Aramco, SABIC let contract for crude oil-to-chemicals complex (30 April 2018): By Robert Brelsford - OGJ Downstream Technology Editor: Saudi Aramco and Saudi Arabian Basic Industries Corp. (SABIC) have let a contract to KBR Inc. to advance their plan of building a fully integrated crude oil-to-chemicals (COTC) complex in Saudi Arabia. Under the newly awarded contract, KBR will deliver project management and front-end engineering and design for the COTC, Aramco said. The contract primarily covers finalization of the project scope, selection of technology providers, update on project economics, and performance of FEED, the project partners said. The parties did not disclose a value of the contract.
According to Hydrocarbon Processing's Construction Boxscore Database and HPI Market Data 2018, total capital expenditures (CAPEX) in the global petrochemical sector are more than $440 B. The majority of these projects are located in the Asia-Pacific, Middle East and US regions. When broken down by activity level, nearly 70% of active petrochemical projects globally are in preconstruction phases. The majority of petrochemical product demand is stemming from developing nations in non-OECD countries. These nations are showing signs of growing populations with more disposable incomes, which spurs demand for petrochemical products. (Source: Hydrocarbon Processing)
Oil steadies amid Korean peace pledge, threat of Iran sanctions (27 April 2018): By GRANT SMITH - LONDON (Bloomberg) -- Oil traded near $68 as investors weighed the impact of a possible U.S. pull-out from the Iran nuclear deal and the potential for a historic accord between the leaders of North and South Korea. Futures in New York slipped 0.4%, on course for a 0.7% drop this week. North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed to finally end seven decades of hostilities this year. Earlier this week, French President Emmanuel Macron predicted President Donald Trump will exit the Iran agreement, while U.S. Defense Secretary Jim Mattis said Thursday a decision on a withdrawal hasn’t been made. (Source: World Oil)
JGC, Fluor win $14B LNG Canada project order (26 April 2018): TOKYO, (Reuters) - Japan’s JGC Corp and U.S. firm Fluor have won orders to design and build the LNG Canada liquefied natural gas project for an estimated $14 billion, Japanese business daily Nikkei reported. Royal Dutch Shell, PetroChina, South Korea’s KOGAS and Japan’s Mitsubishi Corp are moving ahead on the long-stalled LNG project in Canada after a rise in energy prices, the report said. JGC and Mitsubishi spokesmen in Tokyo declined to comment on the report. LNG Canada is on track for a final investment decision later this year, an official for the province of British Columbia said last month. (Source: Gas Processing)
Expect Electricity Prices To Rise Soon (25 April 2018): By Leonard Hyman & William Tilles - Electricity prices in the U.S. (in real terms) have held steady for two decades. A remarkable record achieved because of: cost cutting during the initial days of industry deregulation, the abundance of natural gas that changed the fuel picture for electric generators and the declining cost of capital spurred in part by lower interest rates. In many industries, underperforming managements often look to fob off poor financial performance by claiming that their business has been uniquely victimized by a "perfect storm". But at least for the U.S.'s investor-owned electric utility industry, weather conditions have been perfect. However, these conditions are changing. (Source: Oil Price)
New York aims to cut greenhouse gas emissions (24 April 2018): The New York government in the US is planning to accelerate its energy-efficiency plan in the state in order to reduce greenhouse gas emissions and consumer energy costs, as well as create job opportunities. By accelerating its energy-efficiency plan, the government intends to meet New York’s climate goal of a 40% reduction by 2030. New York governor Andrew Cuomo said: “Energy efficiency is the most cost-effective way for New Yorkers to lower utility bills, curb harmful emissions and battle climate change. (Source: Power Technology)
19 Oil Tankers Held Hostage Off Yemeni Coast (23 April 2018): By Irina Slav - The Yemeni Houthis have captured 19 oil tankers and are keeping them from entering the Hodeidah port, according to reports from Saudi media quoting the Kingdom’s ambassador in Yemen. The ambassador suggested three possible reasons for the detention, including an attempt to extract money from the owners of the vessels, “the continued starvation of the Yemeni people”, and a plan to destroy the tankers, causing major environmental damage to the Red Sea. (Source: Oil Price)
Opec’s grand bargain on output is at risk of becoming a victim of its own success (22 April 2017): “In 1996, I thought $20 a barrel was reasonable; in 2006 I thought $27 a barrel was reasonable and now it is around $100 a barrel. I told them again it is reasonable," said former Saudi oil minister Ali Al Naimi in 2013. The plunge the following year took prices all the way back to $27 by February 2016. Now, with Brent crude at $74 on Thursday, the leading oil exporters are again braking their oil output too hard. US President Donald Trump responded to Opec’s latest monitoring committee meeting in his usual style: “Looks like OPEC is at it again…Oil prices are artificially Very High!” he tweeted. Stories circulating beforehand suggested Saudi Arabia might be seeking prices of $80 or even $100 per barrel. (Source: The National (UAE))
Despite Trump's concern an oil-price fall would carry risks (21 April 2018): Bloomberg - President Donald Trump may have a problem with oil prices being “very high,” but a decline would be a mixed bag for the US economy, thanks to the boom in American energy production. When prices plunged starting in mid-2014 and stayed low for the next two years, US producers felt the pain, much more and longer than was expected. A pullback in demand for oil-related equipment slowed mining and manufacturing output cooled investment and hurt jobs. For consumers, though, it expanded purchasing power, as less-expensive fill-ups at the petrol vpump left more money to spend elsewhere - supporting the biggest part of the economy.
Trump Slams OPEC For Manipulating Oil Prices (20 April 2018): By Tsvetana Paraskova - Oil prices reversed gains and dipped early on Friday after U.S. President Donald Trump tweeted that oil prices are “artificially very high” and “will not be accepted”, the day after the price of oil reached its highest level since the end of 2014. At 08:44 a.m. EDT on Friday, WTI Crude was down 0.57 percent at $67.94 and Brent Crude was down 0.66 percent at $73.29. President Trump tweeted early on Friday: “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” (Source: Oil Price)
Opec and its allies to maintain oil curbs despite prices topping $74, analysts say (19 April 2018): Jennifer Gnana - Opec is expected to continue taking barrels off the market despite three-year-and-a-half high oil prices of above $74 per barrel as the group’s monitoring committee, which includes Russia convenes in Jeddah on Friday to discuss the newer market dynamics and plans to forge a stronger alliance. Opec, which has been curbing output by 1.8 million barrels a day since January 2017, will need to “over-tighten the market rather than under-tighten the market”, to keep US shale from flooding the sector, said Michael Tran, managing director, global energy strategy at RBC Capital Markets in an interview with The National in Abu Dhabi.
IMF: Expect Oil To Fall Below $60 (18 April 2018): By Irina Slav - The International Monetary Fund dampened optimism about oil prices by forecasting the average for Brent at a little over US$58.24 a barrel next year, down from this year’s projected US$62.31. And things only get worse from there, with the IMF expects oil prices to drop to US$53.6 a barrel by 2023 as global economic growth slows down. These projections were contained in the IMF’s latest World Economic Outlook the authority released this week, and were motivated by expectations of increasing oil supply. (Source: Oil Price)
Saudi Arabia's first wind project receives four bids (17 April 2017): Jennifer Gnana - Saudi Arabia’s inaugural 400MW wind project has received four bids with the kingdom likely to award the scheme late June as the world’s largest oil exporter incorporates more renewable into its grid to free up crude for export. Acwa Power of Saudi Arabia, France’s EDF Energies Nouvelles, Italy’s Enel Green Power and France's Engie are the four bidders on the planned scheme at Dumat Al Jandal, in the northern Al Jouf region, according to a statement from the Saudi energy ministry’s Renewable Energy Project Development Office. (Source: The National (UAE))
New Sanctions On Russia Could Lift Oil Prices Further (16 April 2018): By Irina Slav - Crude oil prices started the week with a drop of about one percent as traders were still watching what happens in Syria next and despite the announcement that Washington will impose new sanctions on Russia for its support of Syrian President Bashar Assad. At the time of writing, Brent crude traded at US$71.87, down by 0.98 percent from Friday’s close, and West Texas Intermediate was down 0.85 percent to US$66.82 a barrel, after on Sunday the US Ambassador to the UN Nikki Haley said Washington would announce the third round of sanctions against Russia today. (Source: Oil Price)
Goldman Sachs: The Bullish Case For Oil (13 April 2018): By Irina Slav - The rapidly heating up situation in Syria has pushed Brent crude prices to US$72 a barrel, something that Goldman Sachs had predicted on Thursday. The investment bank’s stance on commodities in general is very upbeat because of the Middle East situation as well as the latest round of U.S. sanctions against Russia. “With low cross-asset correlations, increasing inflationary risks, a positive carry and the potential for oil supply disruptions in the Middle East, the strategic case for owning commodities has rarely been stronger,” Goldman analysts said, reiterating their “overweight” stance on commodities. (Source: Oil Price)
Trans Saharan Gas pipeline is the longest in the Europe, Middle East and Africa, says GlobalData (12 April 2018): The 4,400km onshore Trans Saharan Gas project pipeline (NIGAL pipeline) from Nigeria to Algeria is the longest planned gas pipeline in Europe, the Middle East and Africa (EMEA), said GlobalData in its analysis of oil and gas pipelines in the region. The Trans Saharan Gas project pipeline, also known as Trans-African gas pipeline, in which Trans Saharan Natural Gas Consortium is the operator, is scheduled to start operation by the end of 2021. The gas pipeline in Africa has a total capex of US$12bn, said GlobalData. The Nigerian National Petroleum Corporation (NNPC) holds a share of 45 per cent in the gas pipeline, with the Republic of Niger and Sonatrach SPA holding 10 per cent and 45 per cent respectively. (Source: Oil Review Africa)
Oil Prices Surge After Houthi Missile Attacks On Riyadh, Aramco Facilities (11 April 2018): By Tsvetana Paraskova - Houthi rebels in Yemen upped the ante on Wednesday, firing ballistic missiles over Riyadh, according to the Houthis, in retaliation for air raids by a Saudi-led coalition. The Royal Saudi Air Defense intercepted at least one ballistic missile over Riyadh on Wednesday. Multiple blasts were heard, and plumes of smoke could be seen from the capital. Yemen’s rebel Houthi movement launched earlier on Wednesday drone strikes on a Saudi Aramco facility and on an airport in Saudi Arabia, Houthi-owned Al-Masirah TV channel reported on Wednesday. (Source: Oil Price)
Oil rises after Xi's speech on optimism U.S.-China spat may ease (10 April 2019): By SHARON CHO AND HEESU LEE - SINGAPORE and SEOUL (Bloomberg) -- Oil advanced above $64/bbl after Chinese President Xi Jinping’s conciliatory tone in a closely watched speech raised hopes that U.S.-China trade tensions may ease, lifting risk assets around the world. Futures in New York erased earlier losses to rise as much as 1.5% as Xi vowed to open sectors from banking to auto manufacturing, increase imports and lower foreign-ownership limits. That came after U.S. President Donald Trump expressed optimism on reaching a deal with China. Markets from global equities to metals gained on expectations that a trade war between the world’s two largest economies can be averted.
Saudi Aramco takes first step to integrating petrochemicals business at United States' biggest oil refinery (8 April 2018): HOUSTON, (Reuters) - Saudi Aramco took the first steps to integrating a petrochemicals business into the United States' biggest oil refinery, which is operated by its subsidiary Motiva Enterprises. Aramco's Chief Executive Amin Nasser signed memoranda of understanding (MoUs) worth $8 billion-$10 billion with Honeywell UOP and Technip FMC to study petrochemical production technology for use in a chemical plant the company is considering building at the Port Arthur refinery. (Source: Hydrocarbon Processing)
The Trump “Twitter Effect” On Oil Prices (7 April 2018): By Kent Moors - On Monday, oil prices marked their sharpest one-day decline since February, following the markets as a whole. By 2:30 P.M. Eastern, the West Texas Intermediate (WTI) had dropped 3 percent for the day, while Brent was down 2.3 percent. Before Monday’s drop, both WTI and Brent were in the middle of an impressive rally – WTI had been up 6.5 percent for the month as of Thursday, while Brent had been up an even heftier 8.6 percent for the same period. (Source: Oil Price)
Oil inches down on Trump’s latest China trade threats (6 April 2018): Reuters - Oil prices fell on Friday after US President Donald Trump’s threat of new tariffs on China reignited fears of a trade war between the world's two biggest economies. Trump said on Thursday he had ordered US trade officials to consider tariffs on an extra $100 billion of imports from China, escalating tensions with Beijing. There is a risk for oil prices that China uses the bazooka option it has on US crude oil exports. China is the main importer (after Canada) of US crude oil, to the tune of about 400,000 barrels per day,” Petromatrix said. (Source: Oil Price)
Escalating Trade War Ups Pressure On Oil Prices (6 April 2018): By Irina Slav - Oil prices fell earlier today after President Trump threatened to slap more tariffs on Chinese products, with West Texas Intermediate shedding almost a percentage point at the time of writing, to trade at US$63.02 a barrel and Brent changing hands for US$67.85 a barrel, down 0.70 percent. President Trump yesterday told his trade administration to start working on additional tariffs worth another US$100 billion in Chinese goods in response to China’s retaliation to the initial tariffs on US$50 billion worth of Chinese goods. The retaliation was equal to the initial size of the U.S. goods package, which President Trump called “unfair”. (Source: Oil Price)
Petro-yuan may prove a bigger headache to US than trade wars (5 April 2018): While the world has been engrossed with the latest spats over tariff wars, and who and when countries will retaliate against the United States, the Chinese have very quietly set the ball rolling to end the US dollar’s hegemony in international oil trade. The country introduced in late March the first-ever yuan crude futures contracts on the Shanghai stock exchange. This raised some questions on whether the move was a symbolic one or a sign of long-term assertiveness by the Chinese to introduce the yuan into global trade relations and possibly as an alternative currency of international reserves to the US dollar. (Source: The National (UAE))
OPEC Production Slumps To 12-Month Low (4 April 2018): By Irina Slav - Crude oil production across OPEC slumped by 170,000 bpd last month to 32.04 million bpd, a Bloomberg survey among energy analysts. This is the lowest daily production rate in the cartel since April 2017, when it pumped 31.9 million bpd. Yet once again the drop was not the result of a conscious effort. Venezuela’s production continued to fall, shedding another 100,000 bpd in March, which made the struggling South American economy the main—if unwilling—contributor to the OPEC production decline. Venezuela pumped 1.51 million bpd last month, versus its OPEC quota of 1.97 million bpd. The country’s cumulative cut as of March stood at 557,000 bpd, versus a pledge cut of just 95,000 bpd. (Source: Oil Price)
Top Vietnam oil company says sea tensions hurt investment (3 April 2018): By JOHN BOUDREAU AND MAI NGOC CHAU - HANOI and HO CHI MINH CITY (Bloomberg) - Vietnam’s state-owned oil company said South China Sea tensions will hurt oil and gas exploration and efforts to attract foreign investment to offshore fields. The rare comment from Vietnam Oil and Gas Group, also known as PetroVietnam, follows a BBC report that Vietnam ordered Spanish energy company Repsol SA to suspend a project for a second time under pressure from China. Repsol halted exploration off Vietnam’s southeast coast last year, CFO Miguel Martinez said in a July 27 earnings call.
Iraq Approves Oil Production Capacity Boost (2 April 2018): By Irina Slav - Baghdad has approved an increase in Iraq’s crude oil production capacity to as much as 6.5 million bpd by 2022. This compares to a current production capacity of below 5 million barrels and production rates—as reported by the local energy ministry—of around 4.4 million bpd as per its OPEC quota. Crude oil export income accounts for the bulk of government revenues and is likely to continue to do so for the observable future as diversification options are few and the funds needed for a shift away from oil can only come from oil. (Source: Oil Price)
China's new oil trading platform comes with some risk (1 April 2018): Robin Mills - The launch of China’s oil futures contract last Monday marks the biggest shake-up in pricing crude for years. Grandiose claims have been made for it – that it will entirely transform oil price determination, or even lead to dethroning the dollar as the world’s reserve currency. However these scenarios turn out, this new contract does create concern for the Middle East countries and their premier export. World oil pricing has long been based on two benchmarks: Brent crude from the North Sea, quoted on the Intercontinental Exchange, and West Texas Intermediate (WTI) in the US, ... (Source: The National (UAE))