European Gasoline Exports Begin to Fall

In the first quarter of 2018, European net exports of finished gasoline and blending components averaged nearly 1.4 million b/d. As Europe’s exportable surplus shrinks, import requirements especially East of Suez narrow, and competition to place gasoline in the Atlantic Basin intensifies due to growing U.S. and Russian surpluses, European exports will fall by more than 100,000 b/d over the next year.

Reforming Capacity to Grow in China

Hydrocarbon Engineering:
China’s reforming capacity will grow by 400 000 bpd in 2018, displacing more than 100 000 bpd of the country’s mixed aromatics imports, according to ESAI Energy’s newly published ‘China Gasoline Production and Blending to 2020 Watch.’ After 2019, additional investment will fully wean China’s gasoline producers from these imports.

LPG Demand Grows in Waves

Hellenic Shipping News Worldwide:
“LPG will be a fast-moving market for the next couple of years,” comments Andrew Reed, ESAI Energy’s Head of NGLs. “The LPG market is prone to imbalances, so one might expect the expansion of supply to lead to a glut that would hamper prices and U.S. exports. But China will soak up more and more LPG in 2019, keeping exporters happy.”

Market Alert: Year-Round E15

The latest talks over the RFS resulted in the announcement that the Trump administration will allow E15 gasoline to be sold year-round. Although policy details remain unclear, this development will move the RIN market into surplus, reduce D6 RIN prices, increase blending of ethanol into the gasoline pool at the expense of petroleum based components, and temper the recent crude-led rise in gasoline prices.

New York Drivers May Get More Russian Gas in Their Tanks

Bloomberg:
East Coast drivers could be putting Russian gasoline into their fuel tanks without even knowing it. Already strong imports of blending components like naphtha will be paired with gasoline after Soviet refining tax breaks and investments give Russia surplus fuel to sell. Exports into Europe and the U.S. Atlantic basins will rise by 75,000 barrels a day, Energy Security Analysis, Inc. principal Andrew Reed says.

Hedges Limit Shale’s Gains From Oil Price Upside

Energy Intelligence:
After pressure from the investment community, many US independent Shale producers aggressively hedged 2018 production in 2017 in order to ensure or slightly improve their capital position.  Those hedges are now limited the upside of US Shale Producers.  Please read ESAI Energy’s Elisabeth Murphy’s interview with Energy Intelligence’s Deon Daugherty.

Iran’s crude exports to fall by 300,000 BPD in 2018

Kallanish Energy:
There remains a lot of uncertainty regarding what comes next after the U.S. Treasury reinstates economic sanctions on Iran and the possibility of exemptions or some sort of “special treatment” to allies in Europe.

But for now, U.S. research and consulting firm ESAI Energy forecasts the sanctions will reduce Iranian crude oil exports by roughly 300,000 barrels per day (BPD) by late this year.