Tag Archives: crude updates

India now Nigeria’s biggest crude oil buyer

15 Jul

India now leads the United States in the purchase of crude oil from Nigeria, Indian High Commissioner to Nigeria Mahesh Sachdev has said.

Read more: India now Nigeria’s biggest crude oil buyer.

Oil edges down to $103/bbl, supply worry eases

9 Jul

NYMEX crude for August delivery was down 16 cents at USD 102.98 a barrel by 0018 GMT, after settling down 8 cents at USD 103.14 on Monday. It touched a 14-month high of USD 104.12 on Monday.

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US crude futures retreated to just below USD 103 a barrel on Tuesday, pressured by the return of a Libyan oilfield and Iraqi pipeline that eased concerns about global oil supplies.

Also Read : checkmatetrades

Fundamentals

NYMEX crude for August delivery was down 16 cents at USD 102.98 a barrel by 0018 GMT, after settling down 8 cents at USD 103.14 on Monday. It touched a 14-month high of USD 104.12 on Monday.

London Brent crude for August delivery was down 34 cents at USD 107.09 a barrel, after settling down 29 cents.

Libya’s major Sharara oilfield will resume operations after an agreement was reached with the armed group that shut it down last month, a senior Libyan oil source said on Monday.

A pipeline from Iraq to the Turkish port of Ceyhan will also resume operations in two to three days following an interruption caused by a leak, two sources in Iraq’s state-run North Oil Company (NOC) said on Monday.

Clashes in Egypt that left at least 51 people dead heightened geopolitical risk, but there has been no impact to ports and shipping through the Suez Canal.

Egypt will hold new parliamentary elections once amendments to its suspended constitution are approved in a referendum, the interim head of state decreed on Monday, setting out a time frame that could see a legislative vote in about six months.

US commercial crude oil stocks likely fell by 3.3 million barrels last week, a Reuters poll showed on Monday. Distillate stocks likely rose by 1.3 million barrels, while gasoline stocks were seen up 1.2 million barrels.

Market News

The Standard & Poor’s 500 Index rose 0.53 percent on Monday, edging closer to its all-time high set in May.

The dollar paused in its rally as investors bought beaten-down currencies such as the Australian dollar on Tuesday, although its broad uptrend is seen intact as the market tries to position for when the US Federal Reserve will start to slow its stimulus.

Checkout commodity sources

MCX Crude Oil bearish; support 5600 and 5580

22 Jun

For intra-day, support for the commodity is seen at 5600 while resistance is seen at 5630. If prices break the level of 5600 then prices are expected to move towards 5580. MCX crude oil futures for July delivery was seen trading down by 0.04% at Rs. 5612 per barrel as of 11.56 PM IST on Saturday.

MUMBAI: The trend in crude oil futures for July delivery on India’s Multi Commodity Exchange (MCX) looks bearish for the day and traders are advised stay at sell side.

“For intra-day, support for the commodity is seen at 5600 while resistance is seen at 5630. If prices break the level of 5600 then prices are expected to move towards 5580,” said Amrita Mashar, Research Analyst at Commodity Online.

“Traders may take buy position near 5610 with the stop loss of 5630 for the target near 5580,” she added.

MCX crude oil futures for July delivery was seen trading down by 0.04% at Rs. 5612 per barrel as of 11.56 PM IST on Saturday.

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Last week, in the global market, crude oil prices fell to the lowest since September on higher than expected rise in US crude oil inventories, concerns over economic recovery in China and the United States and US Federal Reserve Chairman Ben Bernanke stated that the Central Bank may end its monetary stimulus partially this year and potentially withdrew it by the middle of next year on the assumption that US economy is improving.

WTI crude oil futures for August delivery on NYMEX closed down by 1.32% at $ 93.89 per barrel on Friday.

Brent crude oil futures for August delivery on NYMEX closed down by 1.19% at $100.94 per barrel on Friday.

What factors may influence Japanese Oil demand for the rest of 2013

10 Jun

“Although this (oil consumption) is extremely high, the situation is normalising with crude oil consumption for generation down 27% y/y while fuel oil demand for the same purpose has decreased 22% y/y. We expect this downward trend in crude oil and fuel oil usage to continue over H2 13,” Barclays estimated.

The Fukushima nuclear power plant crisis did take at least 48 of the 50 nuclear reactors in Japan offline in a stage-by-stage manner resulting in heavy reliance on crude oil and its distillates for power generation. But, so far into this year, Japanese demand for oil has “normalised” as strong numbers have dissolved into thin air. This is primarily due to the following set of reasons:

–Decreased industrial demand: Q1 Industrial Production average of Japan was 5.9% lower y/y which made a dent on the electricity generation and consumption figures.

–Fall in heating demand: Higher temperatures from late March to early April prevented a surge in heating demand.

–Nuclear power capacity making a comeback: The share of nuclear power in Japan’s energy mix has increased from 2% to 5.3%.

–High base usage and limited capacity expansion for oil-powered facilities.

Weird stats

It is opportune at this moment to recall some statistics in this regard:

–As mentioned earlier there had been 50 reactors in Japan functioning before the nuclear disaster.

–These reactors generated about 22.62 mn MWh at the end of 2010. The actual capacity of the reactors was double the number!

–As the plants were shut down one-by-one in Japan, the power generation figures dropped to 1 million MWh, a 96% drop compared to 22.62 million MWh!

–Recent days have seen the generation climbing to 1.76 million MWh

–April saw Japan burning 220% additional crude oil and 94% in extra fuel oil compared to pre-Fukushima levels.

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“It is unclear how many reactors will be coming back online or how many will have to be decommissioned permanently based on the findings of the regulation authority,” Barclays said in the report on Japanese oil demand. Hydro and thermal sources are now sharing the power generation burden of Japan these days.

“Although this (oil consumption) is extremely high, the situation is normalising with crude oil consumption for generation down 27% y/y while fuel oil demand for the same purpose has decreased 22% y/y. We expect this downward trend in crude oil and fuel oil usage to continue over H2 13,” Barclays estimated.

So, what will influence one of the biggest economies in the planet in the second half of the year as far as crude oil demand is concerned?

Influencing negatives

Weakening of Japanese Yen: As Japanese Yen has weakened to 100 for a Dollar, compared to 80 last year, Japan’s crude import basket has turned out to be very expensive. For instance, March 2013 had seen the basket becoming most expensive since October 2008 breaking the 10500 mark and reaching 10875 for the month. The highest this basket has come to rule was at 14627 in August 2008. (But that was primarily due to a rally in underlying crude oil prices.)

Needless to say, importers of Japanese crude and fuel oils have begun to feel the heat of purchase. This should be read in the context of a possibility of range-bound trade in crude oil in the days to come.

Meanwhile forex market strategists at Barclays, “expect USD/JPY to rebound to 103 over the next 3-6 months because they expect it to be a bellwether if the government’s policy for targeting higher inflation is credible. Additionally, they expect the US economy to gain strength in H2, 13 and support market expectations of Fed tapering, leading to broad USD strength.”

Not good news for Yen bulls as well as crude oil importers in Japan.

Potential nuclear renaissance: It is clear that liberal democrats who are in power in Japan, especially, the Japanese PM Shinzo Abe want to push the start button in nuclear reactors, as and when the regulatory authorities give a green signal. The measure is deemed important by Abe and his team as only then would his party be able to carry out its economic agenda and secure their long term interests.

But the ride may not be smooth. On June 2, thousands of protesters took to streets in Tokyo in defiance of the Abe’s plan. They have alreadyc collected almost 8 million signatures against it. Meanwhile a nuclear plant in Tsuruga was found to be sitting on a fault line and thereby susceptible to earth quakes making its chance of getting approved almost nil.

“The authorities will continue to review plants and applications for potential restarts, though Abe’s push for imminent wide-scale nuclear power seems highly unlikely,” Barclays said in the report.

Influencing positives

Diesel cars and Abenomics: Diesel cars are becoming much more popular in Japan as the they increasingly turn out to be eco-friendly and subsidies for clean diesels kick in. No wonder Japanese gasoil demand has jumped 2.5% year-to-date.

“Last year, the higher call on fuel oil and crude for power generation trumped the negligible flat growth in gasoline, kerosene and gasoil. This year, we expect these refined products, particularly gasoil, to produce a slightly more measurable rate of growth,” Barclays said in the report.

However, domestic sales of new cars in Japan as well as trucks and buses have been falling by 7.3% y/y in May even as the drop may not be as steep as had been expected.

Meanwhile, with Abenomics under work, Japanese real GDP growth is expected to see annualised gains of 3.5%-3.7% over the four quarters starting second quarter in 2013 as Yen weakens further and fiscal spending climbs along with wealth effect taking routes on equity rallies.

All these factors can positively contribute to oil demand growth in Japan.

SPR sales: In a bid to replace heavier grades of crude oil with lighter ones–given the improved appetite for latter–Japan’s METI sold about 4.4 mb of crude from the country’s Strategic Petroleum Reserves.

The ministry is estimating to buy back 6.29 mb of light grades, saying they are waiting for the right moment. If carried out over a two-month span, it would boost imports by an additional 104 thousand b/d.

“In our view, given further depreciation of the yen expected…we would not be surprised if they come into the market sooner rather than at the tail end of the year,” Barclays said.

Taking all of these factors into consideration, Barclays expects Japanese oil demand growth to come down by a marginal 0.03 mb/d or 0.63% in 2013.