Kpler OIL (Interesting Moves)

Floating Storage Declines

Trump’s stated earlier today via Twitter that “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

While it remains unclear the metric Donald Trump is referring to in his tweet, our data does not suggest any recent builds in global floating storage volumes. Kpler long-term floating storage, which defines crude stored on vessels for more than 30 days, is currently at levels below 8 million barrels, according to the 10-day moving average. Even the Aframax Delta Pioneer, which had been storing Urals in the Baltics since April 20th, 2016, recently delivered to Mongstad.

Furthermore, there has been no evidence of floating storage builds in the Middle Eastern region. Even near Iran, where the possibility of a breakdown of the JCPOA (the Iran nuclear deal) has not had any noticeable effect on long-term floating storage. Only one VLCC, the Deep Sea, has been idled close to Kharg Island since February 26th.

Oil-on-water, which includes a summation of floating storage and oil-in-transit, realized a decrease of more than 80+ million barrels through Q1 2018 with much of this decline a result of seasonal refinery maintenance. Of course, there were significant builds in short-term floating storage off the coast of China through the month of March, but this was largely a result of port congestion and not necessarily a direct function of OPEC action. Floating storage volumes near China have rapidly declined over the past 2-weeks.

Kpler GAS (Gas Weekly)

Cove Point

According to Dominion Energy, Cove Point is entering commercial services for its LNG Exports.

Shell’s Gemmata arrived at Cove Point 2-Apr and was expected to load a second commissioning cargo. After 4 days at the berth, the vessel undocked 6-Apr and is currently idle near the Chesapeake Channel.  Her draft level remains unchanged at 9.3 m, indicating that the vessel may not have loaded at the liquefaction plant.  The vessel is stopped and could either be waiting for a discharge destination or to return to the berth.  Kpler Analysts will notify users of any changes on the Team Board.

Cove Point Line-Up
Tokyo Gas’ Patris  was expected to arrive at the plant 9-Apr, however, she slowed down her speed on 4-Apr and is currently flagged by our system as a potential diversion. She is idle in the North Atlantic.

KEPCO’s newly built LNG Sakura  remains en-route towards the plant.. The vessel is traveling at a speed of 12.2 knots.

GAIL’s Adam LNG is a potential vessel to load at the plant in late April-early May as well. The vessel is crossing the North Atlantic, with a direction towards Cove Point.

Kpler (OIL) Interesting Moves

Brazilian Exports Spike in March

For the first time in three months, Brazilian seaborne exports managed an increase, spiking to 1,222 kbd, higher by a whopping 270 kbd m/m and 331 kbd y/y. The rise in exports was partially driven by higher shipments leaving Angra Dos Reis, which were up 131 kbd to end the month at 430 kbd.

Brazilian production remains in central focus as one of only a few non-OPEC countries, alongside the United States and Canada, that can significantly increase global production capacity growth over the next several years. So far through 2018, total seaborne exports have been largely inconsistent declining from a massive 1,359 kbd total in December of last year down to just 952 kbd in February before spiking again in March. If Brazil wants to become a dominant global producer, export stability is key, especially to places like China, which depend on a steady stream of Brazilian crude oil.

The exploration and production of Brazil’s pre-salt offshore blocks are a vital piece in improving Brazil’s export capacity moving forward. Last week, BP, Shell, Statoil and Wintershall, among others, were all big players in the offshore auction that saw 22 blocks successfully sold, raising USD2.4 billion. Exxon Mobil was the biggest winner, taking controlling stakes of two blocks in both the Santos Basin and Sergipe-Alagoas Basin and an additional four blocs within the Campos Basin. Wintershall was particularly aggressive in the Potiguar Basin, taking control of three blocks within that particular area.

 

March Iraqi Maintenance Pulls Down on Exports

After a strong two months to begin the year, Iraqi southern exports realized a moderate 171 kbd m/m decline to finish March at 3,461 kbd, a first under 3,500 kbd since last October. The decline was largely expected following an announcement from SOMO (The State Organization for Marketing Oil) that exports would not exceed 3,426 kbd in March. Much of the decrease was a result of maintenance at the SPM 1 berth, which is part of the offshore Al Basrah Oil Terminal. SPM 1 has not seen any vessels enter the berth since February 27th. Maintenance operations should be completed at some point this month.

Oil exports from northern Iraq remain largely in flux. The main export avenue for crude produced in the Kirkuk region remains along the KRG controlled pipeline that extends to the Ceyhan port complex in southern Turkey.  The problem is that the largest producing fields (Bai Hassan, Avana, Baba Dome) were reclaimed by Baghdad in October of last year after fighting broke out with the KRG and yet, there remains no clear agreement in place between the two governmental entities. This has created a situation where Baghdad has sought new short- term solutions to evacuate crude production from the region, including an oil-swap with Iran that has faced delays due to security concerns along the Iranian border. Kirkuk export flows out of Ceyhan finished March at 310 kbd, down 90 kbd m/m and slightly below the Q1 2018 average export level.

Surging U.S. Seaborne Exports March

U.S. seaborne exports surged to 1,863 kbd for week-ending 3/30/2018, marking the second highest weekly value in 2018 and the fourth highest volume of all time. Even among escalating rhetoric between the United States and China over tariffs and other trade restrictions, 459 kbd of U.S. crude flowed towards the East-Asian nation-state, marking a fourth straight week of 200+ kbd shipment levels. China has slowly become an important purchaser of U.S. crude since the ramp in exports began last October. The United States also shipped crude to the United Kingdom (269 kbd) and Italy (164 kbd) among others. A 500,000 bbl shipment of crude departed towards Colombia for the first time since early February.

The surge in weekly exports tends to align with U.S. inventories, which drew by 4.62 million barrels. The draw was a distinct flip w/w as the 1.64-million-barrel build in week-ending 3/23/2018 was largely the result of seaborne imports finishing at 4,537 kbd, higher by a whopping 996 kbd w/w. Looking forward to April, U.S. atmospheric crude distillation maintenance is expected to expand in PADD 1 (125 kbd), PADD 4 (44 kbd) and PADD 5 (195 kbd) while falling in PADD 2 (206 kbd) and PADD 3 (276 kbd).

Over the past several weeks, China and the United States have escalated rhetoric regarding tariffs on goods flowing between the two nation-states. Both countries have floated proposals listing products that could face duties, although no actual policy has yet been implemented. For now, it appears the Chinese have excluded crude oil from the list of U.S. items that could face import taxes, instead focusing on chemicals and inputs/outputs of plastics production.

Kpler OIL (Live Market Update)

  • OPEC March exports dropped by 361 kbd m/m led by Libya, Iraq, Angola and Algeria declines.
  • Flows tended to shift away from Asia in March. Much of the marginal change came from a flip in flows from East to West of the Suez for crude originating in Angola, Iran and Iraq.
  • Libya battled disruptions across much of the nation-states western production and exportation areas in March.
  • Exports leaving Iraq through the Persian Gulf dropped in March largely due to maintenance operations at the SPM 1 berth that has prevented ship loadings at the terminal since February 27th.
  • Saudi loadings hit a three-month high in March, but the Q1 loading average remained nearly in line with Oil Ministry expectations.
  • Venezuelan oil export volumes remain at levels not seen in more than 15 years.
  • Nigerian flows decreased by 96 kbd m/m, the first such decline in 6 months.

Kpler GAS (U.S. Gas Weekly)

Cove Point Update

Tokyo Gas’ Patris has updated her AIS for Cove Point, ETA 9-Apr. This could be the second cargo to be lifted from the plant. The vessel recently completed her maiden voyage. She was sub-chartered by Trafigura on a short-term basis to reload a cargo at Montoir 5-Feb. The cargo was delivered to GAIL at Dahej 23-Feb.

Diversion Alert: Where will the commissioning cargo be delivered?
Shell’s Gemmata departed from Cove Point 2-Mar with her course set towards the Cape of Good Hope. 9-Mar, the vessel slowed down her speed from 15.9 to 10.9 knots and remained in the same area for 2 days. Late evening 11-Mar, her course was changed and she is now headed towards Gibraltar at a speed of 14.6 knots.

Kpler LPG (Interesting Moves)

Americas
15 VLGCs are currently ballasting in the Gulf of Mexico awaiting their turn to load.
4 of them next to HSC, 2 next to Freeport and remaining 9 further offshore.

5 VLGCs (under Trafigura, Shell, Total, Mabanaft and PEMEX) are currently loading from Targa and Enterprise terminals.

With only one ex-USGC vessel delivering LPG to Europe this week, Panama Canal remains a predominant “via point” for all U.S. cargoes.

DOW’s BW Cedar is transporting 45,000 mt of propane from Targa to Terneuzen, ETA 25-March.
2 Newly built MGCs: Geogas’ Enrico Fermi and Exmar’s Kapellen are now on the way to USGC to pick up their maiden cargoes on 28-March and 13-April respectively.

Kpler LNG (Interesting Moves)

Main Highlights

Americas
GAIL’s Meridian Spirit loaded at Sabine Pass 4-Mar. This was the first contract shipment to depart from Sabine Pass. GAIL has a primary contract for Train 4 of up to 3,5 mtpa. According to GAIL’s chairman and managing director, Mr. B C Tripathi, the cargo will be delivered at Dabhol end of March.

BP’s Methane Spirit indicated Cove Point per AIS on 15-Feb. She is currently idle near Singapore. According to kpler analysts, the vessel can not reach Cove Point at her given ETA. There are currently no other vessels confirmed to load the 2nd cargo at the newly commissioned plant.