China is now the world's largest crude oil importer
China surpassed the United States in annual gross crude oil imports in 2017 by importing 8.4 million barrels per day (b/d) compared with 7.9 million b/d of U.S. crude oil imports (Figure 1). China had become the world's largest net importer (imports less exports) of total petroleum and other liquid fuels in 2013. New refinery capacity and strategic inventory stockpiling combined with declining domestic production were the major factors contributing to the recent increase in Chinese crude oil imports.
In 2017, an average of 56% of China's crude oil imports came from countries within the Organization of the Petroleum Exporting Countries (OPEC). The share of Chinese crude oil imports from OPEC countries declined from a peak of 67% in 2012, while Russia and Brazil increased their market share of Chinese imports more than any other country, from 9% to 14% and from 2% to 5%, respectively (Figure 2). Imports from Russia, which passed Saudi Arabia as China's largest source of foreign crude oil in 2016, totaled 1.2 million b/d in 2017, while Saudi Arabia accounted for 1.0 million b/d. OPEC countries and some non-OPEC countries, including Russia, agreed to reduce crude oil production through the end of 2018, which may have allowed other countries to increase their market share in China in 2017.
Several factors are driving the increase in Chinese crude oil imports. China had the largest decline in domestic petroleum and other liquids production among non-OPEC countries in 2016 and EIA estimates it will have had the second-largest decline in 2017. EIA estimates that total liquids production in China averaged 4.8 million b/d in 2017, a year-over-year decline of 0.1 million b/d (2%), and expects the decline to continue through 2019, according to EIA's January 2018 Short-Term Energy Outlook (STEO).
In contrast to declining domestic production, EIA estimates that Chinese growth in consumption of petroleum and other liquid fuels in 2017 was the world's largest for the ninth consecutive year, growing 0.4 million b/d (3%) to 13.2 million b/d. Crude oil import growth has been larger than consumption growth because of inventory building for strategic petroleum reserves. In addition, China has reformed its refining sector through liberalizing import and export restrictions. Since mid-2015, China granted crude oil import licenses to independent refineries in northeast China, which have since increased refinery utilization and crude oil imports.
Another factor contributing to increased Chinese crude oil imports is higher refinery runs, which increased by an estimated 0.5 million b/d in 2017 to 11.4 million b/d, driven in part by two refinery expansions in the second half of the year. A 260,000 b/d refinery in Anning in Yunnan province started operating in the third quarter of 2017. This refinery had been delayed several times because of tariff disputes with Myanmar, where crude oil primarily from Saudi Arabia first lands and is then piped to the Anning refinery. In Guangdong province, China National Offshore Oil Corporation (CNOOC) expanded capacity of its Huizhou refinery by 200,000 b/d, increasing its imports from various sources in the third and fourth quarters of 2017 (Figure 3).
Infrastructure expansions will likely contribute to further increases in Chinese crude oil imports. In January 2018, China and Russia began operating an expansion of the East-Siberia Pacific Ocean (ESPO) pipeline, doubling its delivery capacity to approximately 0.6 million b/d (Map – China Import Locations). According to trade press reports, as much as 1.4 million b/d of new refinery capacity is planned to open in China by the end of 2019. Given China's expected decline in domestic crude oil production, imports will likely continue to increase during the next two years.
U.S. average regular gasoline and diesel prices increase
The U.S. average regular gasoline retail price rose 4 cents from the previous week to $2.61 per gallon on January 29, 2018, up 31 cents from the same time last year. West Coast prices increased over six cents to $3.09 per gallon, Midwest prices rose four cents to $2.51 per gallon, Gulf Coast prices increased nearly four cents to $2.35 per gallon, East Coast prices increased three cents to $2.59 per gallon, and Rocky Mountain prices increased one cent to $2.48 per gallon.
The U.S. average diesel fuel price rose nearly 5 cents to $3.07 per gallon on January 29, 2018, 51 cents higher than a year ago. Midwest prices increased by six cents to $3.03 per gallon, Gulf Coast prices increased over five cents to $2.87 per gallon, West Coast prices rose nearly four cents to $3.43 per gallon, East Coast prices increased over three cents to $3.11 per gallon, and Rocky Mountain prices rose one cent to $2.97 per gallon.
Heating oil prices increase, propane prices decrease
As of January 29, 2018, residential heating oil prices averaged $3.22 per gallon, 1 cent per gallon higher than last week and 59 cents per gallon higher than last year's price at this time. The average wholesale heating oil price for this week averaged $2.27 per gallon, almost 7 cents per gallon higher than last week and 58 cents per gallon higher than a year ago.
Residential propane prices averaged nearly $2.60 per gallon, 1 cent per gallon less than last week but 20 cents per gallon higher than a year ago. Wholesale propane prices averaged $1.17 per gallon, 11 cents per gallon less than last week but almost 23 cents per gallon higher than last year's price.
Propane inventories decline
U.S. propane stocks decreased by 0.9 million barrels last week to 53.1 million barrels as of January 26, 2018, 7.9 million barrels (12.9%) lower than the five-year average inventory level for this same time of year. Midwest, Gulf Coast, and Rocky Mountain/West Coast inventories decreased by 0.8 million barrels, 0.2 million barrels, and 0.1 million barrels, respectively, while East Coast inventories increased by 0.2 million barrels. Propylene non-fuel-use inventories represented 5.5% of total propane inventories.
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The global oilfield scale inhibitor market was valued at USD 509.4 Million in 2014 and is expected to witness a CAGR of 5.40% between 2015 and 2020. Factors driving the market of oilfield scale inhibitor include increasing demand from the oil and gas industry, wide availability of scale inhibitors, rising demand for biodegradable and environment-compatible scale inhibitors, and so on.
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The oilfield scale inhibitor market is experiencing strong growth and is mainly driven by regions, such as RoW, North America, Asia-Pacific, and Europe. Considerable amount of investments are made by different market players to serve the end-user applications of scale inhibitors. The global market is segmented into major geographic regions, such as North America, Europe, Asia-Pacific, and Rest of the World (RoW). The market has also been segmented on the basis of type. On the basis of type of scale inhibitors, the market is sub-divided into phosphonates, carboxylate/acrylate, sulfonates, and others.
Carboxylate/acrylic are the most common type of oilfield scale inhibitor
Among the various types of scale inhibitors, the carboxylate/acrylate type holds the largest share in the oilfield scale inhibitor market. This large share is attributed to the increasing usage of this type of scale inhibitors compared to the other types. Carboxylate/acrylate meets the legislation requirement, abiding environmental norms due to the absence of phosphorus. Carboxylate/acrylate scale inhibitors are used in artificial cooling water systems, heat exchangers, and boilers.
RoW, which includes the Middle-East, Africa, and South America, is the most dominant region in the global oilfield scale inhibitor market
The RoW oilfield scale inhibitor market accounted for the largest share of the global oilfield scale inhibitor market, in terms of value, in 2014. This dominance is expected to continue till 2020 due to increased oil and gas activities in this region. The Middle-East, Africa, and South America have abundant proven oil and gas reserves, which will enable the rapid growth of the oilfield scale inhibitor market in these regions. Among the regions in RoW, Africa’s oilfield scale inhibitor market has the highest prospect for growth. Africa has a huge amount of proven oil reserves and is one of the leading oil producing region in the World. But political unrest coupled with lack of proper infrastructures may negatively affect oil and gas activities in this region.
Major players in this market are The Dow Chemical Company (U.S.), BASF SE (Germany), AkzoNobel Oilfield (The Netherlands), Kemira OYJ (Finland), Solvay S.A. (Belgium), Halliburton Company (U.S.), Schlumberger Limited (U.S.), Baker Hughes Incorporated (U.S.), Clariant AG (Switzerland), E. I. du Pont de Nemours and Company (U.S.), Evonik Industries AG (Germany), GE Power & Water Process Technologies (U.S.), Ashland Inc. (U.S.), and Innospec Inc. (U.S.).
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Headline crude prices for the week beginning 9 December 2019 – Brent: US$64/b; WTI: US$59/b
Headlines of the week
In the U.S. Energy Information Administration’s (EIA) International Energy Outlook 2019 (IEO2019), India has the fastest-growing rate of energy consumption globally through 2050. By 2050, EIA projects in the IEO2019 Reference case that India will consume more energy than the United States by the mid-2040s, and its consumption will remain second only to China through 2050. EIA explored three alternative outcomes for India’s energy consumption in an Issue in Focus article released today and a corresponding webinar held at 9:00 a.m. Eastern Standard Time.
Long-term energy consumption projections in India are uncertain because of its rapid rate of change magnified by the size of its economy. The Issue in Focus article explores two aspects of uncertainty regarding India’s future energy consumption: economic composition by sector and industrial sector energy intensity. When these assumptions vary, it significantly increases estimates of future energy consumption.
In the IEO2019 Reference case, EIA projects the economy of India to surpass the economies of the European countries that are part of the Organization for Economic Cooperation and Development (OECD) and the United States by the late 2030s to become the second-largest economy in the world, behind only China. In EIA’s analysis, gross domestic product values for countries and regions are expressed in purchasing power parity terms.
The IEO2019 Reference case shows India’s gross domestic product (GDP) growing from $9 trillion in 2018 to $49 trillion in 2050, an average growth rate of more than 5% per year, which is higher than the global average annual growth rate of 3% in the IEO2019 Reference case.
Source: U.S. Energy Information Administration, International Energy Outlook 2019
India’s economic growth will continue to drive India’s growing energy consumption. In the IEO2019 Reference case, India’s total energy consumption increases from 35 quadrillion British thermal units (Btu) in 2018 to 120 quadrillion Btu in 2050, growing from a 6% share of the world total to 13%. However, annually, the level of GDP in India has a lower energy consumption than some other countries and regions.
Source: U.S. Energy Information Administration, International Energy Outlook 2019
In the Issue in Focus, three alternative cases explore different assumptions that affect India’s projected energy consumption:
EIA’s analysis shows that the country's industrial activity has a greater effect on India’s energy consumption than technological improvements. In the IEO2019 Composition and Combination cases, where the assumption is that economic growth is more concentrated in manufacturing, energy use in India grows at a greater rate because those industries have higher energy intensities.
In the IEO2019 Combination case, India’s industrial energy consumption grows to 38 quadrillion Btu more in 2050 than in the Reference case. This difference is equal to a more than 4% increase in 2050 global energy use.