Shipping and Energy Markets Weekly 9-15 March 2012

  Shipping and Energy Markets Weekly is a summary of the past week’s major news headlines and the key indicators that may influence the shipping industry (particularly the tanker segment) and the energy market. The information is structured into categories to help a reader to navigate in the news as well as to evaluate the magnitude of potential impact on the business. The objective of this weekly summary is to provide professional audience with a quick, relevant and timely overview of the main economic and geopolitical factors that may have an impact on the shipping and energy markets. Macro Economics Jobless Claims in U.S. Decrease, Matching Four-Year Low Claims for jobless benefits dropped last week to match a four-year low and U.S. consumer confidence rose to the highest since 2008, signalling an improving labour market may boost household spending. (Bloomberg, 15/3) Hungary aid frozen by EU over budget deficit The European Union has decided to suspend 495m euros ($655m; £417m) of funds due next year to Hungary, because of the country’s budget deficit. (BBC, 13/3) Italy in recession, headache for Prime Minister Monti Italy is in recession, final data confirmed on Monday, underscoring the difficulties facing Mario Monti’s technocrat government as it grapples with a shrinking economy dragged down by austerity measures and a debt crisis. (Reuters, 12/3) Euro zone economy prospects show flicker of hope The euro zone is showing tentative signs of improvement, the latest monthly readout from the Organization for Economic Co-operation and Development (OECD) showed on Monday. (Reuters, 12/3) China reports large trade deficit as imports surge China posted its largest trade deficit in at least a decade in February, after imports of commodities jumped as companies built up supplies. (BBC, 12/3)     2.  Energy Markets Energy & Oil Prices 15th of Mar 2012 *Changes since previous price report OIL ($/bbl) PRICE US$ CHANGE* % CHANGE TIME Nymex Crude Future 105.41 -0.02 -0.02% 16:13 Dated Brent Spot 123.03 -2.03 -1.63% 16:20 WTI Cushing Spot 105.11 -0.32 -0.30% 16:14 Source: Bloomberg Europe needs to standardize on biofuels, says industry Europe needs to standardize its requirements for bioadditives for fuels, industry executives said at the European Fuels Conference in Paris. (Platts, 15/3) African oil production increasing except from South Sudan Oil production is gradually increasing in African countries — apart from South Sudan, the International Energy Agency said in its latest report Wednesday. (Platts, 14/3) Oil Declines on Cushing Inventories, Saudi Supply Pledge Oil fell as inventories at Cushing, Oklahoma, rose to the highest level in nine months and Saudi Arabia sought to ease concern that tension with Iran would disrupt supplies. (Bloomberg, 14/3) Chinese Refinery Runs Increase China’s refinery runs averaged 9.35 million b/d in January and February combined, according to International Oil Daily’s calculations of data from the National Bureau of Statistics. (Energy Intelligence, 12/3) Japan to remain net gasoline importer in short term Japan is expected to remain a net gasoline importer throughout most of this year, even though the country is now close to restoring all of the refining capacity lost after the devastating earthquake and tsunami that struck on March 11, 2011. (Platts, 12/3) Brent Crude Oil and WTI Crude oil – historical data crude oil historical update, 16 March 2012 Source: LiveCharts.co.uk Politics/geopolitics Obama Spokesman Says No Agreement on Releasing Oil Reserves The U.S. and the U.K. haven’t reached any agreement on releasing strategic oil reserves or set a timetable for action, White House press secretary Jay Carney said. (Bloomberg, 15/3) Iran’s banks to be blocked from global banking system Swift, the body that handles global banking transactions, says it will cut Iran’s banks out of the system on Saturday to enforce sanctions. (BBC, 15/3) EU Considers Allowing Insurance for Tankers Sailing to Iran The European Union may allow insurance against risks such as collisions and spills for tankers carrying Iranian oil, a proposal that would ease curbs on the nation’s crude exports. (Bloomberg, 14/3) Iran Says West Is Using Oil as Political Weapon Iran (OPCRIRAN)’s oil minister played down prospects of war and denied his country was losing oil income due to sanctions on its nuclear program, while blaming western nations for soaring international fuel prices. (Bloomberg, 14/3) China May Allow Private Firms to Import Products China is considering allowing private companies to import gasoline and diesel as long as they meet certain pre-requisites set by the government, several industry officials told International Oil Daily. The opening of oil products imports to private companies may take place as early as June, according to local media reports. (Energy Intelligence, 12/3) News from oil majors and oil/gas Industry Shell says offshore Australia’s Prelude FLNG on track for 2017 Shell’s Prelude floating LNG production project offshore Australia is on track for operations around 2017, but the project is under no schedule pressure to be the first operating FLNG facility to hit the water, Shell said Wednesday at a technology briefing in The Hague, the Netherlands. (Platts, 15/3) Russia’s Gazprom sells 80% stake in unused Baltic LNG site to Sibur petrochemical group Russian gas giant Gazprom has sold its 80% holding in the Baltic LNG project to the Sibur petrochemical group, Baltic LNG general director Alexander Krasnenkov said in an interview published in Gazprom’s corporate magazine Wednesday. (Platts, 14/3) Total, Kuwait sign MOU on China refining, petrochemicals joint venture Total and Kuwait Petroleum Corporation on Tuesday signed a memorandum of understanding on a refining and petrochemicals joint venture in southern China in partnership with Chinese state-owned refiner Sinopec, the French major said. (Platts, 14/3) NuStar Texas City terminal hits 2.82 mil barrels with expansion When NuStar Energy brings online in April its newest fuel oil storage tank at its now 2.82 million-barrel capacity Texas City, Texas, terminal, it will mark the completion a multi-year expansion project designed to create the “premier US Gulf Coast black oil hub,” a company spokesman said Wednesday. (Platts, 14/3) Repsol: Mexico LNG regasification plant to get first shipment next week After a seven-month delay, an initial shipment of LNG from Repsol’s Camisea project in Peru will be delivered late next week to Mexico’s newest regasification terminal at Manzanillo on the Pacific Coast, the state of Colima said Friday. (Platts, 09/3) Shipping News Busy US Gulf props up MR product tanker market OIL products flowed out of the US Gulf on medium range product tankers this week, creating the busiest global spot market for the vessels and underscoring a change in trade dynamics in the Atlantic as the US cements its new role as a net exporter. (Lloyd’s List, 15/3) Economou to pull tonnage from Heidmar Greek shipping magnate George Economou is planning to pull up to 27 tankers out of the Heidmar pools over the next year or so in a strategic move that sees his group reposition itself as a heavyweight player in the wet trades. (Lloyd’s List, 15/3) Russian oil taxes threaten North European aframax markets Aframax owners’ earnings in northern Europe could take a beating this year as Russian exports decline due to tax measures that discourage trade in crude oil. (Lloyd’s List, 14/3) VLCC spot market boosted by Chinese imports from Africa Chinese charterer Day Harvest showed how eager China is for West African oil after it paid a top rate this week to secure a very large crude carrier to load in Nigeria next month. Lloyd’s List, 14/3) NWE naphtha cracks, backwardation at new lows on closed arbitrage to Asia Northwest Europe naphtha cracks and the balance-month, front-month backwardation have touched new lows as the arbitrage from the Mediterranean to Asia is now closed, sources said. (Platts, 14/3) Big Appetite for LNG Continues in Post-Fukushima Japan Japan continues to consume more LNG than it did pre-Fukushima as power utilities turn to alternative fuels to plug the loss of nuclear power output. (Energy Intelligence, 14/3) Rotterdam bunker fuel soars to new all-time high Rotterdam high sulfur 380 CST bunker fuel was assessed at $727.50/mt Tuesday, the highest level since Platts records for the product began on January 2, 1990. (Platts, 14/3) US Oil and Product inventories   Bunker prices Bunker prices are in USD   IFO380 * IFO180 * MDO * MGO * Singapore 736.00 ↓ 745.50 ↓ 1,016.00 ↓ 1,023.50 ↓ Rotterdam 716.50 ↓ 738.00 ↓ -   1,033.00 ↑ Houston 724.50 ↓ 765.00 ↑ 1,052.50 ← 1,050.00 ← Fujairah 741.50 ↓ 764.00 ↓ -   1,049.00 ↓ Los Angeles 743.00 ← 773.00 ← 1,102.50 ← 1,104.00 ↑ * The bunker-price movement from previous adjustment (Bunkerworld)