Kpler OIL (Venezuelan Loading Delays)

Originally Released on 12 October 2017

PADD 3 Oil-on-Water Remains High

Total oil-on-water in PADD 3 remains high at 39.4 million barrels – up 35% since last Friday. Nearly 100% of Gulf of Mexico crude production was taken offline as a result of Hurricane Nate over the weekend. Floating storage as a percentage of oil-on-water continues to decline following the 30% plus levels that became the norm for several weeks following Hurricane Harvey in late-August and early-September.

Venezuelan Loading Delays

Loading rates at Venezuela’s Jose and Puerto La Cruz ports remains slow – there are currently several vessels waiting to load (or arriving today to load):

  1. Rio Caroni: arrived empty on September 9th after discharging approximately 1 million barrels of crude at Bullenbay on September 1st.
  2. Paramount Halifax: arrived empty on October 3rd after discharging approximately 525,000 barrels of crude in PADD 1 refineries in late September.
  3. Maran Cleo: arrived empty on September 26th after discharging a combined 2 million barrels of crude in China in mid-July.
  4. Rio Apure: arrived empty on September 24th after discharging approximately 1 million barrels of crude at Bullenbay on September 20th.
  5. Ns Lotus: arrived empty on October 9th after discharging approximately 555,000 barrels of crude at Bayway on October 2nd.
  6. Dht Utik: slated to arrive today, she discharged approximately 2 million barrels of crude in South Korea in late June.
  7. Boyaca: slated to arrive today, she discharged approximately 2 million barrels of crude in China in mid-August.

Global Floating Storage Slightly Higher Week-over-Week

Following a steady decline in global floating storage volume through much of August and early September, it appears that total volume has increased slightly to 43.5 million barrels over the past week. This is still well below the high of 87.6 million barrels realized on July 18th. Within this analysis, floating storage is assumed as crude loaded on vessels moving at less than 1 knot for at least the past 10-days.

South Korean Imports Up Significantly Week-over-Week

Over the past four weeks, imports to South Korea have consistently risen. It appears that the trend will remain intact for the current week. KPLER predictive modeling holds that for the week of 10/9 – 10/16, imports will equal 4,273 kbd –  a 27% increase week-over-week.The middle-east serves as the most important origin location for South Korean imports, but Russia and the Americas (Mexico and the United States) have supplied the Asian nation with crude oil as well over the past month. Smaller crude trading partners, which fall in the “Other” category, include Australia, Indonesia and Brunnei among others.

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Kpler OIL (Reopening of Sharara Oilfield)

Originally Released on 5 October 2017

The Sharara Oilfield Reopens

Early this week, Libya’s Sharara oilfield, the largest of its kind in the north African nation-state, was taken offline because of a takeover by non-governmental militia forces. Such a disruption cut off significant production – Sharara yields 230,000 barrels-per-day.According to Libya’s National Oil Corporation, it appears that the dispute has ended and the Sharara field is once again fully operational. The Seaways Hatteras was originally expected to load at the Zawia export terminal, which is connected by pipeline to Sharara, on October 3rd. There was some uncertainty regarding whether this vessel would be able to load. Fortunately, it appears that she entered the berth on October 5th and is currently loading approximately 1 million barrels of crude.

 

World Oil-on-Water and Floating Storage

Between 9/30 and 10/5, total oil-on-water rose from 889 million barrels to 917 million barrels. At the same time, the percentage of this oil-on-water that was floating storage fell below the 5% level seen for much of the previous week. KPLER designates floating storage for crude loaded on vessels moving at less than 3 knots for at least the past 7 days.

Philadelphia Slowly Returns to Normality

Over the course of the last two weeks, the Port of Philadelphia has grappled with difficult ship-to-ship and port-to-ship loading conditions resulting from Tropical Storm Maria. Thankfully, it appears that vessels are now readily discharging crude.

  • Ns Challenger: discharged approximate 475,000 barrels of Brass River crude on October 1st at the Monroe Energy Installation.
  • Tofteviken: discharged approximately 448,000 barrels of Akpo crude on October 3rd at the Delaware Refinery complex (located next to Delaware City).
  • Zenith Spirit: is currently discharging approximately 300,000 barrels of crude at the Fort Mifflin installation.

On Tuesday, there was a combined 6.1 million barrels of oil-on-water in the Big Stone Lightering zone and near the entrance to Delaware Bay. As of 10/5, it appears this volume has dropped to approximately 4 million barrels.

Tropical Storm Nate

Yet another tropical cyclone is expected to impact the Gulf Coast next week. Tropical Storm Nate, currently located on the eastern side of Nicaragua is expected to pass over the Yucatan Peninsula and enter the Gulf of Mexico on Saturday. The National Hurricane Center currently estimates the storm could strengthen slightly and will make landfall in Louisiana or Mississippi early next week.There is still a high degree of uncertainty regarding this storm track. KPLER will keep a close eye on the situation. It is possible that Nate could impact U.S. import/export operations.

Chinese Seaborne Crude Imports Down Slightly in September

Seaborne crude oil imports into China were lower by 35 kbd in September compared to August. China realized significant month-over-month increases in imports from Angola (+54 kbd), Iraq (+139 kbd), Russia (+135 kbd), Malaysia (+37 kbd), and Saudia Arabia (+75 kbd). The opposite was true of crude imported from Oman (-175 kbd), Iran (-23 kbd), Kuwait (-57 kbd) and Brazil (-74 kbd) among others.

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Kpler OIL (Philadelphia Loading Delays)

 

Originally Released on 28 September 2017

Exports to Asia from the United States

Asian demand for U.S. crude has been strong over the past week. All 2,065 kbd was shipped to the Singapore Republic aboard the following vessels:

  • Gener8 Hera – loaded approximately 500,000 barrels on September 24th, and 527,000 barrels on September 25th through ship-to-ship transfers in Galveston Light. Fixture data holds an expected arrival date of November 6th.
  • Ast Sunshine – loaded approximately 1 million barrels on September 28th at Oxy Ingleside. Fixture data holds an expected arrival date of November 10th.

PADD 3 Oil-on-Water

Nearly 4-weeks after Hurricane Harvey, PADD 3 is finally starting to show signs of recovery. Total oil-on-water has fallen from 25.8 million barrels on 9/22 to 22.9 million barrels as of 9/28. Floating storage as a percentage of total oil-on-water also seems to have fallen consistently below 30% – this is in contrast to the previous week, which was on average 33% of total oil-on-water.

Philadelphia Loading Delays

Loading delays continue in Philadelphia due to choppy seas resulting from Tropical Storm Maria. No volume has been imported into the Port over the last week. The latest vessel to discharge any crude was the Coral Sea on September 17th into the PBF Paulsboro Refinery. There are currently six loaded vessels located near the Big Stone lightering zone and another 3 loaded vessels near the entrance to the Delaware Bay.

  • Nordic Zenith – arrived at Big Stone Light on September 13th loaded with approximately 1 million barrels of Akpo crude oil.
  • Zenith Spirit – arrived at Big Stone Light on September 15th loaded with approximately 1 million barrels of crude oil from the Bethioua installation.
  • Eagle San Antonio – arrived at Big Stone Light on September 23rd loaded with approximately 800,000 barrels of Akpo crude oil.
  • Eagle Kinarut – arrived at the entrance to Delaware Bay on September 23rd loaded with approximately 478,000 barrels of Arab grade crude oil from a ship-to-ship transfer at Galveston Light.
  • C. Innovator – arrived at the entrance to Delaware Bay on September 23rd loaded with approximately 1.1 million barrels of crude oil from the Brass River installation.
  • Cape Bari – arrived at the entrance to Delaware Bay on September 21st loaded with approximately 1 million barrels of Basrah Heavy crude oil.

Exports from Zawia Terminal

The Zawia terminal in Libya serves as the export point for the nearly 230,000 barrels of crude oil produced every day at the nation-states largest producing field – Sharara. The pipeline was blockaded by rebels and forced out of operation in late-August and early-September. The pipeline is once again fully operational. The Zawia export terminal loaded a total of 1,250 kbd of crude oil over the past week.

  • Zarifa Aliyeva – loaded approximately 500,000 barrels of crude oil on September 25th. She already discharged half her load at Fos Sur Mer and AIS signaling indicates she will discharge the rest of her load at Augusta on the eastern coast of Catania.
  • New Amorgos – loaded approximately 750,000 barrels of crude oil on September 27th. Currently headed to the Mediterranean Sea.

Total World Floating Storage

The volume of total world floating storage has seen a slight uptick over the past seven days. This follows nearly 6-weeks of declines. Between 7/30 and 9/13, total world floating storage declined by nearly 60 million barrels. This trend has since reversed slightly. Floating storage on 9/28 was 49.6 million barrels. The Brent forward curve continues to remain staunchly in backwardation.

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Kpler OIL (PADD 3 Oil-on-Water Congestion)

Originally Released on 22 September 2017

PADD 3 Oil-on-Water Congestion

Congestion continues in PADD 3 following the effects of Hurricane Harvey. Oil-on-water is only 3 million barrels lower than last Friday and floating storage as a percentage of total oil-on-water remains staunchly above 30%. Floating storage is designated as crude loaded on vessels traveling at less than 3 knots for at least the past seven days. There are currently 14 vessels tagged as floating storage near Port Arthur, the Port of Houston and the Galveston lightering zone.

Iranian Floating Storage

The VLCC Diamond II, which fully loaded at Assaluyeh on March 17th, discharged approximately 2 million barrels through a ship-to-ship transfer on September 5th, bringing Iranian floating storage volume levels to nil for only the second period of time this year. Iranian floating storage has fallen approximately 11.5 million barrels since early June. Iran rapidly increased seaborne exports through the first half of the year.

Venezuelan Loading Issues

Earlier in the week, there was more than 11 million barrels of capacity waiting to be loaded off the coast of Venezuela. After peaking on September 16th, total capacity waiting to be loaded has fallen by 4.3 million barrels. The Eagle Kangar, Ithaki and Phoenix Vanguard are currently docked and loading crude oil.

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Kpler OIL (Chinese Seaborne Crude Import Dynamics)

 

Originally Released on 15 September 2017

Chinese Seaborne Crude Import Dynamics

Beginning in mid-2015, China surpassed the United States as the world’s largest importer of crude oil. As a result, China plays an increasingly important role in the global supply-demand characteristics for crude. Understanding this market is vital given the distinct interplay between domestic demand and external supply fluctuations.

Over the past several months, Chinese seaborne crude oil import data indicates a change of trend from late 2016 and early 2017. Between March and August of this year, total Chinese seaborne crude imports fell by 1,102 kbd – a near 13% decrease in just a 6-month period. This is distinctly different from the period between October and March, where crude imports increased 2,720 kbd. Notice the clear up and down movement of the 3-month moving average

Saudi Arabia served a central role in providing crude allocations to China in 2016 – the OPEC leader sent more crude oil to China than any other nation-state in all but two months that year.  Late in 2016, the OPEC organization (excluding Nigeria and Libya) along with several other non-OPEC-affiliated crude exporting nations agreed to actively cut production to rebalance a global market awash with cheap oil. China faced a dual dilemma of flat to falling imports from Saudi Arabia paired with domestic increases in the demand for crude. The nation-state sought an increase in crude imports from several sources – namely West Africa and the North Sea.   

Between February and May 2017, total imports of West African and North Sea grade crudes increased by a total of 544 kbd. Approximately 49% of this increase was import growth from Angola, which ironically is an OPEC member nation. In the same period, Saudi imports fell by 181 kbd.

Notice the rather high period of Chinese import demand between March and June (average of 8,322 kbd during this period). This tended to provide upward pressure on imports not only from West Africa and the North Sea, both of which increased to a peak of 2,156 kbd in May, but also on Saudi imports ever so slightly, which increased to 1,046 kbd in the same month.

Beginning in June a general downward trend is reflected in total imports from all three geographical areas as overall Chinese import demand contracts. Between June and August, total Chinese imports from West Africa, the North Sea and Saudi Arabia fell a combined 428 kbd.

The interplay between supply and demand tends to highlight the subtlety in deriving a market equilibrium for Chinese seaborne crude markets. As is reflected in the data, one often dominates the other for periods at a time before the dynamic changes.

  • China experienced a rapid increase in seaborne imports between November 2016 and March 2017.
  • China sought alternative sources of crude as Saudi actively limited crude allocations to Asia. This supply gap was partially filled through increased levels of crude purchases from West Africa and the North Sea.
  • Angola played a central role in providing crude oil to China, even as Saudi Arabia limited exports. Angola is a member of the OPEC organization.
  • Crude imports from West Africa, the North Sea and Saudi Arabia have all realized declines over the last several months as Chinese import demand has fallen.

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Kpler OIL (Libyan Exports)

Originally Released on 7 September 2017

Libyan Exports

Since August 19th, the Sharara and Elephant Oil Fields have been effectively shut-in following a seizure of the pipeline that extends between Sharara/Elephant and the Zawiya export terminal. Finally, after two weeks of militant blockades, the Libyan government announced the pipeline is once again operational and both fields will resume output operations. The Sharara and Elephant oil fields yield approximately 280 kbd and 90 kbd respectively.

PADD 3 Oil-On-Water

The struggle to recover following Hurricane Harvey continues. Kpler data currently indicates a total of 19.83 million barrels of oil-on-water just in PADD 3. Much of this is the result of limited operations in and out of the Houston Ship Channel and Port Arthur zones. There are currently more than 30 ships holding crude at or near the Galveston lightering area.

Hurricane Irma Disruptions

While Southeastern Texas recovers from Hurricane Harvey, Florida and the Bahama’s brace for Hurricane Irma, who is currently moving west-northwest at 16 mph just north of the Dominican Republic. She is the strongest ever hurricane to form in the Atlantic with maximum sustained winds of upwards of 175 miles per hour. As a result, there are many port closures. Please note that public information changes quickly and is oftentimes limited as the effects and future track of Irma are updated by local authorities and the National Hurricane Center respectively:

  • Buckeye Partner’s Bahamas Clean and Bahamas Hub installations have suspended all operations as of 9/7/2017 until further notice.
  • Statoil’s South Riding Point Terminal was opened for operations early Thursday morning. It appears that all operations are now officially suspended as of 9/7/2017 until further notice.
  • Port Everglades announced it will suspend all operations the morning of 9/8/2017 until further notice.
  • NuStar’s St. Eustatius Terminal experienced damage from the storm and currently has not set a date in which to reopen. A press release stated the facility took “damage to several tanks and other equipment,” while further stating that all U.S. employees were safe and no spills had occurred.
  • ArcLight Capital Partner’s Saint Croix Products Terminal is currently closed. There is limited information on the extent of damage.
  • Buckeye Partner’s Yabucoa Terminal is currently closed. There is limited information on the extent of damage.

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Kpler Crude OIL (Hurricane Harvey update)

Originally Released on 1 September 2017

Harvey update

Kpler keeps evaluating the impact of Harvey hurricane in the crude market as several ports and refineries remain closed and tanker arrivals have not stopped.

4 Aframax entered Corpus Christi port this morning whereas Houston port remains closed. Both ports imported in average 302 kbd in August, a 200 kbd reduction compared to an average 550 kbd imported over the last 5 months. Last crude shipments to Houston and Corpus Christi were on August 23rd and August 22nd, respectively.

Our data reveals that seaborne imports were at 3,537 kbd for week ending September 1st, down from last week 4,768 kbd with PADD 3 seaborne imports at 1,250 kbd.

As a consequence of reduced imports in the U.S. Gulf Coast, crude oil tankers are accumulating on the sea and arrivals from Middle East and Latin America keep coming. There are currently 25 million barrels of crude aboard 36 tankers in Galveston and close to U.S. shores, excluding those loaded for exports:

Additionally, 9.4 million barrels currently in transit to the Gulf Coast are likely to be added to these volumes in the next few days. The volumes are currently in the Caribbean Sea and close to Mexican ports:

Hence, total crude floating in the Gulf of Mexico with a final destination in PADD 3 refineries and terminals could reach nearly 30 million barrels if New Orleans port and LOOP are not able to absorb the accumulated crude. Indeed, we have not seen significant movements of tankers changing of destination to New Orleans or LOOP. New Orleans port has imported 250 kbd in average over the last months and LOOP around 450 kbd, but it has been seen importing over 700 kbd in the past, according to our data. 

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