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Last Updated: July 14, 2017
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Last week in the world oil:

Prices

  • Lingering concerns over the wealth of supply coming out of America, as well as recovering Libya and Nigeria, have kept crude oil prices on a weaker note. While pessimism is not yet at levels seen three weeks ago, crude prices remain in the mid-US$40/b levels – high enough to encourage US drilling, and low enough to send jitters among producers.

Upstream & Midstream

  • Petrobras and Chevron are both attempting to sell off their 70% and 30% stakes in the Maromba field in the Campos basin, as the shallow water heavy oil site proves to be unattractive to develop in the current climate.
  • Italy’s Eni has struck oil in the PL532 Licence, southwest of the Johan Castberg field in Norway’s Barents Sea. Preliminary estimates indicate that the discovery holds on 100-180 million barrels of oil, of which 25-50 million barrels are recoverable. While minor in size, it is an indication that increased drilling activity in the area is beginning to pay off.
  • Total announced a delay to the start of production at its Martin Linge field in the North Sea due to an accident in the shipyard building the rig platform in South Korea. The new start date is now in 1H2019. Total (51%), Petoro (30%) and Statoil (19%) are the stakeholders in the field.
  • As expected, the mild dip the week before gave way to a jump in drilling activity, as seven new oil and five gas rigs started up, bringing the total active number to 952. And, predictably, causing crude oil prices to slump.

Natural Gas and LNG

  • Freeport LNG has submitted a formal application with the US Federal Energy Regulator Commission to build a fourth liquefaction train at its Texas facility. If approved – and this is likely – the new train will add some 5.1 mtpa of capacity to the site, expected to enter service in 2022.
  • BP will be exiting Block 24 in Angola’s Kwanza basin, relinquishing its 50% stake where the Katambi-1 wildcat discovery was made to Sonangol and taking a US$750 million write-off in the process. Non-associated gas is of little value to upstream players in Angola as it is owned by the state.
  • Statoil will be pushing ahead with the development of the Snefrid Nord gas discovery near the Aasta Hansteen field in the country’s Norwegian Sea. Recoverable reserves of some five bcm of natural gas will be tied back to facilities in Aasta Hansteen, producing some 4 mcm/d of gas.
  • Central Europe seems to remain in two minds on relying on Russian gas. Just as Hungary signed a deal with Gazprom to link to the Turkish Stream pipeline by end-2019, Poland is looking West towards the US for Gulf Coast LNG to feed its growing gas requirements. Bulgaria and Serbia already have agreements to tap into Gazprom’s Turkish Stream pipeline system – after the South Stream project was cancelled in 2014 over Russia’s involvement in the Ukrainian conflict – while international connectors through Romania and Croatia are also being planned.

Corporate

  • Baker Hughes and GE Oil & Gas have completed their merger, creating BHGE, touted as the industry’s ‘first and only fullstream player’, covering all areas of the energy business from upstream, midstream and downstream. It trades under the name Baker Hughes, a GE company.

Last week in Asian oil

Downstream

  • Total and Iran have inked a preliminary US$2 billion deal to build three petrochemical plants, as Iran moves to realise its downstream ambitions. Total - which has extensive presence in Iran, most recently in South Pars Phase 11 – aims to build 2.2 million tons of petrochemical and polymer capacity with Iran’s National Petrochemical Company.
  • While Saudi Arabia’s promises to participate in Indonesia’s ambitious refining expansions may have proved hollow in the past, it’s latest commitment to assist Pertamina in upgraded the Cilacap refinery has weight, in light of the company’s move to establish key downstream sites across major Asian markets ahead of its IPO. The US$5 billion upgrade is aimed to expanding Cilacap’s capcity from 348 kb/d to 400 kb/d, while also expanding its secondary units to produce more transport fuels.

Natural Gas & LNG

  • Japan’s Fair Trade Commission has made a landmark ruling. All new contracts for LNG imports signed by Japanese buyers can no longer have restrictions on the resale of cargoes going forward, a decision that was pushed for by all Japanese LNG importers to allow them freedom to redirect suppliers and establish a trading network. For existing contracts that have not expired, the FTC directed buyers to communicate with major sellers – Qatar and Malaysia in this case – to review the ‘competition-restraining business practices’. This would be important in putting Japan’s existing LNG suppliers on equal footing with the new LNG volumes coming from North America, which deliver clause-less cargoes.
  • Remaining defiant in the face of sustained diplomatic pressure from Saudi Arabia, the UAE and its allies, Qatar has announced that it plans to boost natural gas production at its giant North Field by 20%. This raise was already in the cards, after a self-imposed moratorium was lifted in April, but has taken new significance as the tiny Gulf state finds itself isolated geographically and diplomatically. If the crisis drags on, then the 30% boost in LNG production capacity will go a long way to ensure sufficiency.
  • Gazprom’s Power of Siberia natural gas pipeline will start service in December 2019, moving the valuable fuel to China as the race to supply the fastest-growing natural gas consumer in the world heats up.

Corporate

  • Weak demand has lead Malaysia’s Lotte Chemical Titan Holding to cut the size of its IPO from the original range of RM7.60-8 to a lower range of RM6.40-8 per share, raising worries about the health of the country’s markets on a weak currency and government corruption scandals. Despite this, the IPO has been the largest since 2012, when plantations group Felda Global Ventures listed.
  • In an attempt to dilute the power held of its founding family, Japanese refiner Idemitsu Kosan plans to issue new shares to raise US$1.2 billion. The family has already announced it will file a court injunction to block the share issue, hoping to preserve a powerful stake that allowed the family to prevent Idemitsu’s merger with Showa Shell Sekiyu last year.

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May, 24 2022
Where to buy your Gun Parts from?

It is important to know where to gun parts from. There are many places you can buy them from, but it is important to choose the right place so that you get the best quality and service. There are many places where you can buy gun parts from. You can buy them from gun stores, online retailers, and even at a flea market.



One of the best places to buy gun parts from is Always Armed.They have a wide range of products available, they offer great customer service, and they have convenient shipping options.



Buying gun parts can be a difficult task. There are many different types of firearms and there is a huge variety of gun parts. The right place to buy gun parts depends on what you are looking for and what kind of firearm you have.



If you are looking for a specific part, then your best bet is to search online. You can find the part that you need at an affordable price and it will be delivered right to your door. If you want to save time, then this is the best option for you. If not, then your local gun store might be the best option for you because they have many different types of firearms as well as all kinds of other equipment that might come in handy for hunting or shooting sports.



When it comes to buying gun parts, you need to be very careful. There are a lot of scams out there and some companies just want to take your money and never send you the goods. 

May, 20 2022
High Oil Prices and Indonesia’s Ban on Oil Palm Exports

Supply chains are currently in crisis. They have been for a long time now, ever since the start of the Covid-19 pandemic reshaped the way the world works. Stressed shipping networks and operational blockages – coupled with China’s insistence on a Covid-zero policy – means that cargo tanker rates are at an all-time high and that there just aren’t enough of them. McDonalds and KFCs in Asia are running out of French fries to sell, not because there aren’t enough potatoes in Idaho, but because there aren’t enough ships to deliver them to Japan or to Singapore from Los Angeles. The war in Ukraine has placed a particular emphasis on food supply chains by disrupting global wheat and sunflower oil supply chains and kicking off distressingly high levels of food price inflation across North Africa, the Middle East and Asia. It was against this backdrop that Indonesia announced a complete ban on palm oil exports. That nuclear option shocked the markets, set off a potential new supply chain crisis and has particular implications on future of crude oil pricing and biofuels in Asia.  

A brief recap. Like most of Asia, Indonesia has been grappling with food price inflation as consequence of Covid-19. Like most of Asia, Indonesia has been attempting to control this through a combination of shielding its most vulnerable citizens through continued subsidies while attempting to optimise supply chains. Like most of Asia, Indonesia hasn’t been to control the market at all, because uncoordinated attempts across a wide spectrum of countries to achieve a similar level of individual protectionism is self-defeating.

Cooking oil is a major product of sensitive importance in Indonesia, and one that it is self-sufficient in as a result of its status as the world’s largest palm oil producer. So large is Indonesia in that regard that its excess palm oil production has been directed to increasingly higher biodiesel mandates, with a B40 mandate – diesel containing 40% of palm material – originally schedule for full implementation this year. But as palm oil prices started rising to all-time highs at the beginning of January, cooking oil started becoming scarcer in Indonesia. The government blamed hoarding and – wary of the Ramadan period and domestic unrest – implemented a Domestic Market Obligation on palm oil refineries, directing them to devote 20% of projected exports for domestic use. Increasingly stricter terms for the DMO continued over February and March, only for an abrupt U-turn in mid-March that removed the DMO completely. But as the war in Ukraine drove prices even further, Indonesia shocked the market by announcing an total ban on palm oil exports in late April. Chaotically, the ban was first clarified to be palm olein only (straight refining cooking oil), but then flip-flopped into a total ban of crude palm oil as well. Markets went haywire, prices jumped to historical highs and Indonesia’s trading partners reacted with alarm.

Joko Widodo has said that the ban will be indefinite until domestic cooking oil prices ‘moderate’. With the global situation as it is, ‘moderate’ is unlikely to be achieved until the end of 2022 at least, if ‘moderate’ is taken to be the previous level of palm oil prices – roughly half of current pricing. Logistically, Indonesia cannot hold out on the ban for more than two months. Only a third of Indonesia’s monthly palm oil production is consumed domestically; the rest is exported. An indefinite ban means that not only fill storage tanks up beyond capacity and estates forced to let fruit rot, but Indonesia will be missing out on crucial revenue from its crude palm oil export tax. Which is used to fund its biodiesel subsidies.

And that’s where the implications on oil come in. Indonesia’s ham-fisted attempt at protectionism has dire implications on biofuels policies in Asia. Palm oil prices within Indonesia might sink as long as surplus volumes can’t make it beyond the borders, but international palm oil prices will remain high as consuming countries pivot to producers like Malaysia, Thailand, Papua New Guinea, West Africa and Latin America. That in turn, threatens the biodiesel mandates in Thailand and Malaysia. The Thai government has already expressed concern over palm-led food price inflation and associated pressure on its (subsidised) biodiesel programme, launching efforts to mitigate the worst effects. Malaysia – which has a more direct approach to subsidised fuels – is also feeling the pinch. Thailand’s move to B10 and Malaysia’s move to B20 is now in jeopardy; in fact, Thailand has regressed its national mandate from B7 to B5. And the reason is that the differential between the bio- and the diesel portion of the biodiesel is now so disparate that subsidy regimes break down. It would be far cheaper – for the government, the tax-payers and consumers – to use straight diesel instead of biodiesel, as evidenced by Thailand’s reversal in mandates.

That, in turn, has implications on crude pricing. While OPEC+ is stubbornly sticking to its gentle approach to managing global crude supply, the stunning rebound in Asian demand has already kept the consumption side tight to match that supply. Crude prices above US$100/b are a recipe for demand destruction, and Asian economies have been preparing for this by looking at alternatives; biofuels for example. In the past four years, Indonesia has converted some of its oil refineries into biodiesel plants; in China, stricter crude import quotas are paving the way for China to clamp down on its status of a fuels exporter in favour of self-sustainability. But what happens when crude prices are high, but the prices of alternatives are higher? That is the case for palm oil now, where the gasoil-palm spread is now triple the previous average.

Part of this situation is due to market dynamics. Part of it is due to geopolitical effects. But part of it is also due to Indonesia’s knee-jerk reaction. Supply disruption at the level of a blanket ban is always seismic and kicks off a chain of unintended consequences; see the OPEC oil shocks of the 70s. Indonesia’s palm oil export ban is almost at that level. ‘Indefinite’ is a vague term and offers no consolation to markets looking for direction. Damage will be done, even if the ban lasts a month. But the longer it lasts – Indonesian general elections are due in February 2024 – the more serious the consequences could be. And the more the oil and refining industry in Asia will have to think about their preconceived notions of the future of oil in the region.

End of Article

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Market Outlook:

  • Crude price trading range: Brent – US$110-1113/b, WTI – US$105-110/b
  • As the war in Ukraine becomes increasingly entrenched, the pressure on global crude prices as Russian energy exports remain curtailed; OPEC+ is offering little hope to consumers of displaced Russian crude, with no indication that it is ready to drastically increase supply beyond its current gentle approach
  • In the US, the so-called NOPEC bill is moving ahead, paving the way for the US to sue the OPEC+ group under antitrust rules for market manipulation, setting up a tense next few months as international geopolitics and trade relations are re-evaluated

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May, 09 2022