Asia has TMX option as heavy crudes tighten: PetroChina
The recently expanded 590,000 b/d Trans Mountain Expansion (TMX) pipeline's start-up has improved Asian refiners' access to heavy Canadian crude at a time when supplies of such grades have tightened, PetroChina International's chief economist Wu Qiunan said.
The TMX pipeline has cut the shipping time to export crude from Canada's west coast to Asia-Pacific to "only 19 days compared with the US Gulf [coast] which is basically 45 days," Wu said at the S&P Global Commodity Insights Appec conference in Singapore on 9 September. This "opens a very good option for Asia to receive more from Canada".
Wu pointed out that the Middle East is seen as the "natural supply" source of crude for Asian refiners, but the freight distance to ship crude from the region is now similar to shipping crude from Canada's west coast. Canadian crude exported from the TMX pipeline is also heavy, while supplies of similar-quality crude from the Mideast have become tighter because of Opec+ production cuts. This meant that Asian refiners will "find value" for such heavy grades. Canadian crude is also not cheap and in fact has found "a fair price", Wu said.
Asian demand will continue to grow in importance against the prospect of increasing production from the Americas, including from Guyana and Brazil. Asian demand has been key in soaking up the growth of US production and exports, Norway's state-controlled Equinor's senior vice-president for crude products and liquids Alex Grant said, with Asian oil demand and US supply growth sharing a "symbiotic" relationship.
But the potential production increase from the Americas brings uncertainty to the outlook for US shale growth, especially with the current negative sentiment over oil demand growth. "We know there's going to be a lot of sources of [supply] growth coming in the next year or two, no matter what the price," Grant said. "So, the big question is what happens to US shale growth?"
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Francine set for Wednesday landfall as hurricane
Francine set for Wednesday landfall as hurricane
New York, 10 September (Argus) — Tropical storm Francine is expected to become a hurricane today, as it continues on a path north through offshore US Gulf of Mexico oil and gas production areas on its way to a Louisiana landfall Wednesday. Francine was located about 395 miles south-south west of Cameron, Louisiana, according to an 8am ET advisory from the National Hurricane Center. It is expected to remain off the coast of Texas and intensify to a Category 2 hurricane with winds of up to 100 mph, before landfall. The storm will track through an offshore region that accounts for about 15pc of US crude output and 5pc of US natural gas production. Oil and gas producers started to evacuate personnel from offshore facilities earlier this week and shut in some production. Ports are starting to restrict traffic and offshore lightering operations were paused off of Galveston, Texas, starting Monday night due to high seas. Shell said late Monday it was in the process of shutting in production at its Perdido platform after earlier pausing drilling operations from the facility located about 190 miles south of Houston. Drilling has also been suspended at its Whale facility, which is not scheduled to start operations until later this year. Non-essential personnel have been evacuated from Shell's Enchilada/Salsa and Auger assets, located about 120 miles south of Vermillion Bay, Louisiana. Chevron initiated shut-in procedures for its Anchor and Tahiti platforms 190 miles south of New Orleans and began transporting all personnel from the facilities. Production from its other operated platforms in the Gulf of Mexico remained at normal levels. Non-essential staff were also being removed from the Big Foot and Jack/St. Malo platforms. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. So far, no major problems are expected at BP's offshore facilities in the region. Ports in the northwestern Gulf of Mexico — including the Texas ports of Corpus Christi, Houston, Galveston, Texas City, Freeport, Beaumont and Port Arthur and the Louisiana ports of Cameron, Lake Charles and New Orleans — were set at port condition Yankee today, meaning gale force winds (39-54 mph) are expected within 24 hours and inbound vessel traffic over 500 gross tons is prohibited. The US Coast Guard's captain of the port of Houston suspended lightering operations at the Galveston Offshore Lightering Area (GOLA) at 11pm ET Monday. Lightering, the process in which crude or refined products are transferred from one ship to another, likely will be delayed off the Texas ports of Corpus Christi and Houston until Thursday due to sea conditions. By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Opec trims oil demand growth forecasts again
Opec trims oil demand growth forecasts again
London, 10 September (Argus) — Opec has cut its global oil demand growth forecasts for 2024 and 2025 for a second month in a row, but its projection for demand remains way above other outlooks. In its latest Monthly Oil Market Report (MOMR) the producer group revised down its 2024 demand growth projection to 2.03mn b/d from 2.11mn b/d. This is mainly due to lower than previously expected oil demand growth from China and the US. It now sees China's oil demand growing by 650,000 b/d this year, compared with 700,000 b/d in the previous report. It cut US oil demand growth by 60,000 b/d to 110,000 b/d. Opec's forecast for this year remains bullish. The IEA projects oil demand will increase by 970,000 b/d this year, and the EIA sees demand rising by 1.1mn b/d. Opec noted its 2mn b/d growth forecast for this year "remains well above the historical average of 1.4mn b/d seen before the Covid-19 pandemic." Oil prices have declined sharply in early September following weaker-than-expected economic data from the US and China. And on 5 September eight members of the Opec+ alliance agreed to delay a plan to start increasing output by two months. Opec also today cut its oil demand growth forecast for next year, by 40,000 b/d to 1.74mn b/d, again mainly driven by lower consumption growth estimates this time in the Middle East. On the supply side, the group has kept its non-Opec+ liquids growth estimate for 2024 and 2025 unchanged at 1.23mn b/d and 1.10mn b/d, respectively. Opec+ crude production — including Mexico — fell by 304,000 b/d to 40.655mn b/d in July, according to an average of secondary sources that includes Argus . This is about 2.15mn 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.
US Gulf producers curb operations before storm: Update
US Gulf producers curb operations before storm: Update
Adds latest NOAA forecast data, BP update. New York, 9 September (Argus) — Oil companies started to evacuate workers and halt some operations in the US Gulf of Mexico ahead of an expected hurricane later this week. Tropical storm Francine, which is forecast to strengthen to hurricane status as it moves north toward the Texas and Louisiana coasts by mid-week, threatens an offshore region that accounts for about 15pc of US crude output and 5pc of US natural gas production. Shell said it paused some drilling operations at the Perdido and Whale platforms, located about 190 miles south of Houston, and is withdrawing non-essential workers from its Enchilada/Salsa and Auger facilities. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. And Chevron said it is evacuating non-essential workers from its Anchor, Big Foot, Jack/St. Malo and Tahiti facilities, though production from company-operated assets remains at normal levels. Those facilities are located about 280 miles south of New Orleans. "We continue to supply our customers at our onshore facilities, where we are following our storm preparedness procedures and paying close attention to the forecast and track of the storm," Chevron said. So far no major problems are reported for BP's offshore facilities in the region. Francine is forecast to approach the Louisiana and upper Texas coast on Wednesday, according to the National Hurricane Center. In a 2pm ET NHC advisory, the storm was about 450 miles south-southwest of Cameron, Louisiana, with maximum sustained winds of 60 mph. Strengthening is expected over the next day and Francine is forecast to be a Category 1 hurricane, with winds of 85mph, on Wednesday evening, when it is expected to make landfall along the Louisiana coast. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf producers curtailing operations on storm threat
US Gulf producers curtailing operations on storm threat
New York, 9 September (Argus) — Oil companies started to halt offshore operations in the US Gulf of Mexico ahead of an expected hurricane strike later this week. Shell said it paused some drilling operations at the Perdido and Whale platforms — located about 190 miles south of Houston — as a precaution as tropical storm Francine threatened to develop into a hurricane as it moves north from the Bay of Campeche toward the Texas and Louisiana coasts. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. And Chevron said it is evacuating non-essential workers from its Anchor, Big Foot, Jack/St. Malo and Tahiti facilities, though production from company-operated assets remains at normal levels. Those facilities are located about 280 miles south of New Orleans. "We continue to supply our customers at our onshore facilities, where we are following our storm preparedness procedures and paying close attention to the forecast and track of the storm," Chevron said. Francine, which formed off the east coast of Mexico over the weekend, is forecast to become a hurricane as it moves north toward the Texas coast and northwestern Gulf, according to the National Hurricane Center. Current forecasts have it coming ashore somewhere between the Texas/Louisiana border and New Orleans Wednesday evening. A hurricane watch is in place for parts of southern Louisiana as Francine is expected to bring heavy rainfall and the risk of flash flooding across the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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