European marine biodiesel: Prices fall
European marine biodiesel prices fell under pressure from limited demand and lower values in the underlying markets in the week's opening session.
In northwest Europe, participants pointed to lacklustre spot marine biodiesel demand. Shipowners with scrubber-fitted vessels were looking to purchase high-sulphur fuel oil (HSFO)-based marine biodiesel blends in recent sessions. In the Mediterranean, suppliers told Argus that the bulk of enquiries received was for very-low sulphur fuel oil (VLSFO) blends. But overall spot demand was limited in the region.
The east-west marine biodiesel spread — the premium held by B30 used cooking oil methyl ester (Ucome) dob ARA to B24 Ucome dob Singapore — narrowed by $4/t to $101/t at the close, a two-week low.
In the underlying fossil markets, the front-month Ice Brent crude and Ice gasoil futures contracts eased at 16:30 BST. In the underlying biodiesel markets, Argus assessments for Advanced fatty acid methyl ester (Fame) 0 barges fell while the price of Dutch renewable tickets (HBE-Gs) remained firm to weigh on marine biodiesel blend prices in the Netherlands.
EU emissions trading system (ETS) prices increased to $73.20/t from $72.25/t. But ETS-inclusive premiums held by marine biodiesel blends against their fossil counterparts diverged.
B24 dob Algeciras-Gibraltar prices fell by $5/t to $790/t, but its premium against VLSFO with the inclusion of ETS costs widened by $4.71/t to $199.86/t. B30 used cooking oil methyl ester (Ucome) dob ARA values decreased by $4/t to $817/t but the blend's ETS-inclusive premium against VLSFO dob ARA gained $4.14/t to $242.82/t.
Calculated B30 Advanced Fame 0°C CFPP dob ARA prices — which include a deduction of the value of Dutch HBE-G renewable fuel tickets — slipped by $10.93/t to $752.39/t, and the blend's ETS-incorporated premium against VLSFO decreased by $2.79/t to $178.22/t. Calculated B100 Advanced Fame 0 dob ARA values declined by $16.58/t to $1,141.98/t, and its premium against MGO narrowed by $19.30/t to $338.11/t when ETS costs were accounted for, the narrowest premium since 12 June.
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Production cuts lift Asian seaborne bitumen values
Production cuts lift Asian seaborne bitumen values
Singapore, 12 September (Argus) — Tighter export supplies from production cuts and firmer import demand from southeast Asia has lifted seaborne Asian bitumen prices to their highest level since last year's final quarter. Argus assessed the weekly fob Singapore ABX 1 at $452.50/t on 6 September, the highest since early December 2023 and up by $7/t from the previous week. Argus assessed the weekly fob South Korea ABX 2 at $446/t on 6 September, the highest since the end of October 2023 and up by $3.50/t from a week earlier. Argus assessed weekly fob Thailand and fob Taiwan prices at $450/t on 6 September, up by $7.50/t from the previous week. This was their highest since mid-November and early December respectively. Export supplies have been curbed from Singapore, South Korea, Thailand and Taiwan since this year's second quarter because of strong high-sulphur fuel oil (HSFO) prices and weaker export margins . The daily fob Singapore ABX 1 was trading at a discount of about $75-80/t to 3.5pc 380cst HSFO fob Singapore values in March. The discount widened to $107.75/t to HSFO on 5 July, the widest this year. Enquiries were weak especially from monsoon-hit Vietnam , with higher availability of relatively cheaper Middle East-origin cargoes also depressing domestic values and reducing buying capacity. Import demand from south China continues to be weak from higher inventories and limited consumption. This is despite its existing production cuts. Only Indonesia was seeking some volumes to restock. Some Indonesian importers have been seeking October-December laycan cargoes in advance before Singapore's export supplies dry up, ahead of the year-end peak demand season. At least two importers have issued import tenders to secure October cargoes. But drier weather and the return of some national highway and maintenance projects in central and north Vietnam, along with unusually higher domestic demand in Thailand , increased enquiries for Singapore and Taiwan cargoes this quarter that supported prices. Importers from southeast Asia are also seeking other Asia-origin cargoes. This strengthened enquiries for South Korea-origin cargoes , for which southeast Asia is not a major market. Prolonged weak demand from traditional importer east China because of competitive domestic offers made South Korean cargoes available for southeast Asian buyers but demand continued to outpace supplies. Limited output At least two of three refineries in Singapore were under partial turnaround this quarter. The Singapore Refining Company's 290,000 b/d refinery is expected to return towards the end of September, while Shell's 237,000 b/d Pulau Bukom refinery is estimated to resume around mid-October. A Yeosu-based refiner in South Korea issued a tender to sell about 5-6 cargoes each month for loading across the fourth quarter from its 800,000 b/d refinery. But an Onsan-based 669,000 b/d refiner did not issue an export tender for September-laycan cargoes for unspecified reasons. Market participants are unsure if an export tender for October cargoes will be issued. Export supplies from Taiwan were also limited with refiners mostly catering to their term commitments. Thailand's 275,000 b/d Sriracha refinery and 215,000 b/d Rayong refinery limited production, while the 175,000 b/d Map Ta Phut refinery has opted to produce more fuel oil. A refinery in Malaysia had halted bitumen sales since mid-June because of limited production and is likely to return next month. This increased demand for Singapore-origin tank truck cargoes and some Singapore refiners allocated more volumes for tank truck sales, further limiting export supplies. Export supplies in Asia are expected to be tight in the short term despite seaborne prices currently trading at a premium to HSFO values, market participants close to refiners told Argus , indicating that bitumen production might not increase soon. Bitumen has been at a premium to HSFO values since the end of August. Argus assessed the daily fob Singapore ABX 1 at $460/t on 11 September, at a $48.25/t premium to 3.5pc 380cst HSFO fob Singapore that was assessed at $411.75/t. By Sathya Narayanan, Claire Ng and Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China slowdown drags global oil demand: IEA
China slowdown drags global oil demand: IEA
London, 12 September (Argus) — A sharp slowdown in China continues to weigh on global oil demand growth, the IEA said today. In its latest Oil Market Report (OMR), the IEA sees China's demand increasing by just 180,000 b/d in 2024, compared with its forecast for 300,000 b/d last month and well below the 710,000 b/d it had projected in January. This was the main reason the IEA cut its 2024 global oil demand forecast by 70,000 b/d to 900,000 b/d. The Paris-based agency said year on year gains of just 800,000 b/d in the first half were the lowest since 2020 and based on "actual data received year-to-date." It sees demand growth remaining subdued in 2025 at 950,000 b/d, unchanged from last month's estimate. The gloomy outlook comes after China recorded a fourth consecutive oil monthly consumption decline in July, at 280,000 b/d, the IEA said. The Paris-based agency attributes the slowdown in China's oil use to a "broad-based economic slowdown and an accelerating substitution away from oil in favour of alternative fuels weigh on consumption." China is not the only country where oil demand is weaker than previously anticipated. The IEA halved its US oil demand growth estimate for this year to just 70,000 b/d, noting a sharp drop in gasoline deliveries in June. "With the steam seemingly running out of Chinese oil demand growth, and only modest increases or declines in most other countries, current trends reinforce our expectation that global demand will plateau by the end of this decade," the IEA said. The agency's latest medium term oil outlook sees world oil demand peaking at 105.6mn b/d in 2029. The IEA's latest projections add to concerns about the health of oil demand this year. Even Opec, which had until August kept its highly bullish oil demand forecast unchanged, has trimmed its expectations for this year and next although its 2024 projection of over 2mn b/d demand growth remains well above most other outlooks. Supply surplus incoming The IEA's forecast does not bode well for a plan by some members of Opec+ to start unwinding 2.2mn b/d of voluntary cuts starting in December. "With non-Opec+ supply rising faster than overall demand — barring a prolonged stand-off in Libya — Opec+ may be staring at a substantial surplus [next year], even if its extra curbs were to remain in place," the agency said. The IEA's latest balances show a supply surplus of more than 1mn b/d in 2025. On global supply, the IEA lowered its growth estimate to 660,000 b/d compared with 730,000 b/d last month. But global growth next year could be as high as 2.1mn b/d even if all Opec+ cuts are maintained, the IEA said. The agency said global observed oil stocks declined for a second consecutive month in July, by 47.1mn bl, although it noted a steep build in oil products stocks to the highest since January 2021. The IEA attributes the recent oil price declines to demand-based fears centred on China and noted the falls came despite "hefty supply losses in Libya and continued crude oil inventory draws." By Aydin Calik Global oil demand/supply balance mn b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US summer gasoline demand lagged pre-Covid levels
US summer gasoline demand lagged pre-Covid levels
Houston, 11 September (Argus) — US gasoline demand ended the 2024 summer driving season well below pre Covid-19 pandemic norms and at the lower end of average post-Covid levels. US summer driving season gasoline demand — measured from the last Monday in May to the first Monday in September — averaged 9.1mn b/d this year, according to US Energy Information Administration (EIA) weekly demand data released Wednesday. That is up by 49,000 b/d from the same period in 2023 and up by 291,000 b/d from 2022 but well below the 9.4mn b/d levels in the summer of 2021 when demand surged in the wake of the pandemic as the US economy reopened. In the ten years prior to the pandemic, weekly US gasoline demand averaged 9.3mn b/d in the peak summer months ( See chart) . Even as Americans drive more than ever , demand has failed to keep pace, likely due to increases in the efficiency of internal combustion engines and fully-electric vehicles (EVs) and hybrids comprising a greater portion of the automotive fleet. The weekly EIA data released Wednesday is less accurate than the monthly numbers published by the agency at a lag, but those too have shown summer demand below pre-pandemic levels . Gasoline demand was 9.1mn b/d in June, the most recent monthly data, down by 246,000 b/d from the same month last year and down by 583,000 b/d from June 2019. Future outlook lowered The agency has also downgraded its demand outlook in recent days. On Tuesday it lowered its demand, price and inventory expectations for road fuels such as gasoline in its monthly Short-Term Energy Outlook (STEO). The agency revised down its expectations for gasoline demand in the second and third quarters of this year by 1.1pc and 0.4pc respectively to just over 9.1mn b/d. Demand in the second quarter of next year is expected to be 30,000 b/d higher than this year, but third quarter demand is expected to be 90,000 b/d lower, helping drive an overall 20,000 b/d gasoline demand decline next year. Headed into the third quarter, US refiners have been cutting runs after weaker-than-expected summer gasoline demand raised inventories and narrowed margins. Refiners also take plants offline for maintenance in the fall amid seasonally narrower margins. Access to the export markets could be a hedge against an uncertain domestic demand outlook, and several coastal refineries up for sale in North America could give a buyer access to global markets for the road fuel. US refiners have steadily exported more gasoline since about 2007, sending 298mn bls overseas last year compared to 46mn bls in 2007. By Nathan Risser US summer driving season gasoline demand ’000 b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Korea's SK to begin SAF output at Ulsan in Oct
South Korea's SK to begin SAF output at Ulsan in Oct
London, 11 September (Argus) — South Korean refiner SK Energy said it has completed a dedicated sustainable aviation fuel (SAF) production line at its 840,000 b/d Ulsan refinery and will begin commercial output next month. The firm said it plans to use co-processing methods, integrating bio-feedstocks such as used cooking oil (UCO) and animal fats with traditional oil production processes to produce SAF alongside conventional oil products. A 5km pipeline will feed renewable feedstocks to the refinery, enabling continuous production of SAF and other low-carbon products, SK said. According to the company, it is South Korea's first dedicated SAF facility. SK said it obtained multiple certifications for SAF production and sales in June, including ISCC Corsia, ISCC EU and ISCC Plus. It plans to supply SAF to Korean Air for passenger flights from early 2025. The company will continue to monitor domestic and global policies and market conditions to explore the expansion of its SAF production capabilities, SK's head of strategy division Hong Kwang-pyo said. By Toby Shay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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