Kpler Oil (European MED refineries slate)

Originally Released on 7 August 2017

European MED refineries slate

European refineries in the Mediterranean Sea have faced a significant shift in their overall crude diet for 2017.
Iran’s return to the global crude market has played a major role in precipitating this change. In one year, processing of Iranian crude in European MED refineries has more than tripled. In June, a record 726 kbd of Iranian crude was processed in the region, averaging 573 kbd over the first half of the year.  This is a stark change from volume levels seen June 2016, in which Iranian crude input amounted to approximately 210 kbd.
WAF grades are also progressively returning to MED slates after lower than average volumes realized in April and May.
Iranian and WAF crude oil grades are increasingly serving as substitutes for CPC and other Middle-Eastern grades, which have shown to be less present in June’s slates.

 

Mediterranean crude slate (%)

Mediterranean crude slate (kbd)


MED European installations included in the volumes

*Sidi Kerir (SUMED) shipments are included in the middle East (ex-Iran) groupblog-orange-lineblog-orange-line

Kpler OIL (World Floating Storage)

Originally Released on 27 July 2017

World floating storage

Floating storage averaged 71.2 million barrels over the last 30 days, down from a peak of 100 million barrels in June. Floating volumes in the Malacca Strait dropped sharply averaging 8.5 million barrels over the last month down from 26 million barrels in June.

Floating volumes on the North Sea remain high, but several ship-to-ship transfer operations and a high amount of vessel movement in the Southwold STS area is an indicator that these barrels are likely to clear towards Asia or feed into local demand.

 

Global floating storage – million barrels
Libya and Nigeria

Libyan export growth continued in July, outpacing export volumes seen in June by a slight margin. The Ras Lanuf, Zueitina and Zawyia terminals are driving this growth.

Nigerian exports are likely to drop for the third consecutive month, largely a result of force majeure declared at Bonny following attacks on the pipeline there. The last vessel to load at the installation was the Eser K on July 17th. Zouzou N. and Evgenia are currently stopped in the West African Gulf. Both signaled a Bonny ETA of July 26th and July 27th respectively. The Nordic Moon and Front Clipper also signaled Bonny as the next destination of loading with August 3rd and August 7th expected arrival dates. Hence, it is likely that operations will shortly resume at the terminal.

Libya and Nigeria exports – kbd

Saudi Arabia exports
Saudi Arabia exports are expected to remain at June levels of 7.2 million barrels per day in July. Saudi Arabia is likely to cut August exports in order to accelerate the global rebalancing effort.
Saudi Arabia exports – kbd
United States exports
U.S. seaborne exports recovered in July following a depressed June total. July will be the second highest export month behind February 2017, when seaborne exports hit 894 kbd. U.S. seaborne imports are expected to total 860 kbd in July, with around half of this volume moving towards Asia.
United States Exports – kbd
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Kpler OIL (Saudi Arabia and Iraq exports)

Originally Released on 21 July 2017

Saudi Arabia and Iraq exports

Saudi Arabia is likely to reduce exports in July compared to June 2017. Kpler data currently indicates that Saudi exports could end July between 6,421 kbd and 7,100 kbd. While the variance of this range is quite wide, it still serves as an indication that exports might not increase compared to June assuming the higher end of the range and below May levels assuming the lower end of the range. The month of May saw the lowest export total since December 2015, according to Kpler data.

Saudi Arabia is particularly concerned regarding U.S. imports, due to the visibility of crude movements into the nation. U.S. imports of Saudi crude hit a 7-year historical low on a weekly-basis, according to EIA data. Kpler data shows a steep reduction of U.S. imports year-over-year and compared to an average of the last 3 years.

Furthermore, Saudi cuts to the United States will continue and possibly deepen further. Kpler data reveals that on July 20th, there are 15 VLCCs and 3 Suezmax vessels in transit to the U.S.

Saudi crude in transit to United States – July 20th

However, the Saudi strategy has been partially offset by increasing U.S. imports from Iraq which grew by 113 kbd (26%) in June 2017 compared to the same month a year earlier and will increase by 335 kbd (85%) year on year in July 2017, according to our predictive model. With that being said, the number of shipments headed from Iraq to the United States has significantly decreased over the last few weeks, as shown in the Kpler screenshot below. It is possible that Iraq could join the Saudi strategy to accelerate the rebalancing scenario.

Iraq crude in transit to United States – July 20th
Ecuador officially breaks the OPEC production agreement

On Tuesday, July 18th, Ecuador officially announced its intent to break the OPEC production agreement. While Ecuador only represented approximately 1.4% of the total OPEC production cut, it could serve as dangerous precedent for larger nations to break from the agreement. The Ecuadorian government cited fiscal constraints as a reason for the need to increase production. Kpler data reveals consistent monthly increases in Ecuadorian exports from 382 kbd in March to 435 kbd in June – a near 11% increase. These elevated production levels have not been seen since last June 2016.

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Kpler OIL (EIA Weekly Export numbers comparison)

Originally Released on 13 July 2017
EIA Weekly Export Accuracy
On the August 31st 2016, the EIA changed its methodology to estimate weekly crude oil exports:
“EIA previously relied on weekly export estimates based on monthly official export data published by the U.S. Census Bureau roughly six weeks following the end of each reporting month” – EIA website
The agency is now using U.S. Customs and Border Protection export values obtained on a weekly basis. U.S. players have no obligation to declare volumes exported to Canada. As a result, the EIA developed a statistical model for the Weekly Petroleum Status Report. Monthly data is issued from the U.S. Census Bureau who has forged an agreement with Statistics Canada, a national economic data aggregation agency, in order to receive reliable import data.
In order to evaluate the accuracy of the EIA model, Kpler aggregated the weekly export values on a monthly basis and compared them to the EIA monthly values published with a six-week delay. The results show that since the implementation of the statistical model, EIA tends to underestimate the weekly export volumes.On average, EIA weekly export levels are underestimated by 113 kbd. A delta of 268 was realized in April, as shown in the figures below:
EIA month from weekly exports vs EIA monthly exports – kbd

Kpler reported 803 kbd of seaborne exports from PADD 3 in April 2017. EIA figures revealed total exports of 1,001 kbd in April among which 775 kbd came out of PADD 3.

Official Trade Figures

Additional official crude oil trade data was released over the last few days. Kpler presented an accuracy rate above 99% for Iraq (Basrah), Chinese and Japanese imports, >97% for U.S. imports and 94% for U.S. exports and CPC exports, as shown below:

Kpler and official data – kbd
*United States imports exclude land-based and seaborne imports from Canada
*United States exports exclude land-based exports
*China imports excludes land-based imports (assumption : 475 kbd imports by pipe from China and Kazakhstan)

Kpler Oil (Mediterranean Crude Slate)

Originally Released on 7 July 2017

European MED refineries slate

European refineries in the Mediterranean Sea have faced a significant shift in their overall crude diet for 2017. Iran’s return to the global crude market has played a major role in precipitating this change. In one year, processing of Iranian crude in European MED refineries has more than tripled. In June, a record 726 kbd of Iranian crude was processed in the region, averaging 573 kbd over the first half of the year.  This is a stark change from volume levels seen June 2016, in which Iranian crude input amounted to approximately 210 kbd.
WAF grades are also progressively returning to MED slates after lower than average volumes realized in April and May.
Iranian and WAF crude oil grades are increasingly serving as substitutes for CPC and other Middle-Eastern grades, which have shown to be less present in June’s slates.

Mediterranean crude slate (%)

Mediterranean crude slate (kbd)

MED European installations included in the volumes

*Sidi Kerir (SUMED) shipments are included in the middle East (ex-Iran) group

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Kpler OIL (Declining U.S. Exports)

Originally Released on 29 June 2017

Current Kpler data revealed a large decline in U.S. exports for EIA week-ending 6/23/2017 at 266 kbd. This represents a 418 kbd decrease from the previous week. As a result, U.S. exports continue a trend lower that began in mid-May. Notice the four-week average has fallen to 564 kbd. The Kpler forward looking predictive model (which is subject to change) holds that exports will likely rise in a range between 100 and 200 kbd in EIA week-ending 6/30/2017.

African Exports

The decline in U.S. exports has been partially offset by increasing crude shipments from Angola and Libya since EIA week-ending 6/5/2017. Last week, the two nations exported a total of 2,389 kbd, still well above the low seen earlier in the month.

Current Kpler predictive modeling data reveals that both Libyan and Angolan exports are likely to increase by more than 500 kbd for the current week-starting 6/26/2017.

Increasing Chinese Imports

Last week, imports of crude oil into China realized steep declines at 6,611 kbd. A sub-six thousand kbd level has only occurred in four weeks for all of 2017 (week-starting 1/23, 2/20, 4/3, and 6/19). Kpler predictive modeling data indicates a sizable recovery from these lows for the current week (it is likely China will import over 10,000 kbd).

*Current week predictive modeling is subject to change as additional data becomes available. Hence, such data should be used only as a guideline regarding import and export flows

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Kpler OIL (Saudi Arabian Exports to the U.S.)

Originally Released on 22 June 2017

Saudi Arabian exports to the United States

Saudi Arabian exports to the U.S. are steadily trending lower as the kingdom attempts to rebalance the crude oil market. The latest weekly EIA release revealed U.S. imports from Saudi Arabia at 872 kbd for week-ending 6/16. Additionally, the 4-week moving average of 970 kbd has consistently fallen since late May.
U.S weekly imports of Saudi crude – kbd – 4-week average
 

Kpler data reveals that imports of Saudi crude week-ending 6/23 will continue the downward trend. As of Thursday, 6/22, only 405 kbd of crude oil from Saudi Arabia have been imported to the United States. It should be noted that part of this decline is a result of inclement weather from Tropical Storm Cindy, which disrupted some loading operations in and around Sabine Pass, New Orleans and Lake Charles.1

Supply of arab grades over the next weeks will come from:

  • 7.85 million barrels currently available in U.S. Gulf Coast
  • 6.31 million barrels in transit to Padd 3 over the next 25 days (including ship-to-ship operations)
  • 6.39 million barrels in transit to Padd 5 over the next 25 days (including ship-to-ship operations)
The above volumes represent approximately 20.5 million barrels of Saudi crude that will become available over the next 25 days. Such availability should imply U.S. imports of arab crude averaging 800-850 kbd over the same period.
Saudi crude in transit to U.S. – June 22nd
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