Is Market Ready for Mariner East 2?

OilVoice:
Any delay to the Mariner East 2 project would impact LPG markets from Applachia to Asia, according to ESAI Energy’s analysis of the Mariner East expansion’s impact on U.S. NGL exports. In contrast, ethane exports are emerging much more slowly, according to ESAI Energy’s newly released Global NGL Outlook.

OPEC Takes Small Step…or Maybe Not

Hellenic Shipping News:
OPEC has agreed to rollback overcompliance with the original production deal of November 2016. This appears to mean an increase among the voluntary over-complying countries of 450,000 b/d with the bulk coming from Saudi Arabia, Kuwait, and the UAE. However, the communique could also be interpreted as enabling an increase of as much as 1 million b/d, with some members replacing lost volumes from involuntary over-complying countries like Venezuela. At this point, the small step interpretation is more likely.

Rising medium, heavy refiner demand pushing OPEC deal to an end

Oil and Gas Journal:
The rise in medium and heavy refiner demand was already pushing the production-cut agreement among members of the Organization of Petroleum Exporting Countries as well as some non-members towards an end by 2019, ESAI Energy points out in its May Global Crude Oil Outlook. The US request for more crude oil and apparent willingness of Saudi Arabia and Russia to respond provides additional rationale.

Crude Oil Quality Threatens US Shale

OilVoice:
In its May Global Crude Oil Outlook ESAI Energy points out that the growth in medium and heavy refiner demand was already pushing the OPEC+ deal towards an end by 2019. The U.S. request for more crude oil and Saudi Arabia and Russia’s apparent willingness to respond provides additional rationale. How this “end” is finessed remains to be seen, but clearly the medium and heavy producers of OPEC (besides Venezuela and Iran) will increase production in 2019.

Russsia’s Refineries Invest to Cut Fuel Oil

ClipperData:
ESAI Energy’s Amrit Naresh is featured in the May 2018 Fuel Oil and Feedstock Trader publication discussing Russia’s Refineries Invest to Cut Fuel Oil, which was based on a presentation given at the Platts Middle Distillate Conference in Antwerp in February 2018.

In July 2011, Russian President Vladimir Putin called the heads of Russia’s leading oil companies to a meeting near St. Petersburg and gave them a choice: increase the secondary processing capacity at your refineries or go bust. Putin had long wanted to improve the value-adding capabilities of Russian industry and see Russia export fewer raw materials and more finished goods, less dirty and more clean fuel.

What is the perfect price for oil?

CNN Money:
When it’s too high, consumers start freaking out and using less. When it’s too low, oil companies cut back operations and lay off thousands of workers. Opinions on where the sweet spot currently lies differ widely, but analysts and strategists say it’s probably somewhere between $60 and $70 per barrel.

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.”

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.