Last week in the world oil:
- Crude oil ended the week aroundUS$45/b, as the market largely shrugged off the attempted coup in Turkey andlooked ahead to healthy economic indicators from the US and China, although astronger US dollar weighed down on prices slightly.
Last week in Asian oil:
- Iran’s new oil industryinvestment framework will be ready by the end of July, with the once-isolatednation looking to entice international oil firms to assist in bringing its oilindustry out from the cold. Several Asian firms, including those from China,India and Iran, have already announced proposed plans, and the new contractshould bring in other Western firms, including BP, Total, Rni and Repsol. Thenew system replaces the old buy-back system where foreign firms were bannedfrom booking reserves or taking equity in Iranian companies.
- Pertamina’s goal of increasingits domestic output to meet federal targets by taking over private oil fieldsin Indonesia is gaining pace, with reports indicating that it is eyeing a partof the gas-rich Masela block in Arafura Sea, while expediting its takeover ofthe mature Mahakam block in East Kalimantan from Japan’s Inpex and Shell.
- China’s refineries processed arecord amount of crude in June, rising 3.2% y-o-y to 11 million b/d,contributing to the highest refining figure for the first six months of anyyear. The increase in mainly coming from the ‘teapot’ refineries – independentrefiners that were last year allowed to directly import crude – tempted byhealthy refining margins.
- Meanwhile, CNOOC (ChinaNational Offshore Oil Company) is aiming to cap its crude runs to 1 million b/dby 2020 to ease oil product oversupply, and instead focus on expanding itsservice station fleet to 2000 over the same period, as the upstream firmcontinues its push downstream.
- Flooding along the Yangtze hasdisrupted oil distribution and also damaged facilities in China’s central andsouthern regions, with Sinopec stating that some 500 of its gas stations weredamaged and some refining operations disruption.
- Indonesia’s state power firmPLN has criticised the government’s upcoming B30 mandate for gasoil used inindustrial/power burning. Indonesia has ambitious plans to move to higherbiodiesel blends to ease pressure on oil product imports, but PLN says that thenew rules are ‘unworkable’ as it has not allowed for sufficient technicaltesting, potentially damaging equipment.
- Echoing Japan, South Korea isaiming to become an LNG hub as well. The Korean efforts will focus on becominga regional LNG bunkering hub along its southern cost, as the shipping industrygradually moves away from burning dirty fuel oil to cleaner LNG. The hope isthat by creating a hub, Korea’s LNG import volumes will rise, giving it morebargaining power as a buyer.
- Thailand’s PTT wants to investmore in Malaysia, including a proposed LNG project with Petronas that PTT hopeswill ease its long-term energy demands. Thailand uses natural gas for almost70% of its power generation, traditionally from Thai gas fields in the Bay ofBangkok and its west offshore coast, but output is dwindling and PTT is lookingoverseas.
Last week in international markets
Upstream & Midstream
- ExxonMobil has declare a force majeure on its Nigerian Qua Iboe crudeexports, traced to a ‘system anomaly’ at its loading facility that may take upto four weeks to repair. The issue is thought not to be connected to therampage of the Niger Delta Avengers, which continue its sabotage with morepipeline attacks on Eni, Shell, Exxon and NNPC facilities in the last twoweeks.
- Aiming to capitalise on the post-Brexit shuffle in the UK government,where the climate change department has been bundled into the department ofbusiness, petrochemical giant Ineos is aiming to accelerate shale gasdevelopment in the UK by lodging up to 30 planning application for drill testwells through to the end of 2016.
- BP’s Argentine subsidiary Pan American Energy plans to spend some US$1.4billion to exploit Argentina’s conventional and unconventional resources,including the Cerro Dragón oil field and shale gas in Neuquén and Tierra delFuego.
- In a sign that US crude producers are seeing brighter times ahead, theUS oil rig count increased for the sixth time in seven weeks, up by 6 to 357,coming from Louisiana and New Mexico. The gas rig count rose by one, bringingtotal operational rigs in the US to 447.
- The 65 kb/d Cienfuegos refineryis Cuba will be partially shut down for 120 days, or four months, for extensivemaintenance. Technical problems have kept the Soviet-era refinery running atminimum capacity, causing shortages. Cuba depends on Venezuela for most of itscrude and oil imports, and problems there have affected the isolated Caribbeannation.
- South African Airways hascompleted a test flight using bio-jetfuel refined from tobacco, part of aglobal aviation push to move to renewable resources. With refining marginsdeclining, jet fuel a dependable bright spot in oil products, but even thismight come under pressure soon.
- Shell and its partners on theLNG Canada project have delayed the final investment decision on the proposedLNG export terminal on Canada’s western coast for the second time this year.‘Global industry challenges, including capital constraints’ were cited as thereason to delay the project, aimed at exporting LNG to Asia, principally due toan emerging LNG glut.
- ExxonMobil has made another bidto acquire Canada’s InterOil, outbidding Oil Search Ltd with a ‘superior offer’as it looks to merge InterOil’s large natural gas reserves in Papua New Guineawith its own. Exxon has faced issues in building pipelines, and InterOil’sfields are logistically less complicated, and closer to the proposed coastalLNG plant, speeding up the ambition of PNG becoming a major LNG exporter.
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In the last week, global crude oil price benchmarks have leapt up by some US$5/b. Brent is now in the US$66/b range, while WTI maintains its preferred US$10/b discount at US$56/b. On the surface, it would seem that the new OPEC+ supply deal – scheduled to last until April – is working. But the drivers pushing on the current rally are a bit more complicated.
Pledges by OPEC members are the main force behind the rise. After displaying some reticence over the timeline of cuts, Russia has now promised to ‘speed up cuts’ to its oil production in line with other key members of OPEC. Saudi Arabia, along with main allies the UAE and Kuwait, have been at the forefront of this – having made deeper-than-promised cuts in January with plans to go a bit further in February. After looking a bit shaky – a joint Saudi Arabia-Russia meeting was called off at the recent World Economic Forum in Davos in January – the bromance of world’s two oil superpowers looks to have resumed. And with it, confidence in the OPEC+ club’s abilities.
Russia and Saudi Arabia both making new pledges on supply cuts comes despite supply issues elsewhere in OPEC, which could have provided some cushion for smaller cuts. Iranian production remains constrained by new American sanctions; targeted waivers have provided some relief – and indeed Iranian crude exports have grown slightly over January and February – but the waivers expire in May and there is uncertainty over their extension. Meanwhile, the implosion in Venezuela continues, with the USA slapping new sanctions on the Venezuelan crude complex in hopes of spurring regime change. The situation in Libya – with the Sharara field swinging between closure and operation due to ongoing militant action – is dicey. And in Saudi Arabia, a damaged power repair cable has curbed output at the giant 1.2 mmb/d Safaniuyah field.
So the supply situation is supportive of a rally, from both planned and unplanned actions. But crude prices are also reacting to developments in the wider geopolitical world. The USA and China are still locked in an impasse over trade, with a March 1 deadline looming, after which doubled US tariffs on US$200 billion worth of Chinese imports would kick in. Continued escalation in the trade war could lead to a global recession, or at least a severe slowdown. But the market is taking relief that an agreement could be made. First, US President Donald Trump alluded to the possibility of pushing the deadline by 2 months to allow for more talks. And now, chatter suggests that despite reservations, American and Chinese negotiators are now ‘approaching a consensus’. The threat of the R-word – recession – could be avoided and this is pumping some confidence back in the market. But there are more risks on the horizon. The UK is set to exit the European Union at the end of March, and there is still no deal in sight. A measured Brexit would be messy, but a no-deal Brexit would be chaotic – and that chaos would have a knock-on effect on global economies and markets.
But for now, the market assumes that there must be progress in US-China trade talks and the UK must fall in line with an orderly Brexit. If that holds – and if OPEC’s supply commitments stand – the rally in crude prices will continue. And it must. Because the alternative is frightening for all.
Factors driving the current crude rally:
Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
Headlines of the week
Midstream & Downstream