tuesday march 14,€¦ · about 4.96 million barrels a day in april, according to the eia's...
TRANSCRIPT
Tuesday
March 14, 2017
March 14, 2017
Saudi Tells OPEC It Eased Cuts by Pumping 10 Mln B/DBy Grant Smith Saudi Arabia told OPEC it raised output back above 10 million barrels a day in February, reversing about a third of the cuts it made the previous month.
The kingdom, which had curbed supplies more than it needed in January to lead the way in an accord to re-balance world markets, boosted production by 263,300 barrels a day to 10.011 million a day, according to a monthly report from OPEC today. That figure, submitted by Riyadh, jarred with OPEC’s own estimates, which showed Saudi production falling further last month to 9.8 million barrels a day.
Even after the increase, Saudi Arabia’s data shows it’s cutting output more than required under the terms of OPEC’s Nov. 30 agreement. Still, it follows a warning from Energy Minister last week that the kingdom won’t indefinitely “bear the Khalid Al-Falihburden of free riders.” Russia, Iraq and the U.A.E are yet to deliver all the curbs they promised.
Crude slipped back below $50 a barrel last week for the first time since December as surging stockpiles and production in the U.S. suggest the cuts aren’t working fast enough.
Speaking at the CERAWeek oil industry conference in Houston last week, Saudi Arabia’s Al-Falih said the country hasn’t decided yet whether OPEC should prolong the curbs once they expire in June.
At 10.011 million barrels a day, Saudi output is still below the ceiling of 10.058 million a day imposed by the agreement. Production data that OPEC derives from external sources, such as news agencies, showed Saudi output falling by 68,100 barrels a day to 9.797 million a day.
That data, referred to as “secondary sources,” showed OPEC as a whole getting closer to full implementation of the cutbacks, with output falling in February by 139,500 barrels a day to 31.958 million a day. The numbers imply the organization is about 85 percent of the way toward delivering its full reduction, amid better adherence by Iraq and the U.A.E. Full on Terminal.story
Company Watch
4:30 p.m.: API U.S. oil inventory report
All times eastern
Events
"The market has started to doubt that OPEC will prolong the cut deal into the second half of 2017 and hence maybe the stock draws that would follow will not happen. Hence, backwardation is changing to contango for that part of the curve."– Torbjorn Kjus, chief oil analyst at DNB Bank
Quote of the Day
13% — Drop in 's crude output Libyaas clashes among rival armed groups over the last 11 days led to the closing of some of the OPEC nation's biggest oil exports terminals.
Number of the Day
Today's Oil News
Shale Production Reaches 'Turning Point' — Commerzbank
Production from major U.S. shale plays is forecast to rise by more than 100,000 barrels a day to about 4.96 million barrels a day in April, according to the 's , EIA Drilling Productivity Reportpublished on March 13. That's the highest since March 2016, the data show. "The monthly increase is actually higher than during the boom period in 2013/14, when production grew on average by nearly 90,000 barrels per day each month," said in a report today.Commerzbank
— Christopher Sell
Note: Oil and gas integrateds producing more than 1 million barrels a day of crude, according to Bloomberg Intelligence. Company data as of 11:30 am London time. U.S. company data as of previous day's close.
Oil Buyer's Guide 2 March 14, 2017
Today's Oil News
SupplyOil reversed earlier gains after Saudi
Arabia told OPEC it raised output back above 10 million barrels a day in February, reversing about a third of the cuts it made the previous month. Futures fell 0.6 percent in New York after losing 9.2 percent the previous six sessions. The kingdom, which had curbed supplies more than it needed in January to lead the way in an accord to re-balance world markets, told OPEC it boosted production by 263,300 barrels a day last month, a figure that jarred with the group’s own estimate that Saudi production fell further. Full on Terminal.story
China’s crude production fell to the lowest since October as higher oil prices failed to lure domestic drillers back to fields. Average daily production in January and February declined 1.5 percent from December to 3.91 million barrels a day, according to Bloomberg calculations based on data from the National Bureau of Statistics released today. Output was down 8 percent from the same period last year. Oil processing in the two months fell 0.3 percent from December to about 11.28 million barrels a day. Full on Terminal. story
Russia said there is no consensus on an oil-output cut extension yet. “There are different points of view. It’s too early so far to talk about the possibility of forming a single position” on extending
deal to cut global oil output, Kremlin spokesman Dmitry Peskov told reporters on a conference call. Full on story Terminal.
Kuwait wants OPEC to extend output cuts beyond June, becoming the producer group’s first member to call for more time to balance the global oil market as the rally that boosted prices initially on the curbs has faded. U.S.
inventories have climbed more than expected, causing prices to decline even as global producers cut their output, Kuwait’s Oil Minister Issam Almarzooq
official news agency said, according toKuna. Kuwait supports rolling over the oil cuts, though it’s too early for OPEC to agree on an extension, he said. Full story on Terminal.
Libya’s crude output dropped 13 percent as clashes among rival armed groups over the last 11 days led to the closing of some of the OPEC nation’s biggest oil export terminals, forcing a number of fields to halt production. Output is down to 602,900 barrels a day, Jadalla Alaokali, a board member at National Oil Corp., said by phone March 13. Production was about 700,000 barrels a day before fighting broke out on March 3. The offshore Al Jurf field run by Mabruk Oil Operations is under maintenance, contributing to the reduced supplies, Alaokali said. Full on storyTerminal.
Crude oil grades from South America accounted for 34 percent of total imports by independent refineries in China in 2016, Liu Chuanjun, information director at commodities researcher ICIS-China, said at an industry conference in Beijng today. Full on Terminal.story
Lukoil returned to profit in the fourth quarter after crude prices rallied. Russia’s No. 2 oil producer reported net income of 46.6 billion rubles ($790 million), compared with a loss of 65 billion rubles a year earlier. That beat the 45 billion-ruble average estimate of seven analysts surveyed by Bloomberg. Revenue held steady at 1.4 trillion rubles. Full on story Terminal.
Companies
Iraq is seeking crude output of 5 million barrels a day by year-end, according to the Iraq Oil Report, citing an interview with the Iraqi Oil Minister Jabbar Al-Luaibi. The deal with OPEC relates to cut in exports, not output, and Iraq is in line with it, he said. Full on Terminal.story
The spread between cleaner 10 parts per million sulfur diesel and lower-quality 500ppm sulfur diesel is narrowing in Asia as countries such as China and India make more of the premium grade, according to a Bloomberg survey of five traders and analysts. The premium of 10ppm sulfur diesel over 500ppm sulfur gasoil has shrunk to less than $0.10 a barrel in March from an average of about $0.96 a barrel last year, three traders said. Full on Terminal.story
There is a "good chance" of U.S. gasoline demand continuing to grow to 10 million barrels a day over the next decade if domestic fuel economy standards are further diluted by the Trump administration, FGE said in an emailed research note. Full on Terminal.story
The Trump administration’s plan to slash corporate tax rates could free up more than $10 billion a year for U.S. oil explorers, opening new opportunities to boost drilling at a time of uncertainty in the marketplace, according to a report by Bloomberg Intelligence. Full on storyTerminal.
Total's Port Arthur, Texas, refinery expects its fluid catalytic cracker will run at normal rates next week for the first time since a Feb. 7 fire damaged a pump on the unit, a person familiar with operations said. Full on Terminal.story
Exxon's Joliet, Illinois, refinery plans to shut an alkylation unit in the last week of March for planned work, people familiar with operations said. The work is expected to last several weeks. Full on storyTerminal.
Market Calls
Refinery Outages
Early Insight
Oil Buyer's Guide 3 March 14, 2017
Waterborne U.S. Imports for in the Week Ended March 9, AHOY<GO>
kb/dCrude
OilFinished Motor
GasolineMogas Blending
Comp.Total Motor
GasolineEthanol
Jet Fuel
Distillate Fuel Oil
Residual Fuel Oil
Unfinished Oils
Total Crude and Products*
PADD I 616.6 41.1 335.5 376.6 1.3 37.8 97.5 126.1 26.2 1280.8
PADD III 1817.8 0.0 28.7 28.7 0.0 0.0 31.2 143.4 112.3 2133.4
PADD V 836.4 12.2 25.6 37.8 0.0 101.4 15.7 164.8 40.0 1196.1
Sum 3270.8 53.3 389.8 443.1 1.3 139.2 144.4 434.3 178.5 4610.3Source: Bloomberg LP
Change from Prior Week AHOY<GO>
kb/dCrude
OilFinished Motor
GasolineMogas Blending
Comp.Total Motor
GasolineEthanol
Jet Fuel
Distillate Fuel Oil
Residual Fuel Oil
Unfinished Oils
Total Crude and Products*
PADD I -204.1 6.9 89.5 96.4 1.3 19.5 -30.3 -30.8 -40.1 -189.4
PADD III -1269.7 -46.2 18.8 -27.3 -17.9 -4.5 31.2 -211.2 -124.0 -1605.5
PADD V -218.3 -0.3 25.6 25.3 0.0 11.5 -27.5 52.7 -75.8 -232.1
Sum -1692.1 -39.5 133.9 94.4 -16.6 26.6 -26.7 -189.3 -240.0 -2027.0Source: Bloomberg LP *Total does not include ethanol. Tables compiled by Michael Carone, Bloomberg LP
Early Insight
U.S. Waterborne Crude Imports Fell by 1.7 Million Barrels a DayBy Christopher SellPreliminary U.S. waterborne crude imports fell by 1.7 million barrels a day to 3.3 million barrels a day in the week ended March 9, according to customs data compiled by Bloomberg. The Gulf Coast saw the biggest decline of 1.3 million barrels a day to 1.8 million barrels a day. The East and West Coasts dropped by 204,100 and 218,300 barrels a day, respectively. Total crude and product imports fell by 2 million barrels a day to 4.6 million barrels a day.
Cushing Stockpiles Increased by 1.3 Million Barrels Last Week: Bloomberg EstimateBy Christopher SellCrude stockpiles at the Cushing, Oklahoma, storage hub are projected to have increased by 1.3 million barrels in the week ended March 10, according to a Bloomberg estimate.
This would bring crude stocks at the hub to 65.7 million barrels. Currently, stockpiles are at 64.4 million barrels, according to data.EIA
Click here to learn more on the methodology.
Tanker Tracker
Net Flows Monitored by Genscape
Oil Buyer's Guide 4 March 14, 2017
Tanker Tracker
U.S. Crude and Product Shipments Rose for Second WeekBy Christopher SellCrude and refined product shipments from the U.S. Gulf rose to 4.13 million metric tonnes on 100 ships in the week ended March 9. That's up 3 percent from the previous week's 4.01 million metric tonnes on 98 ships, according to data compiled by Bloomberg. It IHS is the second weekly increase. Shipments to Asia Pacific rose to 220,423 metric tonnes from 158,356 metric tonnes the previous week, while South America increased to 743,446 metric tonnes from 560,509 metric tonnes. Tonnes to Northwest Europe fell, however, to 318,070 metric tonnes from 526,037 metric tonnes the previous week.
Fuel Exports From U.S. Gulf Total 4.13 Million Metric Tonnes
Supply
Oil Buyer's Guide 5 March 14, 2017
Supply
Pipeline Flow from Canada to U.S. Reaches Record Levels: GenscapeBy Christopher SellFlow on monitored crude pipelines from Western Canada to the U.S. increased by 28,000 barrels a day to a record level of 3.566 million barrels a day in the week ended March 3. This was higher than the 3.555 million barrels a day level reached in the week ended Feb. 3, according to a report by .Genscape
Weekly pipeline flows increased on all four monitored lines. Flows on
’s 590,000 barrel-a-day TransCanadaKeystone and ’s 282,000 barrel- Enbridgea-day Express pipelines are both averaging at their highest levels since Genscape coverage began in October 2015, analyst said in the Eric Medleyreport.
Flows from Canada to the U.S. have increased steadily along withproduction in Alberta.
As of March 3, pipeline flows from
averaged 3.48 million Canada to the U.S. barrels a day in 2017. This was nearly
300,000 barrels a day higher than the average flow rates in 2016, the report said.
Benchmarks
Flows From Western Canada to U.S. Reached 3.56 Million B/D
Oil Buyer's Guide 6 March 14, 2017
Benchmarks
For live spot prices, click or run on Bloomberg. For crack here BOIL<GO>
spreads, click or run here CRKS<GO>
Futures Based Swaps
PERIOD WTI BRNT WTI/BRNT NYULSD NYULSD/WTI
Bal Mo 49.02 51.76 -2.74 150.68 14.27
APR 17 49.4 51.96 -2.56 151.45 14.21
MAY 17 49.78 52.13 -2.35 152.34 14.21
JUN 17 50.09 52.28 -2.18 153.34 14.31
Bal Qt 49.02 51.76 -2.74 150.68 14.27
Q2 17 49.76 52.12 -2.36 152.38 14.24
Q3 17 50.45 52.44 -1.99 155.68 14.94
Q4 17 50.73 52.55 -1.82 158.83 15.98
Bal Yr 50.18 52.31 -2.13 155.13 14.97
Cal 18 50.81 52.34 -1.53 159.27 16.08
Cal 19 50.68 52.06 -1.37 161.9 17.31
PERIOD NYULSD/BR NYRB NYRB/WTI NYRBBR RBHO
Bal Mo 11.53 159.23 17.86 15.12 8.55
APR 17 11.65 161.33 18.36 15.8 9.88
MAY 17 11.86 162.24 18.36 16.01 9.9
JUN 17 12.13 162.01 17.95 15.77 8.68
Bal Qt 11.53 159.23 17.86 15.12 8.55
Q2 17 11.88 161.86 18.23 15.86 9.49
Q3 17 12.95 155.07 14.68 12.69 -0.61
Q4 17 14.15 141.38 8.65 6.83 -17.45
Bal Yr 12.85 153.42 14.25 12.13 -1.72
Cal 18 14.55 150.52 12.41 10.88 -8.74
Cal 19 15.94 147.8 11.39 10.02 -14.1Source: Bloomberg
For live swap prices, click or run on Bloomberghere CFVL<GO>
Spot prices as of end of previous day. Futures as of 7:30 a.m.
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