All eyes on timing of Colonial Pipeline restart
A restart decision today on the Colonial Pipeline network supplying nearly half of Atlantic coast transportation fuels will determine oil flows for weeks to come.
Moving forward with a phased restart of the pipeline network that moves 2.5mn b/d of gasoline, diesel and jet out of the US Gulf coast will ease panic-driven supply shortages. Failing a timely restart could rekindle import activity that cooled early this week and cut US Gulf coast refiners banking on the high-demand summer driving season that begins at the end of this month.
Federal regulators have eased fuel and transportation requirements to stretch supplies throughout the southeast, where distributors have fewer supply options. The Colonial Pipeline system moves fuel from Texas, Louisiana and Mississippi through a 5,500-mile (8,851km) network across the southeast and Atlantic coast up into the New York Harbor market.
Operators shut the network on 7 May to prevent a ransomware infection from spreading to critical pipeline systems. The company resumed some supply lines and terminals over the weekend, and has staged roughly 2mn bl of fuel for a restart. But the main gasoline and diesel pipelines feeding the system remain shut pending confirmation that they are safe to restart.
Priced to restart sooner
The company said on 10 May that it expected to begin a phased restart of the system this week — a timeline that discouraged imports. European benchmark Eurobob oxy gasoline that opened the week at a $4/t premium sank to a discount yesterday on the assumption that the supply would not be needed in the US. Northwest European gasoline premiums to front-month Brent fell by $1/bl following the plan announcement, and were at a $9.74/bl premium today, narrowing as Brent prices rose.
Those prices have fallen on confidence that the US already has sufficient supply. Gasoline stockpiles in the southeastern region most dependent on the system rose immediately before the shutdown, to within expected seasonal ranges for the region. Diesel stockpiles fell but remained at roughly expected volumes for the season.
Stockpiles were rising in the US Gulf coast, which relies on Colonial as an offtake for the majority of the fuel moving into the east coast. But adequate supply means little without the ability to deliver those volumes.
A prolonged outage on the pipeline network will force run cuts at the more than 7mn b/d of US Gulf coast refining capacity able to send fuel into the system. Some refiners have already adjusted rates. Conditions helped cut heavy sour crude prices in the US Gulf coast to their lowest levels since April 2020 as the region's complex refiners weigh reducing operations. But fading interest in offshore floating fuel storage suggests more confidence that pipeline operations will resume.
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Canaries' bio-marine fuel demand hit by ETS exemptions
Canaries' bio-marine fuel demand hit by ETS exemptions
London, 28 June (Argus) — Spanish energy firm Cepsa has delayed plans to supply marine biodiesel blends in the Canary Islands as increased demand for conventional bunker fuels and EU regulatory exemptions weigh on market fundamentals for the blended products. Cepsa's international marine fuels sales manager, Francisco Diaz Castro, told attendees at the Maritime Week Las Palmas conference last week that the firm remains committed to supplying marine biodiesel in the Canary Islands but is delaying it in response to a sharp rise in conventional bunker fuel demand in recent months, underpinned by vessels re-routing around the southern tip of Africa to avoid the risk of Houthi attacks in in the Red Sea. Vessels have been stocking up on bunker fuels before and after sailing around Africa's Cape of Good Hope to avoid stopping along the way. Latest data from the Spanish transport ministry show sales of conventional bunker fuel out of the Canary Islands last month increased by 3pc compared with April and by 41pc on the may last year (see table) . This demand growth has pushed suppliers to retain barge availability for conventional bunker fuels, reducing capacity to supply marine biodiesel blends. Market participants told Argus that another reason marine biodiesel demand in the Canary Islands has not picked up is EU regulatory exemptions for vessels sailing between the islands and mainland Spain. According to article 12 (3b) of the EU's Emissions Trading System (ETS) directive, "an obligation to surrender allowances shall not arise in respect of emissions released until 31 December 2030 from voyages between a port located in an outermost region of a member state and a port located in the same member state, including voyages between ports within an outermost region and voyages between ports in the outermost regions of the same member state, and from the activities, within a port, of such ships in relation to such voyages." Argus understands that this exemption applies to all vessels covered under the scope of the EU ETS, but would not apply if the vessel is sailing from an outermost region, such as the Canary Islands, to a different EU member nation, for example the Netherlands. A similar exemption for FuelEU Maritime regulations may be applicable as well, subject to member states asking for the exemption of the specific ports and routes for the vessels. Such an exemption could apply until 2029. Argus understands that requests from member states for this exemption will be published in the coming months. An exemption from FuelEU Maritime regulations could also be applied to routes connecting islands with a population under 200,000 people. This specific exemption would therefore not apply to Tenerife and Gran Canaria but may apply to other parts of the Canary Islands with smaller populations. By Hussein Al-Khalisy and Dafydd ab Iago Canary Islands liquid bunker sales t Month Las Palmas Tenerife Total Sales % m-o-m % y-o-y May-24 282,447 49,749 332,196 3 41 Apr-24 255,262 68,782 324,044 27 38 Mar-24 189,868 64,654 254,522 0 3 Feb-24 207,564 47,344 254,908 -6 0 Jan-24 219,962 51,894 271,856 16 27 Dec-23 187,889 47,306 235,195 4 1 Nov-23 181,218 45,940 227,158 5 -2 Spanish Transport Ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libya’s oil minister asks PM to clarify who's in charge
Libya’s oil minister asks PM to clarify who's in charge
London, 28 June (Argus) — Libya's sidelined oil minister Mohamed Oun has called on Tripoli-based prime minister Abdelhamid Dbeibeh to clarify who is in charge of the ministry. The question of who runs the oil ministry has been unclear since Oun returned to work on 28 May after a temporary suspension was lifted by a state watchdog. During his absence, Oun was replaced by oil ministry undersecretary Khalifa Rajab Abdulsadek, who represented Libya at the latest Opec+ meeting on 2 June. Dbeibeh has continued to recognise Abdulsadek as oil minister since Oun's return to work. In a lengthy statement defending his record, Oun complained that Dbeibeh has cut off all communication with him and that it is impossible to carry out his duties under such conditions. "The presence of a legitimate minister and an illegal minister" is creating confusion in the sector, Oun added. Dbiebeh was seen as a key player behind the initial removal of Oun. Argus understands that Oun's suspension was part of an attempt to clear the way for state-owned NOC to move ahead with key oil and gas projects the he opposed. But the move received pushback from powerful figures including the head of Libya's presidential council and the country's central bank governor, leading to Oun's suspension being lifted. "I don't expect this issue to be resolved any time soon. Dbiebeh is unlikely to want to get into a fight given his weakening position over the past few weeks," Jalel Harchaoui, a Libya specialist at the UK's Royal United Services Institute, told Argus . Although the position of oil minister in Libya has been largely relegated to a nominal role — and much less powerful than the chairman of NOC — Oun has successfully used his role to galvanise public opinion against deals and policies promoted by the government and NOC. Libya remains politically fragmented, with rival governments based in the east and west of the country, and control of Libya's oil sector is coveted by a wide array of factions tussling for power. The north African country produces just above 1.2mn b/d of crude and wants to boost this to around 2mn b/d, but this will only be possible if it can advance long-stalled projects. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Strikes disrupt bitumen at France Port Jerome refinery
Strikes disrupt bitumen at France Port Jerome refinery
London, 28 June (Argus) — Bitumen truck flows from ExxonMobil's 236,000 b/d Port Jerome refinery in northern France have been disrupted since 19 June by strike action at the neighbouring Gravenchon petrochemicals plant, according to market participants. Protesters outside the refinery entrance have blocked trucks, with the strike action linked to the petrochemical plant that is threatened with closure. Bitumen traders said they had been informed by ExxonMobil that a meeting will be held on 2 July between the company and its workers, and that the strike action is unlikely to stop before then. There has been less of an effect on cargo flows from Port Jerome. Four bitumen cargoes have loaded for export since the refinery's restart in May after an early March fire. The latest shipments have been to Bristol, southwest England, on the 6,165dwt An Hai Wan that arrived there on 25 June and to Galway, Ireland, on the 6,384dwt Bithav due in on 30 June. Port Jerome accounts for around 20pc of France's refining capacity and produces in excess of 600,000 t/yr of bitumen. ExxonMobil has yet to comment on the latest developments at Port Jerome/Gravenchon. By Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Biden, Trump trade attacks in presidential debate
Biden, Trump trade attacks in presidential debate
Washington, 28 June (Argus) — The first presidential debate of the 2024 election drew out few new details on energy policy, as President Joe Biden and former president Donald Trump hammered each other on issues such as inflation and the state of the US economy. The debate, held in Georgia on Thursday without a live audience, marked the first time Biden and Trump have shared a stage since their last debate in 2020. Biden, who is trailing Trump in many polls, at times struggled to clearly articulate his policy positions — or even to be heard — while Trump repeatedly sought to blame Biden for issues such as high inflation and the outbreak of military conflicts in Ukraine and Israel. "He has not done a good job," Trump said. "And inflation is killing our country. It is absolutely killing us." The substance of the debate was largely overshadowed by the candidates' inability to dispel voters' concerns about them. Needing to put to rest worries about his age, the 81-year-old Biden often appeared feeble and confused. Trump refused to acknowledge he lost the last election and continued to defend the mob that attacked the US Capitol on 6 January 2021. Biden throughout the debate defended his record on the economy, while focusing many of his attacks on Trump's personal conduct, including Trump's conviction on 34 counts in a case involving alleged hush money payments to an adult film star. Biden also criticized Trump's handling of the Covid-19 pandemic, which Biden said ultimately contributed to high inflation. "He didn't do much at all," Biden said. "By the time he left, things were in chaos." The debate repeatedly focused on federal tax policy, particularly a range of tax cuts enacted during Trump's presidency that are set to expire in 2025. A key provision of that tax package cut the top corporate tax rate to 21pc from 35pc. Biden said he would make the tax system more fair by increasing taxes on the wealthy, while arguing that Trump's policies would result in higher inflation and additional costs for consumers. Trump has said he would extend the expiring tax cuts, which are expected to cost $4 trillion over a decade, in addition to seeking deeper tax cuts and a 10pc tariff on all imports. Trump said he rejected the findings of many independent economists that such a tariff would drive up prices for consumers and add to inflation. "It's just going to cause countries that have been ripping us off for years — like China and many others, in all fairness to China — it's going to just force them to pay us a lot of money." Biden argued Trump's policies would result in higher inflation and additional costs for consumers. "He now wants to tax you more by putting a 10pc tariff on everything that comes into the United States of America," Biden said. Trump pivoted to issues such as energy and regulations when he was asked about his actions during the attack on the Capitol. "On January 6, we were energy independent," Trump said. And when pressed on whether he would pursue policies to deal with climate change, Trump focused on having "clean air" and "clean water", while defending his decision to pull the US out of the Paris climate accord. "It was a rip off of the United States, and I ended it because I didn't want to waste that money," Trump said. Biden said Trump did not do a "damn thing" when in office to clean up the air and water and criticized his inaction on climate change. Biden defended his suite of climate rules and support for clean energy, but he failed to tout passage of the Inflation Reduction Act, which provided support for electric vehicles, renewable energy and advanced manufacturing. On foreign policy, Trump insisted that a variety of global conflicts would have never occurred if he was in office. He contended that the war in Ukraine would abruptly be resolved if he were re-elected. "I'll have that war settled," Trump said. "I will get it settled, and I'll get it settled fast before I take office." Biden defended his record on foreign policy, saying he ushered through crucial support that has helped in the defense of Ukraine and Israel. Biden said that stood in contrast to Trump, who he said "encouraged" Russian president Vladimir Putin to invade other countries and has threatened to undermine Europe's defenses against military attacks. "This is a guy who wants to pull out of NATO," Biden said. The debate occurred just days before the US Supreme Court is expected to decide whether Trump, or any other president, should be immune from criminal prosecution for actions taken in office. Trump's attorneys have argued he should be immune from prosecution for any official acts while holding office, which could affect a criminal charge that he sought to undermine the 2020 election. 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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