Oxford vaccine result gives Brent a boost

: Crude oil, Oil products
20/11/23

Crude futures hit an almost three-month high earlier today after positive news on another Covid-19 vaccine.

UK-based pharmaceutical firm AstraZeneca said the vaccine it is developing with Oxford University has proved to be between 62pc and 90pc effective in clinical trials, depending on the dosage.

Interim analysis from trials on over 20,000 volunteers in the UK and Brazil show 62pc efficacy in those who were given two full doses at least one month apart. This rose to 90pc in patients given a half dose followed by a full dose. It is not clear why there is a difference.

"Excitingly, we have found that one of our dosing regimens may be around 90pc effective and if this dosing regime is used, more people could be vaccinated with planned vaccine supply," chief investigator of the Oxford vaccine trial Andrew Pollard said.

AstraZeneca chief executive Pascal Soriot described the results as "an important milestone in our fight against the pandemic".

"The vaccine can be stored, transported and handled at normal refrigerated conditions ... for at least six months and administered within existing healthcare settings," the firm said.

Ice Brent crude futures hit $46.08/bl at 09:00 GMT, up by 2.5pc from the previous close and the highest since 1 September, while the Nymex WTI contract rose to $43.36/bl, up by 2.9pc from the last close and also the highest since the beginning of September.

Oil prices have gained support from a succession of vaccine-related announcements in the last few weeks. Three other vaccine candidates, two in the US and one in Russia, have been over 90pc effective in clinical trials, according to their respective developers.

By James Keates

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25/01/02

Pakistan's NRL issues tender to sell January bitumen

Singapore, 2 January (Argus) — Pakistani refiner NRL is offering bulk and drummed bitumen cargoes totalling 8,000t for loading over January, in their latest export tender. The refiner is seeking fixed price bids on a fob Karachi basis for 2,000t of pen 80/100 drummed bitumen cargo and 6,000t of pen 60/70 bulk bitumen cargo. The drummed cargo tender is expected to be closed on 9 January and loaded within 30 days from the date of award, while the bulk cargo tender will close on 6 January, sources involved with the tender process said. The refiner had awarded its December-loading cargo to Switzerland-based trading firm Element Alpha, after withdrawing two previous tenders for loading over October and November. Pakistani cargoes are typically sought by international bitumen traders for delivery into South Africa. By Sathya Narayanan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US crude output at record 13.46mn b/d in Oct: EIA

24/12/31

US crude output at record 13.46mn b/d in Oct: EIA

Calgary, 31 December (Argus) — US crude production in October rose to a record high 13.46mn b/d on sustained strength in Texas and New Mexico, the Energy Information Administration (EIA) said today in its Petroleum Supply Monthly report. Output rose from 13.2mn b/d in September and from 13.15mn b/d in October 2023. The prior record of 13.36mn b/d was set in August. Texas, home to 44pc of the country's crude production, pumped out a record 5.86mn b/d in October, up from 5.8mn b/d in September and up from 5.57mn b/d in October 2023. New Mexico, which shares the prolific Permian basin with Texas, produced 2.08mn b/d in October, ticking down by 5,000 b/d from record highs set in August and September but up from 1.8mn b/d in October 2023. US offshore crude output in the Gulf of Mexico rebounded to 1.85mn b/d in October after hurricane activity in September cut production to 1.57mn b/d. Still, US Gulf of Mexico output was down from 1.94mn b/d in October 2023. Monthly production changes inland were mixed, with North Dakota falling to 1.16mn b/d in October from 1.21mn b/d in the month prior. Bakken shale basin producers had to contend with wildfires during the month and effects are still lingering for some, state officials said earlier this month. Colorado output rose in October to the highest in more than four years at 499,000 b/d. This was up from 476,000 b/d in September and the highest level for the state since March 2020. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: 2025 Hardisty heavy diffs may remain strong

24/12/31

Viewpoint: 2025 Hardisty heavy diffs may remain strong

Calgary, 31 December (Argus) — Heavy crude spot differentials in Alberta are expected to remain strong into next year, even with growing oil sands production and possible US import tariffs. After years of cost-overruns and construction delays, the 590,000 b/d Trans Mountain Expansion (TMX) commenced on 1 May, nearly tripling the capacity of crude able to reach Canada's Pacific coast and providing Alberta oil sands producers with increased access to buyers on the US west coast and Asia-Pacific. Extra egress capacity for Alberta crude westward has pulled previously apportioned volumes away from Enbridge's 3mn b/d Mainline system — Canada's main method of export to ship crude south to US refiners in the midcontinent and Gulf coast. In the fourth quarter, apportionment averaged just over 1pc for both light and heavy crude on the Mainline, significantly lower than the average apportionment of 21pc for lights and heavies in the fourth quarter last year. While president-elect Donald Trump's looming blanket tariff on all Canadian imports would re-direct more Albertan crude westward via TMX to Asia- Pacific buyers, many believe the tariff would be too harmful to US midcontinent refiners for Trump to actually carry out his threat. Prior to TMX's commencement, high apportionment combined with rising crude production heading into the winter months forced more crude onto railcars, which typically requires a $15/bl to $20/bl spread between Western Canadian Select (WCS) at Hardisty Alberta, and Houston, Texas, for uncommitted shippers to profit. With the redirection of apportioned volumes to buyers in the west, Canadian heavy spot differentials in Alberta have strengthened in a quarter when discounts have generally widened in recent years. Argus's WCS Hardisty assessment averaged a $12.08/bl discount to the CMA Nymex WTI during fourth quarter Canadian trade cycle dates, $11.52/bl stronger than the $23.61/bl discount averaged in the fourth quarter a year prior. Yet, crude output in Alberta's key oil sands is expected to rise heading into 2025, with production levels reaching record-high levels this year. Alberta crude output was 4.2mn b/d in October, according to the latest Alberta Energy Regulator (AER) data, up by 9.4pc year from a year earlier and the second highest monthly production on record. Alberta oil sands producers, meanwhile, have increased their crude production guidance for next year. Suncor expects to pump out 810,000-840,000 b/d across its upstream sector in 2025, up by 5pc from 2024. Cenovus expects to increase production next year by 4pc to between 805,000-845,000 b/d of oil equivalent (boe/d), and Imperial Oil plans to boost upstream production by 2pc to 433,000-456,000 boe/d. Egress capacity remains ample despite rising production heading into 2025. Total crude pipeline egress capacity out of Alberta is expected to be over 4.6mn b/d in 2025, with shippers still yet to utilize uncommitted space on the 890,000 b/d Trans Mountain pipeline. About 712,000 b/d or 80pc of the system is reserved for contracted shippers, with the remaining 20pc available for uncontracted shipments. With unconstrained egress capacity expected to persist, Suncor and Cenovus have both assumed WCS at Hardisty will average a strong $14/bl discount to WTI in 2025. In the near term, Trump's plans to impose a blanket 25pc tariff on all Canadian imports would threaten some US demand for Canadian crude. Yet, while some traders are pricing in the reality of US tariffs, most market participants are skeptical of whether Trump's tariff plans would extend to Canadian crude due to the co-dependency between Albertan producers and some US refiners. US midcontinent refiners, many of whom were financial backers of Trump's 2024 presidential campaign, are dependent on Canadian crude given a lack of access to alternative heavy sour crudes suited for their refineries. Canadian grades represent approximately 70pc of the US midcontinent refinery feedstock, with the remainder largely sourced in the US. US importers may take more crude from countries including Saudi Arabia, given the country has plenty of spare capacity to increase the production of heavy sour crude favored by US midcontinent refiners. However, replacing Canadian crude with waterborne supplies would result in a substantial increase in tanker demand. In August, only around 370,000 b/d of the 3.8mn b/d of Canadian crude imported by US refiners moved on tankers, Vortexa data show. Even if US refiners can replace Canadian and Mexican heavy crude, they are expected to face higher landed costs and, potentially, less reliable supplies. By Kyle Tsang Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: USGC gasoline oversupply unlikely to ease

24/12/31

Viewpoint: USGC gasoline oversupply unlikely to ease

Houston, 31 December (Argus) — Refinery closures and increased export opportunities in the US Gulf coast (USGC) will likely do little to alleviate an oversupply of regional gasoline in early 2025 as refining capacity in Mexico expands. LyondellBasell's 264,000 b/d Houston refinery tentatively plans to shut down during the first quarter of 2025 after previously delaying an end to production from the final quarter of 2023. Though some refiners welcome refinery shutdowns to provide a lift to falling margins , market participants have suggested that the upcoming closures will not considerably reduce the oversupply of product in the region. The Gulf coast's weekly average output totaled 2.2mn b/d in 2024, over one-fifth of the US's 9.7mn b/d weekly average. LyondellBasell's Houston refinery closure could cause total weekly production in the region to contract by as much as 12pc if it goes as planned. Product supplied, a proxy used by the US Energy Information Administration (EIA) for finished motor gasoline demand nationwide, has not recovered to pre-pandemic levels. Demand had fallen to fresh lows of 8.15mn b/d in 2020, when Covid-19 pandemic restrictions limited travel, but marginally regained strength after those measures were lifted. In the five years prior to the pandemic, gasoline product supplied ranged between a yearly average of 8.86mn-9.34mn b/d. In 2024, it averaged 8.85mn b/d, just below the pre-pandemic five-year average, but has grown for a second consecutive year after hitting a record low of 8.1mn b/d for 2022. In its energy outlook for 2025, the Louisiana State University's (LSU) Center for Energy Studies said it expected domestic demand to remain relatively flat, but that increased US net exports could shave off excess supply. Gulf coast gasoline stockpiles have exhibited steady growth since 2022, largely outpacing demand for the product, EIA data indicates. In the five years prior to the Covid-19 pandemic, weekly inventory averages ranged between 75mn-83mn bl. After hitting a record weekly average of 86.9mn bl in 2020, stockpiles have hovered above the pre-pandemic range for every year since, with 2024 weekly average inventory levels totaling 83.1mn bl. Gasoline prices peaked in 2022 due to rebounding gasoline demand since the pandemic. Though prices remain above the $2/USG mark since 2020, cash prices for 87 conventional finished gasoline in 2024 averaged 68¢/USG lower than in 2022 and 23¢/USG less than 2023's average, further depressing refining margins from a year earlier. Exports: a closing door Both exports to Latin America and domestic shipments to the US east coast have historically absorbed excess supplies of Gulf coast gasoline, but increased refining capacity and a potential trade war between the US and Mexico could choke off exports to Latin America. Market participants point to exports as a favorable outlet for excess gasoline supply with export data showing a strong correlation with the stock build in the Gulf coast since 2022. The US Gulf coast exported an average of 251,000 b/d in 2024 after four consecutive years of gains, according to trade analytics firm Kpler. Export levels out of the region are more than double the pre-pandemic four-year average of 121,750 b/d. However, Pemex's 400,000 b/d Dos Bocas refinery in Mexico is projected to come on line in late 2025 and will likely reduce the Gulf coast's share of the gasoline export market. Mexico imports nearly 90pc of its gasoline from the US , while roughly 82pc of Gulf coast exports land in Mexico, according to separate Kpler data. Mexican president Claudia Sheinbaum has continued expanding Mexico's energy independence, with 2024 marking the closest in nine years that gasoline production has approached import levels . Furthermore, US president-elect Donald Trump's potential 25pc tariff on imports from Canada and Mexico, including oil and gas, could spark retaliatory tariffs from Mexico, previously threatened by Sheinbaum. Should Trump go through with the tariffs when he takes office on 20 January, the tariffs between both countries would cut off gasoline exports and leave stockpile levels in the Gulf coast significantly higher. By Hannah Borai Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US Supreme Court tees up more energy cases

24/12/31

Viewpoint: US Supreme Court tees up more energy cases

Washington, 31 December (Argus) — The US Supreme Court is on track for another term that could significantly affect the energy sector, with rulings anticipated in the new year that could narrow environmental reviews and challenge California's authority to set its own tailpipe standards. The Supreme Court earlier this month held arguments in Seven County Infrastructure Coalition v Eagle County, Colorado , a case in which the justices are being asked to decide whether federal rail regulators adequately studied the environmental effects of a proposed 88-mile railway that would transport 80,000 b/d of crude. A lower court last year found the review, prepared under the National Environmental Policy Act (NEPA), should have analyzed how building the project would affect drilling and refining. Business groups want the Supreme Court to issue an expansive ruling that would limit NEPA reviews only to "proximate" effects, such as how rail traffic could affect nearby wildlife, rather than reviewing distance effects. The court recently agreed to hear a separate case that could restrict California's unique authority under the Clean Air Act to issue its own greenhouse gas regulations for newly sold cars and pickup trucks that are more stringent than federal standards. Oil refiners and biofuel producers in that case, Diamond Alternative Energy v EPA , say they should have "standing" to advance a lawsuit challenging those standards — even though they could now show prevailing in the case would change fuel demand — based on the alleged "coercive and predictable effects of regulation on third parties". These two cases, likely to be decided by the end of June, follow on the heels of the court's blockbuster decision in June overturning the decades-old "Chevron deference", a foundation for administration law that had given federal agencies greater flexibility when writing regulations. Last term, the court also limited agency enforcement powers and halted a rule targeting cross-state air pollution sources. This term's cases are unlikely to have as far-reaching consequences for the energy sector as overturning Chevron. But industry officials hope the two pending cases will provide clarity on issues that have been problematic for developers, including the scope of federal environmental reviews and the ability of industry to win legal "standing" to bring lawsuits. Two other cases could have significant effects for the oil sector, if the court agrees to consider them at a conference set for 10 January. Utah has a pending complaint before the court designed to force the US to dispose of 18.5mn acres of "unappropriated" federal land in the state, including oil-producing acreage. Utah argues that indefinitely retaining the land — which covers about a third of Utah — is unconstitutional. In another pending case, Sunoco and other oil companies have asked for a ruling that could halt a series of lawsuits filed against them in state courts for alleged damages from greenhouse gas emissions. President-elect Donald Trump's re-election could create complications for cases pending before the Supreme Court, if the incoming administration adopts new legal positions. Trump plans to nominate John Sauer, who successfully represented Trump in his presidential immunity case, as his solicitor general before the Supreme Court. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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