scheduled to come on stream last year but subject to delays. The project should start pumping at around 75k b/d, quickly rising to125k b/d and reaching 150k b/d by the end of '06. Maximum capacity will be around 300-350k b/d but a timeframe for launch has not been specified, with the entire production and export system currently undergoing tests. Officials are hopeful Petrodar production could reach 250k b/d in 2006. An extra 110k b/d from other blocks is also scheduled for this year. The bulk of Sudan's output is the 300k b/d of Nile Blend produced in Heglig, with other fields adding another 30k b/d, reports DJ.
Strike Action May Further Tighten Richards Bay Coal Supplies
South African rail freight operator Spoornet has conceded that unions are threatening provincial strikes within the next couple of weeks, potentially impacting on coal railings to Richards Bay, McCloskey reports. This comes after a strike at rail company Transnet in early February. According to Spoornet, however, any disruption is likely to be fairly minimal. This follows an estimated loss of 1 Mt during January caused by a combination of heavy rain and derailments.
Light Spring Refinery Maintenance Planned For Europe
European refiners are planning a light turnaround season this spring due to many of them having carried out major overhauls leading up to the reduction of sulphur in transport fuels in the EU in Jan '05, reports Petroleum Argus. Refiners have also been experiencing the most profitable 6 months for many years so are keen to utilise all available capacity. Crude distillation unit shutdowns in the first half of 2006 will be down nearly 9%, or 164k b/d, from a year earlier. The heaviest maintenance schedule is in March with around 529k b/d expected to be shut down, 57% of that taking place in NW Europe, and 40% in the Med. This is to coincide with diminishing demand for heating oil as temperatures begin to rise, but ahead of the summer driving season when gasoline demand peaks, reports Argus.
US Steel Import Demand Remains Strong
Statistics from the US Commerce Department reveal that US steel imports declined in December on a year-on-year basis but increased over the previous month, Metal Bulletin reports. December imports totalled 2.7 Mt, down from 2.9 Mt in December 2004 but up from 2.4 Mt in November 2005. Officials from the American Institute for International Steel cited strong underlying economic growth factors, job creation and low steel inventories as reasons behind robust levels of US steel consumption, with some consumers indicating that they need imports to increase further in response to market conditions.
IEA Lowers Global Oil Demand Growth Forecast
In its February report the International Energy Agency lowered its forecast for global oil demand growth for 2006 to an increase of 1.78m b/d over '05, as opposed to its previous projection of 1.83m b/d. OECD total industry oil stocks fell 65m bbl in Dec due to cold weather boosting crude demand in the Pacific as refiners increased throughputs and drew stocks to keep up with the higher demand for distillates. Crude inventories fell in Japan and Korea due to cold weather encouraging refiners to run at close to record rates. World oil supply fell 135k b/d in Jan to 84.6m b/d due to weather related disruptions and ongoing interruptions to supply from Nigeria and Iraq cutting supplies by 450k b/d. However, these were slightly offset by increases from North and Latin America, Asia and Africa.
January Australian Coal Exports Fall
Australia's coal exports fell in January year-on-year, according to the preliminary port data quoted by McCloskey. January coal shipments totalled 20.08 Mt, down from the 20.56 Mt recorded during the same month last year. The slower start to the year has been attributed to a combination of maintenance and repair work at Gladstone, Hay Point and Newcastle.
Australian Port Congestion Builds
The SSY Australian Port Congestion Indices show significantly higher levels of congestion at the country's iron ore and coal ports. Average delays at west coast iron ore ports currently stand at 8.6 days - the highest level for 18 months, according to the SSY index. Average delays at east coast coal ports have now risen to 10.0 days, the highest for seven months. In the last month Australia's coal ports have been hit by various operational difficulties, including a shiploader at Hay Point being out of service until March and a reclaimer breakdown at Newcastle's Kooragang terminal.