• 26 mins ConocoPhillips Sets Price Ceiling For New Projects
  • 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 3 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 3 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 4 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 5 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 6 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 7 days GE Considers Selling Baker Hughes Assets
  • 7 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 10 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 10 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
Alt Text

Are Oil Markets Immune To U.S. Shale?

Oil prices have maintained their…

Alt Text

New Battery Design Could Crush Tesla

Elon Musk’s old rival, Henrik…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Oil Prices Pull Higher As Refiners Soak Up Soaring Crude Imports

Oil tanker

In today's game of rock-paper-scissors from the weekly EIA inventory report, crude inputs were propelled higher (like a rock), blunting the impact of super-strong imports (the scissors). On paper, the crude draw is bullish, but a modest rally is being kept in check somewhat by solid builds to the products. Hark, here are five things to consider in oil markets today:

1) Even though crude imports jumped higher by over 1.1 million barrels per day last week, a climb into unchartered territory by refinery runs meant that crude inventories were drawn down by 3.6 million bbls. Refinery runs jumped to 17.3 million bpd, the highest level on record, as cheap and available crude - as opposed to strong demand - is driving on refining activity. Refinery runs are now a surreal 1.44 million bpd - or 9 percent - higher than year-ago levels:

(Click to enlarge)

2) Crude imports into the three coastal PADDs were exceptionally strong last week, led by stronger flows from the Middle East and Venezuela. Imports from Saudi Arabia and Iraq alone were over 2.8 million barrels per day, the highest weekly level on our records (since at least 2012).

This strength in waterborne arrivals was also boosted by Venezuelan barrels, which accounted for nearly 800,000 bpd of imports last week.

(Click to enlarge)

3) As the Dakota Access pipeline is set to come online mid-next month, it is being suggested that we will see more domestic crude flowing from the U.S. Gulf Coast up to the U.S. East Coast via Jones Act tankers.

The Trainer refinery is a great example of how these domestic waterborne flows have dried up of late. There used to be a regular shuttling of domestic crude from the Gulf Coast to Monroe's Trainer refinery (Monroe is a subsidiary of Delta Airlines), but there hasn't been a domestic loading since January, with Trainer pulling in increasing volumes of Nigerian crude instead:

(Click to enlarge)

4) The chart below shows how Venezuelan demand dropped 17 percent over two years from its peak in 2013 to 2015. According to Philip Verleger, demand may have fallen another 10-15 percent last year, as the Venezuelan economy continues on its downward spiral. A drop in demand is offsetting a drop in domestic production, meaning exports are holding up better than would otherwise be expected.

We agree with the theme of the article; it jibes with something we have highlighted here on a number of occasions: as Venezuela's economy spins out of control, it presents the biggest supply threat to the global market. Related: As Conflict Rages On, Russia Lands Oil Deals In Syria

(Click to enlarge)

5) Finally, stat of the day comes via the LNG market, with just over $700 billion invested in LNG export projects in the past decade. About half of these projects are in Australia. Total global LNG demand is forecast to rise by 40 percent to 364 million tons, up from 260 million tons last year.

While LNG as a marine fuel is only expected to account for ~2 percent of total demand by 2025, cruise companies are starting to order LNG-powered vessels. Carnival, the cruise company, has 107 vessels in its fleet, and has seven vessels on order to run on LNG. LNG-fueled ships are expected to more than double to 200 by 2020 - from just five in 2005 - meaning infrastructure is also going to expand, with bunkering to be built at ports, to support the shipping industry going forward.

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News