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Last Updated: June 27, 2016
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  1. Global crude oil prices fell over Thursday and Friday, spilling into this week, as the UK’s Brexit decision to leave the European Union rocked financial and commodity markets worldwide; with the UK now dealing with more uncertainty over how or even if to proceed with the divorce, expect a bumpy road ahead.

  2. Saudi Arabia’s oil minister, Khalid Al-Falih, declared that ‘the oil glut is over’, with most interpreting the statement as the end to the kingdom’s attempt to wipe up US shale producers by raising production to keep prices low. Some 81 North American oil companies have gone bankrupt since the start of 2015, but Saudi Arabia has also taken a monetary hit. If this statement is followed by a scaling back of oil production, expect the oil markets to cheer and begin to beat a path to US$60/b.

  3. India has big ambitions for its eastern state of Assam, planning to raise oil and gas production there to 9.4 million metric tons of oil equivalent. All that oil will have to go somewhere, and India’s roadmap is to create a 5,000 km mega petroleum pipeline grid that would not only serve its north-eastern states, but also Bhutan, Bangladesh, Nepal, Myanmar and possibly even South-East Asia.

  4. Indonesia’s Pertamina is preparing to spend up to US$100 billion by 2030 to reach its target of 943 kb/d output target. Much of the focus is domestic – eyeing blocks of a production capacity of 35 kb/d and above held by private companies – but foreign investment is also being considered, particularly in Iran.

  5. The Kurdistan Regional Government, a semi-autonomous area of Iraq, is in talks with Iran on a pipeline deal that would transport Kurdish crude (and natural gas) across the border from Sulaimaniya and Kirkuk fields. Reports suggest that the volumes being look at are about 250 kb/d.

  6. The end of the April/May maintenance season in China has led to a boost in Chinese crude runs in June, with healthy refining margins also playing a factor. Sinopec, PetroChina and CNPC are all planning run rates of 80%, up from 75% in May, even as domestic petroleum demand appears to be slowing down.

  7. More Iranian deals ahead, this time in Central Asia. Iran and Kazakhstan are in talks to develop a joint oil refinery in Kazakhstan, using Kazakh crude. Offtake is earmarked to head to Iran, as the country attempts to balance its new-found popularity as a crude exporter with its own fuel hungry population.

  8. A fire broke out at the Petron oil refinery in Port Dickson, temporarily disrupting operations. Put out within hours, Petron is investigating the cause of the fire and has assured customers that there would be no supply disruptions.

  9. Growing demand for condensate in Asia, which yields the naphtha for petrochemicals production, is a boon for new condensate projects in Australia as Qatar and Iran both aim to scale back condensate exports in favour of domestic splitters. Australia’s Inchtys comes online next year, with 100 kb/d of output, with Gorgon and Angel already operational.

  10. Oil and gas exploration is one of the sectors earmarked to be opened to private investment in China, as part of the country’s bid to halt a worrying slide in investment growth. China will also attempt to encourage private investors by improving and providing more transparency in financing and market access, along with creating a more dynamic competitive environment.

  11. China’s CITIC and Japan’s Itochu are joining together to invest in oil and gas prices, aiming to capitalise on rising oil prices. The Chinese oilfield operator will collaborate with Itochu on identifying, acquiring and investing in E&P assets and projects worldwide.

  12. TransCanada is officially suing the United States government over the controversial Keystone XL oil pipeline, first supported in the US then cancelled by Barack Obama’s administration over environmental concerns. Keystone XL was to carry crude from Canada’s tar sands oil fields across to continental US to refineries in the Gulf of Mexico, with TransCanada seeking US$15 billion in compensation.

  13. While no new attacks in Nigeria occurred last week, with the country’s military ramping up operations, the Niger Delta Avengers have issued their over-arching demand – a referendum on Nigeria’s unity, aiming to break up the federation into as many as five separate countries; the separatist movement has been gaining in Nigeria, over complaints that the Niger Delta and south do not receive enough share of oil wealth.

  14. The US oil rig count dropped by 6 last week to 331, as worries over volatile oil prices snapped a three-week rise in the rig count. Gas rigs rose by 4, bringing the total operational rig count to 421.

  15. Plans to launch Nigeria’s first private oil refinery have been unveiled by Aliko Dangote, Africa’s richest man. The planned refinery has an optimistic start date of 2019, with capacity of 650kb/d and costing US$12 billion. It should help ease Nigeria’s chronic fuel shortages and expand the market in West Africa, with the idea of being the Africa equivalent of India’s Jamnagar refinery a long-term goal.

  16. Industrial action in France and high existing inventories have trimmed refinery appetite in Europe, with crude cargoes finding few buyers there; peak refinery utilisation comes in summer, but refiners are preferring to draw down stockpiles instead of importing fresh cargoes.

  17. International gas prices bucked the Brexit trend as the UK National Balancing Point prices rose in the wake of the referendum; being denominated in sterling, the sharp fall in the pound will have made natural gas cheaper for foreign buyers. The UK natural gas price is used as the reference mark for many gas traders, including in Asia. 

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China’s Strategic Petroleum Reserves

After the OPEC+ club met on September 1st,  and confirmed that it would be sticking to its plan of increasing its crude supply by 400,000 b/d a month through December, China made a rather unusual announcement. It announced that it was going to release some crude oil from its strategic petroleum reserves, selling it to domestic refiners that were grappling with crude’s heady price rise over 2021. The release of strategic oil reserves isn’t news in itself. What is news is that the usually secretive China did it and did it publicly.

And it did it to send a message to OPEC+: attempts to create artificial scarcity to maintain crude prices will not be tolerated. China has a right to feel that way. Even though great strides have been made to ease the effects of the Covid-19 pandemic worldwide, the virus is still exerting major effects on the global economy. Not least a massive ripple through the health of global supply chains that has seen the price of almost everything – plastics, semiconductors, agricultural commodity, lumber, steel – spike due to supply issues. In some cases, the prices of raw materials are at historic highs. Crude oil is still nowhere near its peak of above US$100/b, but it is high enough to be concerning, especially since it is happening within a major inflationary environment. And for a manufacturing-heavy economy like China, that matters. That matters a lot. So China’s National Food and Strategic Reserves announced that it would be releasing some of the country’s crude stocks to ‘better stabilise domestic market supply and demand, and effectively guarantee the country’s energy security’, a month after the country’s producer price inflation – ie. the cost of manufacturing – hit a 13-year high.

China made good on that promise, releasing 7.38 million barrels from its stockpile to domestic bidders on September 24 with more tranches expected. This was the first ever recorded release from China’s Strategic Petroleum Reserves (SPR), which began back in 2009 in serendipitous response to crude oil prices exceeding the US$100/b mark for the first time in 2008. But curiously, it may not have been the first ever release. So secretive is the SPR that China does not reveal the size of the reserve, although analysts have estimated it at some 300-400 million barrels with total capacity of 500 million barrels using satellite imaging. It has been speculated that batches of crude from the SPR have been released before on the quiet. But this is the first time China has gone public. Compared to the country’s overall oil consumption, 7.38 million barrels is small, almost tiny. And even if additional supplies are released, it will not make a major impact on China’s oil balances. But the message is what is important.

It is a message that China is not alone in sending. US President Joe Biden has already called on OPEC+ to accelerate its supply easing plans, given indications that the crude glut built up over 2020 has been all but erased. It is a notion that would be supported by some OPEC+ members – Russia, Mexico, the UAE – but so far, the discipline advocated by Saudi Arabia has held. The US too has attempted to release of its own crude reserve stocks – the largest in the world with a capacity of 727 million barrels – but this was also in response to the devastating impact of Hurricane Ida. India, China’s closest analogue to size and stage, has been complaining too. As a major oil importer and with a shakier economic situation, India is particularly sensitive to oil price swings. US$70/b is way above what New Delhi is comfortable with. But since India’s appeals to OPEC+ have fallen on deaf ears, it is attempting domestic directives instead. India’s state refiners have been ordered to reduce crude purchases from the Middle East, but with supply tight, there aren’t many other people to buy from. India has also been selling oil from its strategic reserve – officially stated to be for clearing space to lease storage capacity to refiners – although since India is more transparent about these announcements, the announcement isn’t as surprising.

Will it work? At least immediately, no. Crude prices did come under pressure in the wake of China’s announcement, but then recovered with Brent hitting US$75/b. But the fact that China timed the announcement of the September 24 auction to coincide with peak global trading time and with a lot of details (again an unusual move) shows that Beijing is serious about wielding its strategic reserves as weapons. If not to moderate crude prices, then to at least stabilise it. But this is a war of attrition. China may very well have a planned schedule to release more crude reserves over 2021 and 2022 if prices remain high, but its supplies are finite. And they will have to eventually be replenished, possibly at an even higher cost if the attempt to quell crude price inflation fails. Thus far, the details of the SPR release hint that this is a tentative dip in the pool: the volume of 7.38 million barrels was far lower than the 35-70 million barrels predicted by some market participants. And because successful bidders can lift the oil up to December 10, it seems unlikely that a second auction for 2021 is in concrete plans at this point.

But, at the very least, the message has been sent. Beijing has a tool that it can wield if crude prices get out of hand, and it is not afraid to use it. The first step might have been small, and it is a giant leap in what mechanics are available to influence crude prices. And as history has proven, China can be very quick to scale up and very single-minded in its approach. Over to you, OPEC+.

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Market Outlook:

  • Crude price trading range: Brent – US$73-76/b, WTI – US$71-74/b
  • Global crude benchmarks retain their strength, with Brent zipping past US$75/b, as supply-side issues and healthy demand continue to reverberate
  • After Hurricane Ida, US upstream players have gradually brought back some 70% of Gulf of Mexico production, easing some supply concerns, but a standoff between Libya’s Ministry of Oil and National Oil Corp could disrupt Libyan output

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September, 23 2021
Chicago Cubs Shirts: Wear Style with Ultimate Comfort!

For most people, embracing style can be really overwhelming. The bodycon dress might look fabulous but what about comfort? This type of dress clasp all the body and sometimes it becomes really hard to take a fine breath! In fact, the satin cloths that look super lustrous and voguish, but only the person who is wearing that knows how uneasiness feels like. Moreover, these types of clothing can not be worn on all occasions. You literally have to pick the right piece of outfit according to a specific occasion keeping the ambiance of the situation in mind. This is simply the reason, why ladies always complain that they have nothing to wear. To save people from this fashion crisis, sport wears emerges to be the ultimate lifesaver and in this connection, the mention must be made of Chicago Cubs Shirts.


This exclusive range of sportswear apparel is now currently flooding the market with exceptionally designed shirts that can be worn by people of all ages, gender and fashion taste. They are affordable and comfortable at the same time. Chicago Cubs Shirts adopt the classic sport design with exceptionally hemmed collar shapes that are sober and fashionable at the same time. The trend of sportswear can never be old and apart from sports lovers, people who worship fashion are now greatly turning their heads towards the contemplation of sporty shirts. Although they have a very simple design, they look highly versatile on everyone. 


Whether you are partying, enjoying social gathering, attending boring lectures, going on a date, traveling or just chilling at your couch with a cozy blanket, Chicago Cubs Shirts can be worn at any time and any situation. The material of the cloth is extremely comfortable and they are breathable. The shirts keep you from over sweating and at the same time, it allows you to look super cool in a sober manner. To know more please visit the websitehttps://www.sportsworldchicago.com/Chicago_Cubs_Shirts/


September, 16 2021
The New Wave of Renewable Fuels

In 2021, the makeup of renewables has also changed drastically. Technologies such as solar and wind are no longer novel, as is the idea of blending vegetable oils into road fuels or switching to electric-based vehicles. Such ideas are now entrenched and are not considered enough to shift the world into a carbon neutral future. The new wave of renewables focus on converting by-products from other carbon-intensive industries into usable fuels. Research into such technologies has been pioneered in universities and start-ups over the past two decades, but the impetus of global climate goals is now seeing an incredible amount of money being poured into them as oil & gas giants seek to rebalance their portfolios away from pure hydrocarbons with a goal of balancing their total carbon emissions in aggregate to zero.

Traditionally, the European players have led this drive. Which is unsurprising, since the EU has been the most driven in this acceleration. But even the US giants are following suit. In the past year, Chevron has poured an incredible amount of cash and effort in pioneering renewables. Its motives might be less than altruistic, shareholders across America have been particularly vocal about driving this transformation but the net results will be positive for all.

Chevron’s recent efforts have focused on biomethane, through a partnership with global waste solutions company Brightmark. The joint venture Brightmark RNG Holdings operations focused on convert cow manure to renewable natural gas, which are then converted into fuel for long-haul trucks, the very kind that criss-cross the vast highways of the US delivering goods from coast to coast. Launched in October 2020, the joint venture was extended and expanded in August, now encompassing 38 biomethane plants in seven US states, with first production set to begin later in 2021. The targeting of livestock waste is particularly crucial: methane emissions from farms is the second-largest contributor to climate change emissions globally. The technology to capture methane from manure (as well as landfills and other waste sites) has existed for years, but has only recently been commercialised to convert methane emissions from decomposition to useful products.

This is an arena that another supermajor – BP – has also made a recent significant investment in. BP signed a 15-year agreement with CleanBay Renewables to purchase the latter’s renewable natural gas (RNG) to be mixed and sold into select US state markets. Beginning with California, which has one of the strictest fuel standards in the US and provides incentives under the Low Carbon Fuel Standard to reduce carbon intensity – CleanBay’s RNG is derived not from cows, but from poultry. Chicken manure, feathers and bedding are all converted into RNG using anaerobic digesters, providing a carbon intensity that is said to be 95% less than the lifecycle greenhouse gas emissions of pure fossil fuels and non-conversion of poultry waste matter. BP also has an agreement with Gevo Inc in Iowa to purchase RNG produced from cow manure, also for sale in California.

But road fuels aren’t the only avenue for large-scale embracing of renewables. It could take to the air, literally. After all, the global commercial airline fleet currently stands at over 25,000 aircraft and is expected to grow to over 35,000 by 2030. All those planes will burn a lot of fuel. With the airline industry embracing the idea of AAF (or Alternative Aviation Fuels), developments into renewable jet fuels have been striking, from traditional bio-sources such as palm or soybean oil to advanced organic matter conversion from agricultural waste and manure. Chevron, again, has signed a landmark deal to advance the commercialisation. Together with Delta Airlines and Google, Chevron will be producing a batch of sustainable aviation fuel at its El Segundo refinery in California. Delta will then use the fuel, with Google providing a cloud-based framework to analyse the data. That data will then allow for a transparent analysis into carbon emissions from the use of sustainable aviation fuel, as benchmark for others to follow. The analysis should be able to confirm whether or not the International Air Transport Association (IATA)’s estimates that renewable jet fuel can reduce lifecycle carbon intensity by up to 80%. And to strengthen the measure, Delta has pledged to replace 10% of its jet fuel with sustainable aviation fuel by 2030.

In a parallel, but no less pioneering lane, France’s TotalEnergies has announced that it is developing a 100% renewable fuel for use in motorsports, using bioethanol sourced from residues produced by the French wine industry (among others) at its Feyzin refinery in Lyon. This, it believes, will reduce the racing sports’ carbon emissions by an immediate 65%. The fuel, named Excellium Racing 100, is set to debut at the next season of the FIA World Endurance Championship, which includes the iconic 24 Hours of Le Mans 2022 race.

But Chevron isn’t done yet. It is also falling back on the long-standing use of vegetable oils blended into US transport fuels by signing a wide-ranging agreement with commodity giant Bunge. Called a ‘farmer-to-fuelling station’ solution, Bunge’s soybean processing facilities in Louisiana and Illinois will be the source of meal and oil that will be converted by Chevron into diesel and jet fuel. With an investment of US$600 million, Chevron will assist Bunge in doubling the combined capacity of both plants by 2024, in line with anticipated increases in the US biofuels blending mandates.

Even ExxonMobil, one of the most reticent of the supermajors to embrace renewables wholesale, is getting in on the action. Its Imperial Oil subsidiary in Canada has announced plans to commercialise renewable diesel at a new facility near Edmonton using plant-based feedstock and hydrogen. The venture does only target the Canadian market – where political will to drive renewable adoption is far higher than in the US – but similar moves have already been adopted by other refiners for the US market, including major investments by Phillips 66 and Valero.

Ultimately, these recent moves are driven out of necessity. This is the way the industry is moving and anyone stubborn enough to ignore it will be left behind. Combined with other major investments driven by European supermajors over the past five years, this wider and wider adoption of renewable can only be better for the planet and, eventually, individual bottom lines. The renewables ball is rolling fast and is only gaining momentum.

End of Article

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Market Outlook:

  • Crude price trading range: Brent – US$71-73/b, WTI – US$68-70/b
  • Global crude benchmarks have stayed steady, even as OPEC+ sticks to its plans to ease supply quotas against the uncertainty of rising Covid-19 cases worldwide
  • However, the success of vaccination drives has kindled hope that the effect of lockdowns – if any – will be mild, with pockets of demand resurgence in Europe; in China, where there has been a zero-tolerance drive to stamp out Covid outbreaks, fuel consumption is strengthening again, possibly tightening fuel balances in Q4
  • Meanwhile, much of the US Gulf of Mexico crude production remains hampered by the effects of Hurricane Ida, providing a counter-balance on the supply side

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September, 16 2021