• 1 min OPEC, Russia Said To Announce Oil Pact Extension On Nov 30
  • 3 hours Wintershall And LetterOne In Talks For $12B Oil, Gas Merger
  • 5 hours India Exempts State Oil Firms Mergers From Competition Approval
  • 7 hours Turkey Targets $5B Investment In Wind Energy By End-2017
  • 9 hours Weatherford Looks To Sell Assets To Ease Some Of $8B Debt
  • 10 hours OPEC Set To Move Fast On Cut Extension Decision
  • 12 hours Nigeria Makes First Step Away From Oil
  • 1 day Russia Approves Profit-Based Oil Tax For 2019
  • 1 day French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 1 day Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 1 day Oil Production Cuts Taking A Toll On Russia’s Economy
  • 1 day Aramco In Talks With Chinese Petrochemical Producers
  • 1 day Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 2 days Maduro Names Chavez’ Cousin As Citgo Boss
  • 2 days Bidding Action Heats Up In UK’s Continental Shelf
  • 2 days Keystone Pipeline Restart Still Unknown
  • 2 days UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 2 days Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 3 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 3 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 4 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 4 days Thanksgiving Gas Prices At 3-Year High
  • 4 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 4 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 5 days ConocoPhillips Sets Price Ceiling For New Projects
  • 7 days Shell Oil Trading Head Steps Down After 29 Years
  • 7 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 7 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
Alt Text

Short Bets On Oil Spike Ahead Of OPEC Meeting

Short positions in Brent futures…

Alt Text

Oil Prices Nosedive On Bearish IEA Report

Oil prices are cratering after…

Alt Text

WTI Prices Surge On Keystone Spill

The outage at the damaged…

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 Jump On Bullish Inventory Data, Saudi Export Cuts

Oil

After yesterday's monthly EIA report, and tomorrow's monthly OPEC report, the weekly EIA inventory report acts as the filling in this energy data sandwich. While have to wait until next Tuesday (16th) to get the IEA's monthly offering, hark, here are five things to consider in oil markets today:

1) Saudi Arabia's oil minister, Khalid Al-Falih is having his Mario Draghi moment, committing to do 'whatever it takes' to rebalance the crude market, and this effort is being reflected through in Saudi's exports for April, which have dropped considerably versus March.

But as one producer cuts exports, another is boosting them, such is the undulating nature of the global oil market - and of OPEC itself. Hence, Nigeria is preparing to restart the Trans Forcados export pipeline, after it being out of commission for much of the last year. The pipeline was initially attacked by militants last February, and although export loadings recommenced late last year, another militant attack crimped exports once again.

After averaging just over 210,000 bpd of loadings in 2015, the Forcados stream dropped to average just a quarter of that last year. There has only been one vessel to load the grade so far this year, and not from its usual load point. The vessel departed in February, and the cargo was delivered to Monroe's Trainer refinery on the U.S. Atlantic Coast. Exports of the medium sweet grade predominantly head to Europe. Well, at least they used to:

(Click to enlarge) Related: Bullish EIA Inventory Data Boosts Crude Prices

2) According to murmurs and rumors, Saudi Arabia is apparently cutting exports into Asia next month by 7 million barrels. To put this in context, Saudi loaded nearly 140 million barrels per month bound for Asia through the first four months of this year - which is similar pace to last year. This therefore equates to a 5 percent cut in flows to Asia from the kingdom.

This news comes hot on the heels of our April data showing the kingdom has significantly cut exports in April - versus both March's level, and versus the October reference month. The top four importing countries in Asia - Japan, China, South Korea and India - account for some 80 percent of Saudi loadings to the region, and are likely the ones to be impacted:

(Click to enlarge)

3) Last week we highlighted the longer-term demand outlook from the IEA, and how we can expect +1 million bpd of oil demand growth in the coming years, leapfrogging over the 100 million bpd level by the end of the decade.

The chart below highlights more near-term expectations from the agency, and how demand growth this year has been revised higher in April versus January's projection. Despite a considerably weaker-than-expected first quarter, upward revisions for the final three quarters points to annual growth of +1.3mn bpd. This jibes with yesterday's upward revision to demand growth from the EIA:

(Click to enlarge)

4) As Saudi Aramco looks to double its global refining capacity to over 10 million barrels per day over the next decade, it is pursuing a number of strategic relationships at key global demand hubs. After losing out to Rosneft when trying to buy Essar's Vadinar refinery in India last year, it is now in preliminary discussions with India Oil Corp about building a 1.2mn bpd refinery project on India's West Coast.

Just as Saudi Aramco has footholds across the world, such as in the U.S. with with Motiva Enterprises, and in Japan in terms of storage, it is looking to bulk up its presence in the country which is expected to show the most oil demand growth in the coming decades. Related: Libya’s Oil Output Tops 800,000 Bpd For The First Time Since 2014

Saudi currently delivers ~800,000 bpd to India each month, with nearly a half of this heading to Reliance's Jamnager refinery. Deliveries in comparison have been both tiny and sporadic to Essar's Vadinar refinery, and are likely to have stopped altogether now that Rosneft is taking over the refinery:

(Click to enlarge)

5) Finally, the chart below comes from Morgan Stanley (via @georgikantchev), showing that the U.S. oil rig count has risen by an average of 7.3 rigs per week over the last year, making it the strongest recovery in the last 30 years, tracking just higher than the rip-roaring pace seen starting in 2009:

(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