Honda (HMC) and Toyota (TM) are extending their shutdown of auto production in Japan due to a shortage of parts following a major earthquake and tsunami, the Associated Press reports. Toyota says its shutdown of 11 factories will be extended until Saturday because of difficulty securing components, while Honda will continue its production halt through Sunday
Link
http://www.mysmartrend.com/
Showing posts with label Oil and Gas Post. Show all posts
Showing posts with label Oil and Gas Post. Show all posts
Tuesday, March 22, 2011
India's State Oil Companies Lose $90 Million a Day
India's State Oil Companies Lose $90 Million a Day
MARCH 22, 2011, 8:20 A.M. ETBy RAKESH SHARMA
NEW DELHI – India's state-run oil marketing companies are suffering a revenue loss of 4.08 billion rupees ($90.7 million) each day due to discounted fuel sales, Hindustan Petroleum Corp.Finance Director Bhaswar Mukherjee said Tuesday.
India's state-run fuel retailers, Hindustan Petroleum, Bharat Petroleum Corp. and Indian Oil Corp. sell some fuels at government-mandated below-market rates to help control inflation. Due to high global crude oil prices, revenue losses are mounting.
Hindustan Petroleum is currently losing 14.03 rupees for each liter of diesel sold and 23.55 rupees on each liter of kerosene, Mr. Mukherjee told reporters.
The state-run company is also losing 289.36 rupees for each liter of cooking gas, or liquefied petroleum gas, Mr. Mukherjee added.
Write to Rakesh Sharma at rakesh.sharma@dowjones.com
Link
http://online.wsj.com/
Moscow scolds Bulgaria over oil pipeline
Moscow scolds Bulgaria over oil pipeline
March. 22, 2011 at 8:25 AM
MOSCOW, March 22 (UPI) -- The Bulgarian government is in part to blame for all-but shutting down plans for the Burgas-Alexandroupolis oil pipeline, a Russian energy executive said.
Russian Energy Minister Sergei Shmatko said in February that Moscow was interested in the project but had to suspend most of the work because of delays from Sofia.
Bulgaria in 2007 signed an agreement with Russia and Greece to build the 174-mile oil pipeline to bypass crowded waterways near Turkey by crossing an overland route to the Aegean Sea.
Mikhail Barkov, a vice president at Russian pipeline company Transneft, was quoted by Russia's state-run news agency RIA Novosti as saying the project would be scaled down if Sofia doesn't take it seriously.
"If the Bulgarian side fails to treat the Burgas-Alexandroupolis positively, and does not adopt a positive environmental assessment for the oil pipeline, there will be a decision to put the company into a hibernation mode," he said.
Moscow claims the Bulgarian government owes about $10.3 million to the project consortium.
Bulgarian officials brushed off past threats from Moscow, however, saying the rhetoric was intended more as a negotiation tactic than as a statement of intent.
Link
http://www.upi.com/
March. 22, 2011 at 8:25 AM
MOSCOW, March 22 (UPI) -- The Bulgarian government is in part to blame for all-but shutting down plans for the Burgas-Alexandroupolis oil pipeline, a Russian energy executive said.
Russian Energy Minister Sergei Shmatko said in February that Moscow was interested in the project but had to suspend most of the work because of delays from Sofia.
Bulgaria in 2007 signed an agreement with Russia and Greece to build the 174-mile oil pipeline to bypass crowded waterways near Turkey by crossing an overland route to the Aegean Sea.
Mikhail Barkov, a vice president at Russian pipeline company Transneft, was quoted by Russia's state-run news agency RIA Novosti as saying the project would be scaled down if Sofia doesn't take it seriously.
"If the Bulgarian side fails to treat the Burgas-Alexandroupolis positively, and does not adopt a positive environmental assessment for the oil pipeline, there will be a decision to put the company into a hibernation mode," he said.
Moscow claims the Bulgarian government owes about $10.3 million to the project consortium.
Bulgarian officials brushed off past threats from Moscow, however, saying the rhetoric was intended more as a negotiation tactic than as a statement of intent.
Link
http://www.upi.com/
[Oil and Gas] - Libya oil faces steep hurdles before return to global markets
Libya oil faces steep hurdles before return to global markets
March 21, 2011, 8:17 p.m. EDT
By Claudia Assis, MarketWatch
Reuters - Rebels walk past a burning Al-Sedr Oil Terminal after it was hit by pro-Gaddafi forces during clashes between Ras Lanuf and Bin Jawad March 9, 2011.
The Iraq invasion was a major conflict in which much of the oil infrastructure suffered not only damage through warfare but also through looting.
The crisis, which deepened after western forces began bombing Libyan defenses Saturday, bears a resemblance to the situation in fellow OPEC-member Iraq, where output was severely disrupted by two Gulf wars and a diplomatic battle over who controlled the revenue from its sale.
Some of the Libyan oil fields could avoid major damage because they are far away from cities and towns, the target of much of the past weeks’ fighting.
“However, there are no guarantees Gadhafi and his motley crew of fellow believers ... will not follow a scorched earth policy,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.
That’s one danger facing Libyan oil fields. As Iraqi forces under Saddam Hussein withdrew from Kuwait during the first Gulf war, they burned oil wells, Drollas noted.
The United Nations on Friday authorized military action in Libya to protect civilians amid fighting between forces loyal to Gadhafi and rebels seeking an end to his rule. Fighting is mostly concentrated in eastern Libya -- where most of the country’s oil’s production is located. Even the most optimistic analysts don’t expect Libyan oil back on line until after the first half of the year.
Output has already been severely curtailed. Most estimates point to production down by about 1 million barrels a day, J.P. Morgan said in a note to clients Monday. Production before the uprising was estimated around 1.6 million to 1.8 million barrels a day, mostly exported to Europe and, to a lesser degree, to Asia.
“U.N. sanctions have effectively imposed an embargo on Libyan exports. Based on the experience in Iraq, we continue to emphasize Libyan production will remain low and volatile for many years,” they said.
Support for crude-oil prices is likely to rise as demand ramps up ahead of the Northern hemisphere summer, although experts say most of Libya’s strife has been factored into the recent high prices for oil futures.
Oil futures for April delivery /quotes/comstock/21n!f:cl\j11 (CLJ11 102.21, -0.12, -0.12%) rose 1.3% to $103.33 a barrel on the New York Mercantile Exchange Monday, extending the year’s gains to roughly 13%. Oil topped the $100 mark as some pro-democracy protests in North Africa and the Middle East turned to violent conflicts with the ruling regimes, particularly in Libya. Brent crude, the European benchmark, has shot even higher.
Iraq comparisons
Iraq’s oil output following the wars is serving as a model for energy analysts trying to determine how long Libyan oil could be unavailable to European and other refiners.
Production in Iraq was around 2.5 million barrels a day right before the invasion in March 2003
It was back at such levels only in 2007, Drollas said. Recent estimates put Iraq’s current production at 2.8 million barrels a day, Drollas added.
In Libya, much hinges on how the oil installations fare as the battles rage on, and how soon foreign workers will be able to return to the country, said Samuel Ciszuk, a senior Middle East energy analyst at IHS Global Insight in London.
Oil installations near the town of Ras Lanuf have been damaged as the conflict escalated, but experts say most infrastructure has been spared.
As for replacements for Libya’s light, sweet crude, the world has available oil from Nigeria and Angola, which are similar to Libyan oil. Unlike 2008, when Nigerian oil disruptions contributed to the record high oil price, these and other African countries have been able to keep their production, he said.
Some of the heavier Saudi Arabian oil, although not a perfect substitute, is also appropriate for refineries previously using Libyan oil with the addition of natural gas liquids and other liquid hydrocarbons.
But the full price impact of the conflict in Libya may yet to be seen, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.
“We’re in the shoulder season,” she said. Heading to peak season, there may not be enough light, sweet oil to go around, she added. “We may not have the right quality at the right time of the year.”
More sophisticated refineries in Europe and elsewhere are able to process heavier crude but there’s only so much tweaking refiners will be able to do, Emerson said.
Switching grades “is more than a little throw off. We lost a very specific light sweet crude and it is not that easy to replace it.”
The spectrum of another conflict elsewhere in the world also haunts markets.
“The extra capacity (from Saudi Arabia) is there but it tights up the world capacity,” Drollas said. If oil suffers another shock somewhere, “then we are back at 2008.”
Oil hit a record high in the summer of 2008, when it soared to $147 a barrel only to fall to below $50 before the year was out.
Oil around $150 a barrel this year would mean “a slip back into the recession next year,” Drollas said. Prices are at a level they may be already hurting global growth, he added.
The only possible resolution for the conflict is a Libya without Gadhafi, Drollas said. “A wounded Gadhafi is worse, metaphorically speaking,” he said.
Claudia Assis is a San Francisco-based reporter for MarketWatch
Link
http://www.marketwatch.com/
March 21, 2011, 8:17 p.m. EDT
By Claudia Assis, MarketWatch
The Iraq invasion was a major conflict in which much of the oil infrastructure suffered not only damage through warfare but also through looting.
SAN FRANCISCO (MarketWatch) — Caught between Libyan rebels, outside forces and Moammar Gadhafi, it could take years before much of Libya’s oil flows to world markets, energy analysts cautioned Monday.
Some of the Libyan oil fields could avoid major damage because they are far away from cities and towns, the target of much of the past weeks’ fighting.
“However, there are no guarantees Gadhafi and his motley crew of fellow believers ... will not follow a scorched earth policy,” said Leo Drollas, chief economist at the Centre for Global Energy Studies in London.
That’s one danger facing Libyan oil fields. As Iraqi forces under Saddam Hussein withdrew from Kuwait during the first Gulf war, they burned oil wells, Drollas noted.
The United Nations on Friday authorized military action in Libya to protect civilians amid fighting between forces loyal to Gadhafi and rebels seeking an end to his rule. Fighting is mostly concentrated in eastern Libya -- where most of the country’s oil’s production is located. Even the most optimistic analysts don’t expect Libyan oil back on line until after the first half of the year.
Output has already been severely curtailed. Most estimates point to production down by about 1 million barrels a day, J.P. Morgan said in a note to clients Monday. Production before the uprising was estimated around 1.6 million to 1.8 million barrels a day, mostly exported to Europe and, to a lesser degree, to Asia.
“U.N. sanctions have effectively imposed an embargo on Libyan exports. Based on the experience in Iraq, we continue to emphasize Libyan production will remain low and volatile for many years,” they said.
Support for crude-oil prices is likely to rise as demand ramps up ahead of the Northern hemisphere summer, although experts say most of Libya’s strife has been factored into the recent high prices for oil futures.
Oil futures for April delivery /quotes/comstock/21n!f:cl\j11 (CLJ11 102.21, -0.12, -0.12%) rose 1.3% to $103.33 a barrel on the New York Mercantile Exchange Monday, extending the year’s gains to roughly 13%. Oil topped the $100 mark as some pro-democracy protests in North Africa and the Middle East turned to violent conflicts with the ruling regimes, particularly in Libya. Brent crude, the European benchmark, has shot even higher.
Iraq comparisons
Iraq’s oil output following the wars is serving as a model for energy analysts trying to determine how long Libyan oil could be unavailable to European and other refiners.
Production in Iraq was around 2.5 million barrels a day right before the invasion in March 2003
It was back at such levels only in 2007, Drollas said. Recent estimates put Iraq’s current production at 2.8 million barrels a day, Drollas added.
In Libya, much hinges on how the oil installations fare as the battles rage on, and how soon foreign workers will be able to return to the country, said Samuel Ciszuk, a senior Middle East energy analyst at IHS Global Insight in London.
Oil installations near the town of Ras Lanuf have been damaged as the conflict escalated, but experts say most infrastructure has been spared.
As for replacements for Libya’s light, sweet crude, the world has available oil from Nigeria and Angola, which are similar to Libyan oil. Unlike 2008, when Nigerian oil disruptions contributed to the record high oil price, these and other African countries have been able to keep their production, he said.
Some of the heavier Saudi Arabian oil, although not a perfect substitute, is also appropriate for refineries previously using Libyan oil with the addition of natural gas liquids and other liquid hydrocarbons.
But the full price impact of the conflict in Libya may yet to be seen, said Sarah Emerson, managing director of Energy Security Analysis Inc. in Massachusetts.
“We’re in the shoulder season,” she said. Heading to peak season, there may not be enough light, sweet oil to go around, she added. “We may not have the right quality at the right time of the year.”
More sophisticated refineries in Europe and elsewhere are able to process heavier crude but there’s only so much tweaking refiners will be able to do, Emerson said.
Switching grades “is more than a little throw off. We lost a very specific light sweet crude and it is not that easy to replace it.”
The spectrum of another conflict elsewhere in the world also haunts markets.
“The extra capacity (from Saudi Arabia) is there but it tights up the world capacity,” Drollas said. If oil suffers another shock somewhere, “then we are back at 2008.”
Oil hit a record high in the summer of 2008, when it soared to $147 a barrel only to fall to below $50 before the year was out.
Oil around $150 a barrel this year would mean “a slip back into the recession next year,” Drollas said. Prices are at a level they may be already hurting global growth, he added.
The only possible resolution for the conflict is a Libya without Gadhafi, Drollas said. “A wounded Gadhafi is worse, metaphorically speaking,” he said.
Claudia Assis is a San Francisco-based reporter for MarketWatch
Link
http://www.marketwatch.com/
[Oil and Gas Post] - Fuel duty may be frozen, hints George Osborne
Fuel duty may be frozen, hints George Osborne
20 March 2011 Last updated at 15:29 GMT
The government may scrap the rise in fuel duty planned for next month, it has hinted.
'Nonsense'
A freeze on fuel duty has been widely anticipated.
The price of petrol has risen sharply in recent weeks to more than £1.30 a litre on average.
The is largely due to increases in the price of oil due to concerns about supply because of unrest in the Middle East and Libya.
Most observers say they expect the price of both petrol and diesel to continue rising, and motoring organisations such as the RAC have called on the government to scrap the planned rise in duty due to take effect in April.
It is due to go up by inflation plus 1p, making a total rise of about 4p per litre.
Others said Mr Osborne should look beyond the cost of fuel.
"The chancellor should tackle the impact of rising fuel prices by focusing on the root of the problem - the UK's economic addiction to oil," said Simon Bullock at Friends of the Earth.
"Urgent measures are needed to make public transport cheaper and more convenient, encourage greener motoring and reduce our dependency on car travel."
Youth unemployment
Shadow chancellor Ed Balls, also speaking on The Andrew Marr Show, reiterated his call for the government to reverse the VAT increase on petrol.
He said it was "nonsense" to argue that the European Union would not permit such a reverse.
The government increased the VAT rate in January from 17.5% to 20%.
Mr Osborne also said he would make available additional help for teenagers to gain access to apprenticeships and "high quality vocational education".
The unemployment rate for 18-24 year olds is currently at a record high of 18.3%.
Link
http://www.bbc.co.uk/
20 March 2011 Last updated at 15:29 GMT
The government may scrap the rise in fuel duty planned for next month, it has hinted.Chancellor George Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.
He said he understood the pressure motorists were under from record-high petrol prices.
Mr Osborne also said the Budget would contain measures to help tackle record-high youth unemployment.
A freeze on fuel duty has been widely anticipated.
The price of petrol has risen sharply in recent weeks to more than £1.30 a litre on average.
The is largely due to increases in the price of oil due to concerns about supply because of unrest in the Middle East and Libya.
Most observers say they expect the price of both petrol and diesel to continue rising, and motoring organisations such as the RAC have called on the government to scrap the planned rise in duty due to take effect in April.
It is due to go up by inflation plus 1p, making a total rise of about 4p per litre.
Others said Mr Osborne should look beyond the cost of fuel.
"The chancellor should tackle the impact of rising fuel prices by focusing on the root of the problem - the UK's economic addiction to oil," said Simon Bullock at Friends of the Earth.
"Urgent measures are needed to make public transport cheaper and more convenient, encourage greener motoring and reduce our dependency on car travel."
Youth unemployment
Shadow chancellor Ed Balls, also speaking on The Andrew Marr Show, reiterated his call for the government to reverse the VAT increase on petrol.
He said it was "nonsense" to argue that the European Union would not permit such a reverse.
The government increased the VAT rate in January from 17.5% to 20%.
Mr Osborne also said he would make available additional help for teenagers to gain access to apprenticeships and "high quality vocational education".
The unemployment rate for 18-24 year olds is currently at a record high of 18.3%.
Link
http://www.bbc.co.uk/
[Oil and Gas Post] - Gasoline Shipping Profit Seen Rising 24% After Earthquake: Freight Markets
Gasoline Shipping Profit Seen Rising 24% After Earthquake: Freight Markets
By - Mar 22, 2011 4:28 PM GMT+0700
Profit from shipping gasoline to the U.S. from Europe in the second quarter will rise 24 percent as disruptions to Japanese imports divert cargoes across the Atlantic, increasing demand for vessels.
Forward freight agreements, traded by brokers and used to hedge or bet on future transport rates, will rise to $14,000 a day on the route, from $11,252 yesterday, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo. His recommendations on stocks of shipping lines returned 24 percent in the past six months, data compiled by Bloomberg show.
The March 11 earthquake and tsunami that battered Japan closed petrochemical plants that buy European naphtha, an oil product than can be converted into gasoline or used to make plastics. European refiners will need to find alternative markets while those plants remain shut, increasing demand and profit for vessels in the Atlantic Ocean at a time when earnings in most shipping markets are slumping.
“It’s highly likely that a surplus of gasoline or naphtha or both will develop in Europe,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by e-mail March 18. “Refiners will want to export as much of that as possible to the U.S. to support domestic margins.”
Japanese petrochemical plants use naphtha to make ethylene, a material for plastics, and about 22 percent of capacity was curbed by the March 11 disaster, according to Purvin & Gertz Inc., an energy consultant based in Houston. Japan is the second-biggest ethylene producer in Asia after China, data compiled by Bloomberg show. European naphtha shipments to Asia will probably slump by 78 percent to 100,000 metric tons this month, a Bloomberg survey of five traders showed.
Energy Consultant
“The outlook for naphtha is very bearish as six petchem plants are offline and much of the manufacturing activity at Sony, Toyota, Toshiba, etc., has been halted,” Richard Gorry, a director at Vienna-based JBC Energy GmbH, a consultant and researcher, said by phone March 18.
For European refineries, that means a glut of naphtha and one way of dealing with the surplus is to blend it into gasoline and then ship it to the U.S., the largest fuel market, according to Tchilinguirian.
Gasoline at New York Harbor cost as much as 6 percent more than in Europe yesterday, according to data compiled by Bloomberg. The spread is wide enough to allow traders to ship the fuel profitably across the Atlantic Ocean, according to RS Platou Markets AS and Pareto Securities AS, both Norwegian investment banks.
More Cargoes
More cargoes means more demand for the 590-foot tankers used on the route, operated by companies including Copenhagen- based Torm A/S, Europe’s biggest publicly traded oil-products shipping line. Mitsui O.S.K. Lines Ltd., based in Tokyo, and A.P. Moeller-Maersk A/S, headquartered in Copenhagen, also own the vessels, known as medium-range tankers.
Traders of freight forwards are already anticipating the surge in demand in the Atlantic, with second-quarter contracts jumping 8.8 percent on March 18, according to Imarex ASA, an Oslo-based broker of the derivatives.
Rental income on the route jumped 79 percent this year as demand strengthened, according to the Baltic Exchange in London, which publishes rates for more than 50 maritime routes. That beat the 6.6 percent advance in the Baltic Clean Tanker Index, a gauge of six different routes. Returns in the spot, or single voyage, market rose 1.1 percent to $14,607 a day yesterday, Baltic Exchange data show.
Volatile Rates
Rates are volatile, moving 10 percent or more in all but six of the last 31 months. They doubled in four of those months.
The improving returns on medium-range tankers contrasts with a decline for other parts of the merchant fleet. Income on capesizes, used to haul coal and iron ore, slumped 54 percent this year while returns for supertankers carrying crude fell 18 percent, Baltic Exchange data show. Container shipping costs climbed 26 percent, according to a gauge from the Hamburg Shipbrokers’ Association.
Naphtha and gasoline are part of the so-called light-end products derived from crude, accounting for about 35 percent of the total depending on the type of crude and the refinery used to process it, according to data compiled by Bloomberg.
Refineries produce naphtha when they process crude oil. This in turn is split into heavy and light naphtha. While the light variety is more commonly used by the petrochemicals industry, it can be blended into gasoline, said Mike Lazer, vice president of KBC Market Services, an adviser to the energy industry based in Walton-on-Thames, England. Heavy naphtha can be made into gasoline with the addition of high octane components that make it more combustible, he said.
Premium Demanded
As refineries and factories in Japan shut down this month, the premium demanded for naphtha in Asia relative to Europe fell to $13.97 a barrel so far this month from $15.21 last month, according to data from PVM Oil Associates Ltd., a London-based broker. The premium allows traders in Europe to pay for shipping costs and profit from sending cargoes to Asian customers.
European refiners are losing about $8 for each barrel of naphtha they make and earn about $5 for every barrel of gasoline, according to data compiled by Bloomberg.
More gasoline cargoes to the U.S. may mean more business for Torm, a company founded in 1889 that now operates a fleet of about 130 product tankers of various sizes, carrying everything from jet fuel to diesel. The shares slumped 21 percent this year and the company said March 10 it would probably report a third consecutive annual loss in 2011. Just three of the 12 analysts covering the company and tracked by Bloomberg rate it a “buy.”
Head of Tankers
Tina Revsbech, head of tankers at Torm, said it was too soon to say whether transatlantic cargoes would increase as a result of the events in Japan.
Global shipments of oil products, including naphtha, will advance 3 percent this year, according to data from Clarkson Research Services Ltd., part of the world’s largest shipbroker. The fleet will expand 9 percent to 114.9 million deadweight tons, a measure of carrying capacity, Clarkson estimates.
The prospects for earnings on at least one route may be better than that ratio suggests.
“The product tanker market is expected to move higher in the wake of the Japanese earthquake,” said Stavseth of Arctic Securities. “When Japan stops importing there’s an excess and it really shifts the trade volumes.”
To contact the reporters on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
Link
http://www.bloomberg.com/
By - Mar 22, 2011 4:28 PM GMT+0700
Profit from shipping gasoline to the U.S. from Europe in the second quarter will rise 24 percent as disruptions to Japanese imports divert cargoes across the Atlantic, increasing demand for vessels.
Forward freight agreements, traded by brokers and used to hedge or bet on future transport rates, will rise to $14,000 a day on the route, from $11,252 yesterday, said Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo. His recommendations on stocks of shipping lines returned 24 percent in the past six months, data compiled by Bloomberg show.
The March 11 earthquake and tsunami that battered Japan closed petrochemical plants that buy European naphtha, an oil product than can be converted into gasoline or used to make plastics. European refiners will need to find alternative markets while those plants remain shut, increasing demand and profit for vessels in the Atlantic Ocean at a time when earnings in most shipping markets are slumping.
“It’s highly likely that a surplus of gasoline or naphtha or both will develop in Europe,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by e-mail March 18. “Refiners will want to export as much of that as possible to the U.S. to support domestic margins.”
Japanese petrochemical plants use naphtha to make ethylene, a material for plastics, and about 22 percent of capacity was curbed by the March 11 disaster, according to Purvin & Gertz Inc., an energy consultant based in Houston. Japan is the second-biggest ethylene producer in Asia after China, data compiled by Bloomberg show. European naphtha shipments to Asia will probably slump by 78 percent to 100,000 metric tons this month, a Bloomberg survey of five traders showed.
Energy Consultant
“The outlook for naphtha is very bearish as six petchem plants are offline and much of the manufacturing activity at Sony, Toyota, Toshiba, etc., has been halted,” Richard Gorry, a director at Vienna-based JBC Energy GmbH, a consultant and researcher, said by phone March 18.
For European refineries, that means a glut of naphtha and one way of dealing with the surplus is to blend it into gasoline and then ship it to the U.S., the largest fuel market, according to Tchilinguirian.
Gasoline at New York Harbor cost as much as 6 percent more than in Europe yesterday, according to data compiled by Bloomberg. The spread is wide enough to allow traders to ship the fuel profitably across the Atlantic Ocean, according to RS Platou Markets AS and Pareto Securities AS, both Norwegian investment banks.
More Cargoes
More cargoes means more demand for the 590-foot tankers used on the route, operated by companies including Copenhagen- based Torm A/S, Europe’s biggest publicly traded oil-products shipping line. Mitsui O.S.K. Lines Ltd., based in Tokyo, and A.P. Moeller-Maersk A/S, headquartered in Copenhagen, also own the vessels, known as medium-range tankers.
Traders of freight forwards are already anticipating the surge in demand in the Atlantic, with second-quarter contracts jumping 8.8 percent on March 18, according to Imarex ASA, an Oslo-based broker of the derivatives.
Rental income on the route jumped 79 percent this year as demand strengthened, according to the Baltic Exchange in London, which publishes rates for more than 50 maritime routes. That beat the 6.6 percent advance in the Baltic Clean Tanker Index, a gauge of six different routes. Returns in the spot, or single voyage, market rose 1.1 percent to $14,607 a day yesterday, Baltic Exchange data show.
Volatile Rates
Rates are volatile, moving 10 percent or more in all but six of the last 31 months. They doubled in four of those months.
The improving returns on medium-range tankers contrasts with a decline for other parts of the merchant fleet. Income on capesizes, used to haul coal and iron ore, slumped 54 percent this year while returns for supertankers carrying crude fell 18 percent, Baltic Exchange data show. Container shipping costs climbed 26 percent, according to a gauge from the Hamburg Shipbrokers’ Association.
Naphtha and gasoline are part of the so-called light-end products derived from crude, accounting for about 35 percent of the total depending on the type of crude and the refinery used to process it, according to data compiled by Bloomberg.
Refineries produce naphtha when they process crude oil. This in turn is split into heavy and light naphtha. While the light variety is more commonly used by the petrochemicals industry, it can be blended into gasoline, said Mike Lazer, vice president of KBC Market Services, an adviser to the energy industry based in Walton-on-Thames, England. Heavy naphtha can be made into gasoline with the addition of high octane components that make it more combustible, he said.
Premium Demanded
As refineries and factories in Japan shut down this month, the premium demanded for naphtha in Asia relative to Europe fell to $13.97 a barrel so far this month from $15.21 last month, according to data from PVM Oil Associates Ltd., a London-based broker. The premium allows traders in Europe to pay for shipping costs and profit from sending cargoes to Asian customers.
European refiners are losing about $8 for each barrel of naphtha they make and earn about $5 for every barrel of gasoline, according to data compiled by Bloomberg.
More gasoline cargoes to the U.S. may mean more business for Torm, a company founded in 1889 that now operates a fleet of about 130 product tankers of various sizes, carrying everything from jet fuel to diesel. The shares slumped 21 percent this year and the company said March 10 it would probably report a third consecutive annual loss in 2011. Just three of the 12 analysts covering the company and tracked by Bloomberg rate it a “buy.”
Head of Tankers
Tina Revsbech, head of tankers at Torm, said it was too soon to say whether transatlantic cargoes would increase as a result of the events in Japan.
Global shipments of oil products, including naphtha, will advance 3 percent this year, according to data from Clarkson Research Services Ltd., part of the world’s largest shipbroker. The fleet will expand 9 percent to 114.9 million deadweight tons, a measure of carrying capacity, Clarkson estimates.
The prospects for earnings on at least one route may be better than that ratio suggests.
“The product tanker market is expected to move higher in the wake of the Japanese earthquake,” said Stavseth of Arctic Securities. “When Japan stops importing there’s an excess and it really shifts the trade volumes.”
To contact the reporters on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
Link
http://www.bloomberg.com/
[Oil and Gas Post] - Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya
Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya
By - Mar 22, 2011 4:22 PM GMT+0700
Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political unrest in North African and the Middle East may be confined to Libya.
Futures slipped after climbing as much as 0.3 percent as demonstrators in Yemen spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
“The unrest in Libya seems to be priced in almost completely by now,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an interview with Bloomberg television. “The price will stay at elevated levels of around $110 to $120 for several months and will drop back to $90 by the year-end.”
Crude for April delivery on the New York Mercantile Exchange was at $102.05 a barrel, down 28 cents, at 9:15 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures were down 22 cents at $102.87 a barrel. Brent oil for May settlement was at $114.65, down 31 cents, on the ICE Futures Europe exchange in London after rising as much as 0.5 percent. The spread between the two May contracts narrowed to $11.80 a barrel from $11.87 yesterday.
Regional Unrest
Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as political risks increased, analysts led by Michael Wittner said in a report dated yesterday.
Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as the opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.”
Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.
Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York.
Protest in Yemen
Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data.
Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader.
Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests.
Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.”
Short-Term Drop
“The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said.
Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China.
To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
Link
http://www.bloomberg.com/
By - Mar 22, 2011 4:22 PM GMT+0700
Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political unrest in North African and the Middle East may be confined to Libya.
Futures slipped after climbing as much as 0.3 percent as demonstrators in Yemen spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
“The unrest in Libya seems to be priced in almost completely by now,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an interview with Bloomberg television. “The price will stay at elevated levels of around $110 to $120 for several months and will drop back to $90 by the year-end.”
Crude for April delivery on the New York Mercantile Exchange was at $102.05 a barrel, down 28 cents, at 9:15 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures were down 22 cents at $102.87 a barrel. Brent oil for May settlement was at $114.65, down 31 cents, on the ICE Futures Europe exchange in London after rising as much as 0.5 percent. The spread between the two May contracts narrowed to $11.80 a barrel from $11.87 yesterday.
Regional Unrest
Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as political risks increased, analysts led by Michael Wittner said in a report dated yesterday.
Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as the opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.”
Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.
Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York.
Protest in Yemen
Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data.
Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader.
Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests.
Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.”
Short-Term Drop
“The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said.
Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China.
To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
Link
http://www.bloomberg.com/
[Oil and Gas Post] - Samsung wins $2.76 bn project in Saudi Arabia
Samsung wins $2.76 bn project in Saudi Arabia
SEOUL: South Korea's Samsung Engineering Co. said Tuesday it had signed a $2.76 billion deal to build a natural gas liquid complex in eastern Saudi Arabia .
Under the deal signed with Saudi Arabia's state-run oil company, Aramco , Samsung Engineering will complete the complex in Shaybah oil and gas field by June 2014.
The plant will produce 750,000 barrels of crude oil and more than 200,000 barrels of natural gas liquids a day.
Samsung Engineering has now secured five projects worth a total of $5 billion, including a power plant project in Wasit, 50 kilometres (30 miles) north of the industrial city of Jubail.
Link
http://economictimes.indiatimes.com/
SEOUL: South Korea's Samsung Engineering Co. said Tuesday it had signed a $2.76 billion deal to build a natural gas liquid complex in eastern Saudi Arabia .
Under the deal signed with Saudi Arabia's state-run oil company, Aramco , Samsung Engineering will complete the complex in Shaybah oil and gas field by June 2014.
The plant will produce 750,000 barrels of crude oil and more than 200,000 barrels of natural gas liquids a day.
Samsung Engineering has now secured five projects worth a total of $5 billion, including a power plant project in Wasit, 50 kilometres (30 miles) north of the industrial city of Jubail.
Link
http://economictimes.indiatimes.com/
[Oil and Gas Post] - Japan’s Coal, Gas Demand to Rise After Quake, New Hope Says
Japan’s Coal, Gas Demand to Rise After Quake, New Hope Says
March 22, 2011, 2:07 AM EDT
By Elisabeth Behrmann
(Updates to add closing share price in fourth paragraph.)
--Editors: Keith Gosman, Andrew Hobbs
To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
Link
http://www.businessweek.com/
March 22, 2011, 2:07 AM EDT
By Elisabeth Behrmann
(Updates to add closing share price in fourth paragraph.)
March 22 (Bloomberg) -- Japan’s coal and natural gas demand is likely to rise after the nation’s biggest earthquake this month knocked out nuclear-powered generators, said New Hope Corp., an Australian coal producer.
“I would expect increased requirements to burn coal and gas over the next few years,” Robert Neale, chief executive officer of the Ispwich, Queensland-based company, said today in a phone interview. Coking coal, in particular, would be needed “because you’ll have at least five or more years of reconstruction, which is going to require steel,” he said.
Japan, which depends on imported fuel for most of its needs, is seeking alternatives to nuclear power after the March 11 quake forced the shutdown of 11 reactors. Five years may be needed to rebuild after the disaster, the World Bank said.
New Hope fell 0.2 percent to A$4.89 at the 4:10 p.m. close in Sydney trading. Shares in the company have risen 0.8 percent this year, compared with the benchmark S&P/ASX 200 Index’s 2.2 percent fall.
New Hope reported first-half profit of A$407 million ($409 million), a rise of more than fourfold following the sale of the company’s stake in Arrow Energy Ltd. The company has a cash balance of about A$1.6 billion following the A$238 million acquisition of Northern Energy Ltd., Neale said.
Demand for coal will rise to make up for the lost nuclear capacity because it’s cheaper than oil and gas, and also due to negative public sentiment toward nuclear power, Andrew Harrington, an analyst Patersons Securities Ltd., said in a report. “We believe that the negativity surrounding nuclear energy will see increased demand for fossil fuels including and especially coal.”
Coal producers likely to benefit from increased demand include Gloucester Coal Ltd., New Hope, Whitehaven Coal Ltd. as well as developers Aston Resources Ltd., Cockatoo Coal Ltd. and Riversdale Mining Ltd., said Harrington.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
Link
http://www.businessweek.com/
Subscribe to:
Posts (Atom)