China looks overseas for transport fuel supplies
Chinese state-controlled refiner CNOOC, a typical exporter of transport fuels, has turned to the international market to buy gasoline because of firm domestic prices.
The refiner bought a 210,000 bl 92R gasoline cargo that was discharged at Nantong port in east China's Jiangsu province in late June in a rare move. Other details of the shipment could not be confirmed. ExxonMobil could have chartered the Chang Hang Hong Tu to load finished gasoline from Singapore's Vopak Banyan oil tanks on 9 June. The cargo was likely discharged at CNOOC's Nantong port terminal on 22 June, according to oil analytics firm Vortexa.
The Argus 92R Shandong price premium against Argus 92R Singapore spot assessments remains above $8/bl this week, higher than the first-half 2021 average of around a $4.38/bl premium so far. But Chinese imports may be constrained by limited import quotas and as domestic prices start to soften. The Chinese domestic price premium against the Singapore price peaked on 21 May at $13.62/bl, but fell steadily to reach $8.89/bl yesterday.
CNOOC is joined by fellow state-owned refiner Sinochem, another major exporter of transport fuels, in importing cargoes into China. Sinochem imported in late May 118,300 bl of 92R gasoline and 283,500 bl of ultra-low-sulphur-diesel for delivery to Dongguan port in south China's Guangdong province. This is the first bulk gasoline import for delivery to Dongguan in recent years.
CNOOC usually sells about 2-3 medium-range gasoline cargoes each month through spot tenders but has offered just 12,000t of gasoline for loading from Dongfang in June and one 35,000t cargo of non-oxygenated gasoline for 17-18 May loading in the past two months, according to Argus' tender records.
China is a major supplier of transport fuels to the Asian region. It exported 423,000 b/d of gasoline and 405,000 b/d of gasoil in May compared with 414,000 b/d and 676,500 b/d respectively in April. But China's transport fuel imports were showing signs of rising during the month, with its purchase of 23,000 b/d of gasoline the highest since May 2020 and 23,500 b/d of gasoil the highest since February 2021.
Related news posts
New ISO 8217 eyes wider scope for alternative fuels
New ISO 8217 eyes wider scope for alternative fuels
London, 24 April (Argus) — The 7th edition of ISO 8217, to be published in the second quarter of this year, will outline a broader integration of marine biodiesel blending, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. Tim Wilson, principal specialist fuels of Lloyds Register's fuel oil bunkering analysis and advisory service (FOBAS), presented on the upcoming iteration of the ISO 8217 marine fuel specification standard, which will be released at IBC 2024. The new edition will incorporate specification standards for a wide range of fatty acid methyl ester (Fame)-based marine biodiesel blends up to B100, 100pc hydrotreated vegetable oil (HVO), as well as synthetic and renewable marine fuels. This will also include additional clauses to cover a wider scope, and briefly touch on biodiesel specifications that do not entirely align with road biodiesel EN-14214 specifications. This follows the emergence of widening price spreads for marine biodiesel blends because of specification differences and the lack of a marine-specific standard for the blends. The new edition of ISO 8217 is also expected to remove the limit of 7pc Fame when blended with distillate marine fuels such as marine gasoil (MGO) which was in place in the previous ISO 8217:2017. Other changes to distillate marine biodiesel blends include changes to the minimum Cetane Index, oxidation stability alignment to be connected to either ISO 15751 for blends comprising 2pc or more of Fame biodiesel and ISO 12205 for blends comprising a Fame component of under 2pc. Cold-filter plugging point (CFPP) properties will be determined by the vessel's fuel storage tanks' heating capabilities and requirements will be set in place to report the CFPP for distillate marine biodiesel grades, according to the new edition of the marine fuel specification standard. Wilson said that a minimum kinematic viscosity at 50°C will be in place for various forms of residual bunker fuel oil along with a viscosity control alerting suppliers to inform buyers of the exact viscosity in the supplied fuel. He said they have seen delivered fuel viscosity come in at much lower levels than ordered by the buyers, which was the reasoning behind the viscosity control monitoring requirement. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Peninsula eyes B100 marine fuel supply in Barcelona
Peninsula eyes B100 marine fuel supply in Barcelona
London, 24 April (Argus) — Marine fuel supplier and trader Peninsula has added a chemical tanker to its fleet in Barcelona, with a view to supply the port with B100 marine biodiesel. Aalborg meets chemical tanker regulations under the International Maritime Organisation (IMO)'s International Convention for the Prevention of Pollution from Ships (MARPOL) Annex II. This means the tanker can supply marine biodiesel blends containing up to 100pc fatty acid methyl ester (Fame), which conventional oil tankers are unable to do . Oil tankers and barges are limited to up to 25pc Fame. Peninsula added that the Aalborg is also used to supply conventional fossil bunker fuels such as very-low sulphur fuel oil (VLSFO) and marine gasoil (MGO). It is yet to complete a B100 delivery in Barcelona. Market participants pointed to limited demand for B100 in the Mediterranean, but regulatory changes such as the introduction of FuelEU maritime next year may help to support demand for marine biodiesel blends. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
USGC LNG-VLSFO discount to steady itself
USGC LNG-VLSFO discount to steady itself
New York, 23 April (Argus) — The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel. US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady. The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before "increasing slightly" in the third quarter. EIA's forecast for all of 2024 averages about $2.20/mmBtu. US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build . Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil. In general, LNG's substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022. By Stefka Wechsler US Gulf coast LNG vs VLSFO $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Kuwait’s KPC agrees VLSFO term supply contract with QE
Kuwait’s KPC agrees VLSFO term supply contract with QE
Singapore, 23 April (Argus) — Kuwait's KPC has signed a term agreement with fellow state-owned firm Qatar Energy (QE) to supply very-low sulphur fuel oil (VLSFO) for loading over July 2024 through to June 2025. The VLSFO supplied amounts to 1.2mn t/yr (21,000 b/d). KPC finalised the term contract at around a $8-9/t premium against the average of Singapore 0.5pc marine fuel spot assessments, according to a source close to the company. QE has expanded its own bunkering infrastructure at the port of Ras Laffan and started relying on VLSFO supplied from Kuwait's 615,000 b/d al-Zour refinery since early last year. The VLSFO supplied is to meet the country's bunkering demand. QE had a previous mini term VLSFO agreement with KPC last year. KPC supplied around 1-2 Medium Range size vessels of VLSFO each month from January 2023 to March this year, according to global trade analytics platform Kpler. The announcement of the term deal left the market unfazed, said a Dubai based fuel oil trader, as KPC has regularly offered term tenders over the year. Supplies to QE has been continuing since last year, with the deal merely being a renewal of their previous agreement, the trader added. This is KPC's third official term contract concluded since the start-up of al-Zour in late 2022. The first term contract was awarded for second-half 2023 loading to Shell, with the second to ExxonMobil for first-half 2024 loading. The terms of the two contracts stated a minimum of 80,000 t/month and a maximum of 720,000 t/month of VLSFO, with KPC having discretion over the total volume. Al-Zour can produce around 11mn-12mn t/yr of VLSFO at full capacity, with around half of it allocated for exports. By Asill Bardh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more