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Vancouver Aframax rates climb to 2-month highs

  • Market: Crude oil, Freight
  • 23/09/24

Aframax rates for Canadian crude oil exports from Vancouver rose to two-month highs last week after more direct shipments to Asia-Pacific and four fuel-oil cargoes exported from California cleared out tonnage.

The Vancouver-US west coast Aframax rate rose on 20 September to Worldscale (WS) 155, or $2.03/bl for Cold Lake crude, the highest since 18 July, according to Argus data, after Shell provisionally booked a vessel at that level for a shipment to the Pacific Area Lightering zone (PAL) loading in early October.

Similarly, the Aframax rate for a direct shipment from Vancouver to China on 20 September was $3mn lumpsum, or $5.49/bl for Cold Lake, the highest since 25 July, according to Argus data.

Since 20 August, 10 Aframaxes have hauled crude from Vancouver to destinations in Asia-Pacific, including China, Japan, South Korea and Brunei, with one more such export possible by the end of September, ship tracking data from Vortexa show, compared with just nine in May-July.

The rise in direct Vancouver-Asia shipments has coincided with four rare fuel oil cargoes exported on Aframaxes from Chevron's 245,000 b/d Richmond, California, refinery to destinations across the Pacific. Those exports came after a possible unplanned shutdown at one of the refinery's secondary units, traders said.

One of those Aframaxes, the Shell-operated Pacific Ruby, carried Vancouver crude to the US west coast three times since the Trans Mountain Expansion (TMX) came online in May. Aframaxes in the "dirty" tanker fleet can load crude oil or fuel oil cargoes.

Direct transpacific shipments remove vessels from the west coast North America market for about 45 days.

Muted activity at PAL

With more crude going directly to east Asia, no ship-to-ship transfers of Vancouver oil onto very large crude carriers (VLCCs) have occurred since 25 August, Vortexa data show, likely due to a rise in VLCC rates. The rate for a VLCC voyage from the US west coast to China was $3.35mn lumpsum on 20 September, a rate last reached on 20 August and prior to that in May.

All-in, the cost to reverse lighter three 550,000 bl shipments of Cold Lake crude from Vancouver onto a VLCC at PAL, then ship to China, was $8.38mn, or $5.11/bl, on 20 September, including $150,000 ship-to-ship transfer costs at PAL, 15 days of VLCC demurrage and three days of Aframax demurrage for each reverse lightering.


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15/10/24

IEA points to oil stocks in case of supply disruption

IEA points to oil stocks in case of supply disruption

London, 15 October (Argus) — The world can draw on global oil stocks and rely on Opec+ spare production capacity in case of a supply disruption erupting from the conflict between Iran and Israel, the IEA said today. In its latest Oil Market Report , the Paris-based watchdog said it was "ready to act if necessary." It said IEA public stocks alone stood at over 1.2bn bl in addition to 500mn bl held under industry obligations. The IEA also said non-member China held 1.1bn bl of crude stocks, enough to meet 75 days of domestic refinery runs. The IEA co-ordinated two emergency stock releases in 2022 after Russia invaded Ukraine. The world's reliance on stocks would become more pronounced if any supply disruption extended beyond Iran's oil industry to include flows through the Strait of Hormuz. This would threaten most Opec+ spare production capacity of more than 5mn b/d as members such as Saudi Arabia, Iraq, Kuwait and the UAE are highly reliant on the waterway to export their oil. But as long as supply keeps flowing, the IEA said that the market faces a "sizeable surplus" next year. The agency's latest balances show a supply surplus of 1.11mn b/d in 2025, up by 50,000 b/d compared with its estimates last month. For this year, the agency now sees a slight surplus of 90,000 b/d, compared with a slight deficit last month. In the final quarter of this year, the IEA sees a surplus of around 200,000 b/d. Concerns over the strength of oil demand have been rising in recent months, with the IEA once again trimming its oil consumption forecast for this year. The IEA cut its 2024 global oil demand growth forecast by another 40,000 b/d this month to 860,000 b/d, with China once again the main driver. A slowdown in China's economy remains the key drag on oil consumption growth. The IEA sees China's oil demand this year increasing by 150,000 b/d compared with 180,000 b/d in its report last month. At the start of the year the agency was guiding for growth of 710,000 b/d from China. The IEA also downgraded its estimated growth from China for next year to 220,000 b/d from 260,000 b/d last month, despite the country's recently announced stimulus packages. For next year, the agency sees oil demand growth slightly higher at 1mn b/d, up by 40,000 b/d from last month's report. But growth for both 2024 and 2025 is set to remain well below 2023's post-pandemic surge in growth of just under 2mn b/d. On global supply, the IEA kept its growth estimate broadly unchanged at 660,000 b/d. But it expects global growth to be just above 2mn b/d next year even if all Opec+ cuts are maintained. Some members of Opec+ are due to start unwinding 2.2mn b/d of voluntary cuts starting in December — although this is dependent on market conditions. The IEA said that the 500,000 b/d fall in Opec+ crude production in September — led by Libya — could make it easier for the alliance to implement its plan to raise output, although healthy non-Opec+ supply growth next year will remain a concern. The agency said global observed oil stocks declined by 22.3mn bl in August, led by a 16.5mn bl draw on crude. It also said preliminary data showed stocks fell further in September. By Aydin Calik Global oil supply/demand balance mn b/d Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Guyana crudes pressured by end of Libya blockade, TMX


14/10/24
News
14/10/24

Guyana crudes pressured by end of Libya blockade, TMX

Houston, 14 October (Argus) — The restoration of Libyan crude production and an influx of heavy-sour Canadian grades to the US west coast has pressured light sweet Guyana crudes to their widest differential against Argus North Sea Dated since the assessments launched in February. Values for Guyana crudes Liza, Unity Gold and Payara Gold fell by 20-80¢/bl last week as offer levels fell swiftly. Liza reached a $1.20/bl discount against North Sea Dated, Unity Gold fell to a 35¢/bl discount and Payara Gold a 33¢/bl discount. Liza and Unity Gold fell to their lowest value since Argus began to assess the grades, while Payara Gold fell to its lowest level since mid-March. European refiners had turned toward Guyana after the 26 August start of the Libyan oil blockade , with imports rising by around 200,000 b/d to almost 456,000 b/d in September, according to data analytics firm Vortexa, reflecting the highest flows on that route since March. Libya has since recovered to more than 1mn b/d of production after the country's oil blockade ended on 3 October, according to data from state-owned oil company NOC published last week. Output in September was less than half of pre-blockade levels, with Libya's crude exports down to 460,000 b/d in that month compared with 1.02mn b/d in August, according to Kpler data. Projected October Guyana exports to Europe are 205,000 b/d lower than September at only 193,000 b/d, Vortexa data shows. TMX takeover Guyana prices also could be under pressure from added competition on the Americas Pacific coast from crude exported via the 590,000 b/d Trans Mountain Expansion (TMX) pipeline. In May, before the startup of TMX, Guyanese exports to the US totaled 68,000 b/d, data from Vortexa shows. Refiners did not purchase any Guyanese grades in June and August, and imports in July and September were more than halved from May levels at 32,000 b/d and 29,000 b/d, respectively. Vortexa estimates October deliveries will only amount to less than 29,000 b/d, a 57pc decrease since the start of TMX. TMX has quickly become a valuable crude source to US west coast refiners, displacing many Latin American grades in the process. Ecuadorean crude imports have trended lower since May, and were down by 30pc from June-September compared to a year earlier. Crude volumes arriving at Panama's PTP pipeline from Colombia — a common way US west coast refiners receive Colombian crude — have also trended lower since July. September crude receipts of Colombian grades into Panama have fallen from 173,000 b/d in July to 50,000 b/d in September. By Rachel McGuire and Joao Scheller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Permian producers face new headwinds


14/10/24
News
14/10/24

Permian producers face new headwinds

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Opec again lowers oil demand growth forecasts


14/10/24
News
14/10/24

Opec again lowers oil demand growth forecasts

London, 14 October (Argus) — Opec has cut its global oil demand growth forecasts for 2024 and 2025 for a third month in a row, bringing its projections slightly closer to other outlooks that have long seen much lower consumption. In its latest Monthly Oil Market Repor t (MOMR) the producer group revised down its 2024 demand growth projection by 110,000 b/d to 1.93mn b/d, driven by China and the Middle East. This is 320,000 b/d lower than the 2.25mn b/d growth Opec had been forecasting until it made its first downward revision for 2024 in August. The biggest reason for the latest downgrade was China, where Opec now sees demand growing by 580,000 b/d in 2024 compared with 650,000 b/d in its previous report. But Opec's demand growth forecasts remain bullish when compared with other outlooks. The IEA projects oil demand will increase by 900,000 b/d in 2024, while the EIA sees growth of 920,000 b/d. The story is similar for 2025. While Opec today lowered its oil demand growth forecast by 100,000 b/d to 1.64mn b/d, this is still much higher than the IEA's forecast of 950,000 b/d and the EIA's 1.29mn b/d. Expectations of weaker demand this year dragged on oil prices in recent weeks. Front-month Ice Brent crude futures prices fell to the lowest this year on 10 September at $69.19/bl, although rising tensions in the Middle East have more recently pushed the price closer to $80/bl. On the supply side, the group kept its non-Opec+ liquids growth estimate for 2024 unchanged at 1.23mn b/d. It nudged up its forecast for next year by 10,000 b/d to 1.11mn b/d. Opec+ crude production — including Mexico — fell by 557,000 b/d to 40.104mn b/d in September, according to an average of secondary sources that includes Argus . This is about 2.7mn b/d below Opec's projected call on Opec+ crude for this year, which stands at 42.8mn b/d. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Feds probing fatal Pemex Deer Park accident


11/10/24
News
11/10/24

Feds probing fatal Pemex Deer Park accident

Houston, 11 October (Argus) — The US Chemical Safety and Hazard Investigation Board (CSB) and Occupational Safety and Health Administration (OSHA) are both launching independent investigations into this week's fatal accident at Pemex's 312,500 b/d Deer Park, Texas, refinery. A hydrogen sulfide (H2S) release that killed two workers and injured dozens more occurred on Thursday evening at the plant located near Houston. It also led to shelter-in-place orders for surrounding communities, which have since been lifted. The CSB will investigate the causes of the fatal release, the agency said Friday. The CSB is responsible for investigating industrial accidents in the US, such as the deadly 2022 explosion at BP's Toledo refinery in Ohio and a probe into operations at Marathon's Martinez renewable diesel plant after several fires earlier this year . A representative for CSB was not immediately available for comment. OSHA — charged with enforcing compliance with federal workplace safety laws — is also investigating the incident, and has "up to six months" to complete the investigation, according to an OSHA representative. OSHA would not stop company operations during the duration of the investigation, but "could not speak for other agencies at the site," an OSHA official told Argus. The Harris County Sheriff's department has also opened an investigation into the incident. The release occurred as workers began planned maintenance on a unit. An H2S leak was detected, resulting in several units being shut down as staff sought to secure the leak. The Deer Park refinery had previously been damaged in a February 2023 fire, resulting in two weeks of repairs. A slew of accidents at Deer Park and several other Mexican state-owned Pemex's refineries in part led Fitch Ratings to downgrade Pemex's credit rating in July 2023 . By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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