News archive November 2010

Petroleum product exports from the Former Soviet Union (FSU) averaged 2.76 mb/d during October, a 304 kb/d increase year-on-year, Argus reports. Fuel oil shipments increased by 230 kb/d yoy to 1.24 mb/d, gasoil exports were up 18 kb/d to 867 kb/d with vacuum gasoil shipments rising by 66 kb/d to 289 kb/d, whilst the volume of mogas exported increased by 41 kb/d to 120 kb/d. Naptha and jet exports were down, falling by 14 kb/d and 40 kb/d yoy to 227 kb/d and 8 kb/d respectively.

According to data from the China Iron & Steel Association (CISA) quoted by major media sources, national daily crude steel output in
the second ten days of November was virtually unchanged from the first ten days in November at 1.61 Mt. This compares with a daily rate of
1.56 Mt in the same period in October.

Chinese iron ore stockpiles rose 1.5 Mt to 78.5 in the week ending November 26, the highest level since end August, according to U-Metal. This is only 1.3 Mt short of the year-to-date high of 79.8 Mt seen in mid-August.

The price of Chinese wire rod rose for the fourth consecutive week to a new 2010-peak of $691/t in the week ending 26 November, up $96/t or +16% from three months ago, according to data from World Steel Dynamics. This represents the highest level since early September 2008.

According to the latest government data, crude inputs at Indian refineries averaged 3.21 mb/d during October, a 160 kb/d fall from the same month last year, but up 240 kb/d from September, Dow Jones reports. The month-on-month increase comes as various units return from maintenance, but the shutdown of a CDU and coker plant at Reliance's 660 kb/d Jamnagar plant ensured processed volumes were down from a year earlier. The data does not include inputs at the Reliance's second, 580 kb/d, export-based Jamnagar refinery.

S. Korea's crude imports rose nearly 2% on the year in October to 2.47 mb/d, despite declining 1% from the 2010 high witnessed in September, reports Energy Intelligence. Shipments from Saudi Arabia were down 3% at 772 kb/d, while those from Kuwait and Iraq rose 31% and 98% respectively to 415 kb/d and 248 kb/d. Import volumes have averaged 2.36 mb/d in Jan-Oct, 1.7% higher on the year, while domestic demand during the period has risen 1.5% y-o-y to 2.14 mb/d.

China's crude imports from Angola slumped 54% in October, or 492 kb/d, to 412 kb/d, as the country reportedly imported its lowest volume of crude since March 2009, reports Energy Intelligence. Despite the decline, overall volumes from Angola in Jan-Oct were up 32% on the year, averaging 814 kb/d. Imports from Saudi Arabia were relatively unchanged on the month at 915 kb/d, while, shipments from Oman and Iraq were up 52% and 34% respectively at 306 kb/d and 263 kb/d. Overall, imports from the main MEG countries were up 21% on the month at 2.2 mb/d, despite the total monthly decline. It has been suggested that the significant decline reported in overall import volumes could be due to some deliveries in late October being accounted for in November data, while the National Day holidays in early October could have resulted in some cargoes being included in September numbers.

According to the latest data from the EIA, crude imports averaged 9.02 mb/d last week, a 1.16 mb/d rise from the week before. Over the same period, crude inventories increased by 1.0 MB to a total of 358.6 MB. Crude inputs at the country's refineries were stable, increasing by 9 kb/d to 14.28 mb/d. Mogas inventories rose by 1.9 MB to 209.6 MB, as imports jumped 222 kb/d from the week before. Distillate stocks continued to fall, decreasing by 500 KB to 158.3 MB, whilst imports rose by 43 kb/d to 130 kb/d.

South Korea imported 2.47 mb/d of crude oil last month, a 1.9% increase year-on-year, reports Dow Jones. Crude inputs at the country's refineries also averaged 2.47 mb/d in October, a 6.9% increase yoy. The rise comes as strong regional demand supports refining margins. Gasoil margins are particularly strong, as shortages of diesel in China have boosted demand. South Korea intends to keep runs high for the rest of the year, with crude inputs at refineries planned at 2.45 mb/d during both November and December.

October saw total North Sea crude and condensate production average 3.37 mb/d, a 317 kb/d increase from the month before, Argus reports. The rise comes as Norwegian output grew by 304 kb/d mom to reach a six-month high of 1.93 mb/d, after a number of fields returned from heavy third quarter maintenance. Production in the UK sector was comparatively stable, rising 13 kb/d mom to 1.18 mb/d.

World steel production in October totalled 118 Mt, up 5% month-on-month, according to data from the World Steel Association. The world total for October marks an increase of 2.4% year-on-year and 18.5% higher than October 2008.

Annual production increases were seen in most of the major steel making centres except China. Production in China was 50.3 Mt, down 3.8% on October 2009. In contrast, output in the US increased (+9.6% to 6.6 Mt), as it did in Japan (+8% to 9.5Mt) and the EU-27 (+4.4% to 15.4 Mt).

The October production totals bring world output in the first ten months of the year to 1165 Mt, around 173 Mt above the corresponding period last year, compared with 1138 Mt in the same period of 2008.

Shell has today declared force majeure on Nigerian Bonny Light exports after it emerged that a pipeline used for delivery of the crude had been damaged, Reuters reports. The cause of the damage has yet to be identified. Exports of Bonny Light this month had been planned at 295 kb/d, the highest level in nearly three years. Oil operations in Nigeria have already suffered disruption this month after Exxon Mobil were forced to limit operations on an offshore oil platform following a rebel attack that resulted in the taking of hostages.

Global oil supply in October rose by 2.52 mb/d year-on-year and by 1.48 mb/d from the month before, reaching 88.31 mb/d, Energy Intel reports. This took global production to within 90 kb/d of the February 2008 all-time high. Last month's rise came as maintenance programs ended at various fields across the world. Meanwhile, global oil demand rose by 2.21 mb/d yoy to 87.77 mb/d, but this was a 170 kb/d decline from September.

According to the latest weekly data from the EIA, U.S. crude stocks declined by 7.3 MB to 357.6 MB last week. The draw came after imports fell by 225 kb/d to 7.86 mb/d and inputs at refineries rose by 217 kb/d to 14.28 mb/d. Refinery utilisation reached 84.0% of total capacity, up from 82.4% a week earlier. Meanwhile, mogas stocks fell by 2.7 MB to 207.7 MB, as imports fell by 47 kb/d to 44 kb/d. Distillate stocks fell by 1.1 MB to 158.8 MB, whilst imports more than halved, falling by 93 kb/d to 87 kb/d.

The FOB price of Indian iron ore of 63.5% Fe content rose to a 6-month high of $147/t at the end of last week, according to data from U-Metal. This represents the highest level since mid-May and takes the delivered price to China to $165/t, though still short of the 2010-high of $188/t seen in April.

Iron ore imports by South Korea in September slipped by 0.8 Mt or 17% month-on-month to 4.0 Mt, the lowest level since February, according to data from customs service. The data showed some declines in shipments from both Australia (-0.5 Mt to 2.9 Mt) and Brazil (-0.6 Mt to 0.7 Mt). Nevertheless, imports in the first nine months in South Korea showed a marked increase, up 36% year-on-year to 40.2 Mt, bringing the annualised rate to 53.6 Mt, which would mark a new record annual total.

According to the latest provisional loading schedule, exports of CPC Blend from the Yuzhnaya Ozereyevka terminal near Novorossiysk will average approximately 668 kb/d in December, Dow Jones reports. This represents a slight fall from scheduled exports this month, which are set to average 688 kb/d. December's shipments will be made up of 25 cargoes.

The price of Chinese wire rod rose $11/t over the week to a year-to-date high of $670/t at the end of last week, according to data from World Steel Dynamics. This represents the highest level since mid-September 2008.

In the week ending November 12, Chinese iron ore stockpiles rose 1.0 Mt to 77.2 Mt, posting the highest level since early September, according to U-Metal. This compares with the year-to-date high of 79.8 Mt seen in mid-August.

A survey of European traders estimates that naphtha shipments from Europe to Asia will reach 290,000 MT, a 180,000 MT increase from October, Bloomberg reports. The surge comes as a result of strong demand for petrochemicals, for which naphtha is a feedstock, from China. Ethylene production, for example, rose 32% in October to 1.3 million MT. On top of this, domestic naphtha production in the country has fallen as refiners turn their attention to producing diesel in response to shortages. Petrochemical producers in Japan, Taiwan and South Korea are also reportedly running crackers at close to full capacity, adding to regional demand for naphtha.

In its latest Oil Market Report, the International Energy Agency (IEA) forecast global oil demand growth in 2010 to average 2.3 mb/d year-on-year, an upward revision of 200 kb/d from the organisation's previous report. Accordingly, global oil demand for the year is now projected at 87.3 mb/d. The revision was largely prompted by stronger-than-anticipated demand data for the OECD during 3q10. Growth is forecast to slow next year to 1.2 mb/d y-o-y. Meanwhile, the report estimates 3q10 global refinery throughputs of 75.7 mb/d, a 2.2 mb/d increase from the same period in 2009. October, however, saw OECD crude runs fall 2.4 mb/d from September to 34.6 mb/d, their lowest level since 1993. Global crude runs are forecast at 73.9 mb/d in 4q10, as OECD activity recovers during November, and Chinese runs increase on the back of stronger diesel demand.

Crude oil inputs at Chinese refineries averaged 8.75 mb/d during October, up 12.2% year-on-year and representative of a new record high in terms of total volumes processed, Dow Jones reports. Responding to ongoing diesel shortages, increased runs saw output of the product increase by 9.2% from a year earlier to an average of approximately 3.24 mb/d.

In their latest monthly report, OPEC forecast 2011 global oil demand of 86.95 mb/d, a 120 kb/d upward revision from last month's report. Demand for the group's crude is anticipated at 29.2 mb/d next year, a 400 kb/d increase from the previous forecast, whilst the forecast for non-OPEC supply in 2011 has been revised down by 70 kb/d to 52.5 mb/d.

Preliminary Chinese data for October show iron ore imports of 45.7 Mt. This is down 6.9 Mt (-13%) on September and the second lowest monthly total in 2010.

While China’s steel production has been reduced as a result of the government’s energy saving measures and cargo availability from India remains restricted, the weak Chinese import number does appear inconsistent with recent records for Australian and Brazilian exports. The month-on-month decline in Chinese imports may have been exaggerated by October’s national holidays and the fact that many of the vessels that have recently arrived in China have yet to discharge. According to our latest estimates, 45 Capes are waiting at China’s main iron ore import terminals.

US crude stocks fell by 3.3 MB last week to a total of 364.9 MB, according to the latest data from the EIA. The drop came at the same time as crude imports fell by 489 kb/d to an average of 8.09 mb/d and crude inputs at the country's refineries increased by 153 kb/d to 14.06 mb/d. Overall refinery utilisation stood at 82.4% of total capacity, up from 81.8% the week before. Meanwhile, mogas stocks declined by 1.9 MB to 210.3 MB, as imports fell by 69 kb/d to 802 kb/d. Distillate inventories fell by 5.0 MB to 159.9 MB, whilst imports nearly doubled week-on-week to 180 kb/d.