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Last Updated: February 2, 2019
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Market Watch

Headline crude prices for the week beginning 28 January 2019 – Brent: US$61/b; WTI: US$53/b

  • Oil prices continue to tread water in a tight range, with the market weighing the effectiveness of OPEC’s new supply deal with the looming spectre of growing American shale output
  • In an effort to shore up prices and prove its commitment, Saudi Arabia said it would reduce its oil output again in February and pump oil ‘well below’ its production limit for six months; January output was 10.2 mmb/d while February output is likely to be 10.1 mmb/d
  • The pledge comes as Saudi Arabia and Russia called off talks at the World Economic Forum in Davos, spurring rumours of a growing rift between the two oil giants
  • On the Iranian front, the EU is looking at ways of circumventing American sanctions on Iranian crude while Japanese refiners loaded their first Iranian crude cargo since October, following the footsteps of China, India, Turkey and South Korea
  • In another front opening on the American trade warpath, new US sanctions on Venezuelan crude look set to hurt American Gulf refiners – who depend on heavy crude from PDVSA – to the benefit of China and India
  • After a sharp drop the previous week, the active American drill count bounced back, gaining 10 oil rigs while losing one gas rig for a net gain of 9 sites to 1,059.
  • Crude price outlook: Crude oil will continue to hover in their present levels – Brent at US$60-62/b and WTI at US$52-54/b – with little on the horizon that could shake the benchmarks out of their current entrenched ranges

Headlines of the week


  • Eni has started up production at a new well in the Vandumbu field offshore Angola, with the VAN-102 well achieving initial performance of 13,000 b/d; coupled with the recent start-up of the Mpungi field, Eni’s Block 15/06 should reach a new production level of some 170,000 boe/d
  • Even as Saudi Aramco plans to embark on an IPO and the Kingdom open up to foreign investment, Saudi Arabia will keep exclusive rights to develop its vast oil reserves with Aramco, with no plans to chip away as its monopoly
  • Total is looking to take FID on its Ikike and deepwater Preowei oil projects in Nigeria in the first half of 2019, bringing onstream assets with projected output of 60,000 b/d and 70,000 b/d respectively
  • Turkey’s Genel Energy has acquired stakes in the Sarta and Qara Dagh blocks in the Kurdistan region of Iraq, with Chevron retaining operating stakes
  • Ineos remains committed to developing a solution for the challenging high-pressure, high-temperature Hejre oil and gas field in the Danish North Sea
  • BHP has struck oil at the deepwater Trion field in the Gulf of Mexico, after becoming the first non-Pemex deepwater driller in the country last year
  • Chevron has sold its 51.74% stake in Brazil’s Frade field in the offshore Ceara basin to independent PetroRio for an undisclosed amount

Midstream & Downstream

  • The port of Fujairah in the UAE has joined other major ports like Shanghai and Singapore in banning open-loop scrubbers, forcing ships in the East of Suez to comply with IMO’s new 2020 regulations requiring ships to burn fuels with a sulfur content of less than 500ppm, down from 3500ppm
  • President Donald Trump’s administration is taking steps to limit the ability of American states to block interstate oil and gas pipeline, targeted at boosting limited pipeline capacity in the US Northeast
  • Tallgrass Energy Partners and Kinder Morgan have agreed to expand transport capacity from Wyoming and Colorado to Cushing, combining the Pony Express, Wyoming Interstate and Cheyenne Plains Gas pipelines to boost delivery to 800,000 b/d of light crude and 150,000 b/d of heavy crude
  • ExxonMobil has joined forces with Plains All American Pipeline and Lotus Midstream in a 1 mmb/d crude pipeline project meant to deliver Permian shale crude to Houston by 2021
  • Citgo has idled its small gasoline producing unit at the 157,500 bd Corpus Christi refinery, in a sign of a growing global gasoline glut

Natural Gas/LNG

  • Saudi Aramco has announced its intention to spend ‘billions of dollars’ to acquire natural gas assets in the US in its ambitions to diversify away from crude to become a global natural gas/LNG player
  • Lithuania’s Klaipeda LNG terminal will double its LNG capacity by 2021 when pipelines to Poland and Finland are completed, delivering Norwegian gas to the Baltic countries in an effort to reduce Russia’s dominance over gas supplies
  • CNOOC and Total have announced a new natural gas discovery in the Glengorm prospect in the UK Central North Sea; at 250 million boe of recoverable resources, it is the largest UK gas find in more than a decade
  • Shell’s Kitimat LNG project in Canada’s British Columbia is gaining steam, with contracts and subcontracts worth almost US$1 billion already handed out
  • Anadarko and PTTEP will take FID on the Mozambique Area 1 natural gas project in the Rovuma basin in 1H2019, targeting eventual LNG production

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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.

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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
Importance of Construction Supply Online Shop

An online shop is a type of e-commerce website where the products are typically marketed over the internet. The online sale of goods and services is a type of electronic commerce, or "e-commerce". The construction supply online shop makes it all the more convenient for customers to get what they need when they want it. The construction supply industry is on the rise, but finding the right supplier can be difficult. This is where an online store comes in handy.

Nowadays, everyone is shopping online - from groceries to clothes. And it's no different for construction supplies. With an online store, you can find all your supplies in one place and have them delivered to your doorstep. Construction supply online shops are a great way to find all the construction supplies you need. They also offer a wide variety of products from different suppliers, making it easier for customers to find what they're looking for. A construction supply online shop is essential for any construction company. They are the primary point of contact for the customers and they provide them with all the goods they need.

Most construction supply companies have an online shop where customers can purchase everything they need for their project, but some still prefer to use brick-and-mortar stores instead, so it’s important to sell both in your store.

Construction supply is an essential part of any construction site too. Construction supply shops are usually limited to the geographic area where they are located. This is because, in order for construction supplies to be delivered on time, they must be close to the construction site that ordered them. But with modern technology and internet connectivity, it has become possible for people to purchase their construction supplies online and have them shipped right to their doorstep. Online stores such as Supply House offer a wide variety of products that can help you find what you need without having to drive around town looking for it.

May, 07 2022