Opec’s Market Management Dilemma: From Bad To Worse?

...e Permian Basin, making the region straddling western Texas and southeast New Mexico the centerpiece of not only their US, but their global output plans (MEES, 15 March). Exxon says it is on track to hit 1mn boe/d Permian output by 2024 after paying $6bn in 2017 to expand its regional acreage (ME...

LNG Market Depressed, But For How Long?

...rsus a year earlier. Key Asian importers of LNG, China in particular, were left short of cargoes in the 2017-18 winter (MEES, 5 January 2018). Fearing a repeat, they took in a bumper 58.8mn tons in 4Q 2018, up 11% year-on-year, boosting average prices to over $11/mn BTU. But the winter turned out to...

Hormuz Escalation Spooks Major Asian Economies

...y of 420,000 b/d this year. The US has been making huge inroads into the Korean market, with volumes breaking records for the past five consecutive quarters. Having averaged just 36,000 b/d over the course of 2017, 2Q 2019 volumes averaged a massive 325,000 b/d. This was sufficient to place the US...

Aramco Trading Volumes Surge, With Crude Playing Enhanced Role

...st year saw it emerge as an increasingly active, albeit modest in scale, crude trader. Overall liquids volumes rose from 1.40mn b/d in 2017 to 2.17mn b/d in 2018 (see chart), and the firm says that it exited the year in excess of 4mn b/d. Volumes rose to 4.5mn b/d in 1Q 2019 and are planned to reach 6m...

South Korea 2Q19 Crude & Condensate Imports ('000 B/D): Middle East Share Up Quarter-On-Quarter But Still Down On 2017 Levels

Opec Production Purgatory: Cuts And More Cuts With No End In Sight

...nister Suhail al-Mazrouei warned in 2017 that there “is too much fluctuation within one year. It is not healthy for producers, and it is definitely not healthy for consumers. We need some sort of stability” (MEES, 17 November 2017). He reiterated the message this week in Vienna, saying “once we are cl...

LNG Prices Remain Under Pressure Amid Buoyant Supply, Lackluster Demand

...cond half of 2017. However it is not inconceivable that monthly takings could overtake number one Japan at some stage later this year: they came close in a pre-winter buying spurt last November, and lagged Japanese takings by just over 1mn tons for both April and May. Projections in the IEA’s latest ‘Ga...

Saudi Fuel Oil Consumption Soars

...e latest Jodi data to April shows that combined crude and fuel burn has averaged 772,000 b/d so far in 2019 (up 6% year-on-year), crude oil burn is down 16% year-on-year to 297,000 b/d. Based on seasonal trends, this implies that liquids burn could eclipse 2017’s record 974,000 b/d and push towards 1m...

Opec Faces Extended Demand Slump

...mand for Opec crude peaked at 32.55mn b/d in 2017, more than 3mn b/d above the 2020 forecast. Will this peak ever be regained?   *The bright side for Opec is that the IEA projects that global demand growth will accelerate in 2020 to its highest level since 2017. The IEA sees demand growth ri...

Opec Output Rises In May Ahead Of Latest Crunch Meeting

...entually forced Opec, Russia and their allies to implement supply cuts from January 2017 that have broadly been in force ever since (MEES, 10 December 2016). Demand growth meanwhile has been speeding along in excess of 1mn b/d each year, including around 1.9mn b/d over 2015, and has been projected at 1....

Opec Faces Uncertain Outlook As Focus Turns To Vienna

...16, 2017 and 2018 as well and isn’t merely the reclassification of NGLs as crude. STORM CLOUDS OVER VIENNA         This reduced market share has hit Opec’s weakest members the hardest. Iran and Venezuela are both facing major political challenges, while cash-strapped countries such as Algeria an...

Opec Output Slumps To 4-Year Low

...location. The two exceptions are the UAE and Nigeria. UAE output fell 30,000 b/d in March to 3.01mn b/d, putting it 60,000 b/d below its allocated figure – a notable reversal from the 2017-18 round of cuts when the UAE was a laggard. Meanwhile Nigerian output rose further to an 11-month high of 1....

2018 US Crude Exports Double; New Monthly High In Jan

...e US, up more than fourfold on 2017 but still well behind China (249,000 b/d) as the US’ top Asian customer. *Korean buying from the US (and other long-haul sources such as the North Sea) has been boosted by a tax break on imports of non-Mideast cargoes in a bid to diversify the country’s import sl...

Opec Slams US Sanctions For Heightened Instability

...Opec+ with the capacity to open the taps to do so. SAUDI AND RUSSIA ON THE SAME PAGE?   Russia certainly appears to be more hesitant over the benefits of continuing the Opec+ agreement, but then that is largely in line with the past two and a bit years (MEES, 1 December 2017). Russia’s sl...

OPEC Faces Prospect Of Declining Global Clout

...e market to cut prices following the November 2014 meeting (MEES, 5 December 2014), Opec changed tack in November 2016 and agreed to cut output (MEES, 2 December 2016). The move initially paid dividends for Opec, which saw demand for its crude rise from 31.9mn b/d in 2016 to 32.6mn b/d in 2017 ac...

Saudi Arabia Russia In Battle For Supremacy In China

...Saudi Arabia and Russia are increasingly cooperating in the energy sphere, having come together through the onset of Opec/Non-Opec production cuts since January 2017. But when it comes to the lucrative Chinese oil market, the two are engaged in a fierce battle for market share. China looks se...

India Crude Imports: Iraq, Saudi Dominant Despite Looming Long-Haul Challenge

...*India imported a record 4.51mn b/d of crude in 2018, up 4.5% on 2017. At 2.94mn b/d, volumes from the Middle East for 2018 were also a record, though the Gulf’s market share, at around 64% has remained static for the past three years (see Chart 1 and table, p20).   *The second half of...

Taiwan Crude Imports Hit 8-Year High, Opec Share At Record Low

...re stagnant last year, those from key African Opec producer Angola collapsed from 70,100 b/d in 2017 when Angola was the fourth largest supplier, to just 10,700 b/d for 2018. *Among Gulf suppliers, Saudi Arabia remains Taiwan’s top supplier, with 270,000 b/d for 2018, 30% of total imports. Vo...

Australia Challenges Qatar For Taiwan LNG Top Spot: Just The Prelude?

....4% on 2017’s previous record. But Taiwan had a bumper December, with its 2018 total of 16.9mn tons, up slightly on 2017’s previous high. Coupled with monthly record imports from China and Korea, December saw the highest ever monthly LNG trade volumes (see chart, p24). In Taiwan, Qatar remained we...

Heavy Outages Weigh On Seemingly Well-Supplied Market

...rrels of last choice (MEES, 18 January). In reality’, demand for crude from Opec’s Middle East core is arguably on the rise due to the dynamics flagged up by the IEA. This dynamic has been a concern ever since the first Opec+ cut agreement came into force in January 2017 (MEES, 21 July 2017). But wi...