Strategic Stockpiling to Support China’s Crude Imports

Oil Voice:

China’s strategic petroleum reserve (SPR) depot in Jinzhou officially started filling in August 2018, bringing the existing depot capacity to a total of 249.1 million barrels, according to ESAI Energy’s new released China Watch report. The launch of this site suggests that Beijing is slowly progressing towards the end of its Phase II SPR, and that filling the government depot alone could add 70,000 b/d to Chinese crude demand between now and the end of 2018 and another 150,000 b/d in 2019.

Strategic Stockpiling to Support China’s Crude Imports

Hellenic Shipping News:
China’s strategic petroleum reserve (SPR) depot in Jinzhou officially started filling in August 2018, bringing the existing depot capacity to a total of 249.1 million barrels, according to ESAI Energy’s new released China Watch report. The launch of this site suggests that Beijing is slowly progressing towards the end of its Phase II SPR, and that filling the government depot alone could add 70,000 b/d to Chinese crude demand between now and the end of 2018 and another 150,000 b/d in 2019.

Iran’s Loss, Russia’s Gain

Hellenic Shipping News:

Russia will export more crude beginning in September, with most incremental exports targeting Europe, according to ESAI Energy’s CIS Watch Crude Outlook. Russia’s higher exports will come just as European refiners cut imports of Iranian crude, turning Iran’s loss into Russia’s gain.

Russia, Australia to boost global LPG supply

Kallanish Energy:

Russia and Australia are expected to add over 100,000 barrels per day of new liquefied petroleum gas (LPG) supply in coming months, providing markets with an alternative supply source, Kallanish Energy learns.

Consulting firm ESAI Energy said Thursday in its latest Global NGL Outlook the non-U.S. projects will boost global LPG supply while restraints in U.S. exports infrastructure limit shipments this winter.

Iran’s Crude Buyers Explore their Options

Hellenic Shipping News:

An excess of global refining capacity looms after 2021, according to ESAI Energy’s newly released, Global Refining Capacity Five Year Outlook. ESAI Energy projects a significant increase in new distillation capacity to 2023. After lagging demand growth in recent years, the coming capacity build cycle will significantly outpace demand. The resulting rise in spare capacity will reduce global utilization rates and put pressure on margins, particularly beyond 2021.

Capacity Glut to Trigger Refinery Closures after 2021

Hellenic Shipping News:

An excess of global refining capacity looms after 2021, according to ESAI Energy’s newly released, Global Refining Capacity Five Year Outlook. ESAI Energy projects a significant increase in new distillation capacity to 2023. After lagging demand growth in recent years, the coming capacity build cycle will significantly outpace demand. The resulting rise in spare capacity will reduce global utilization rates and put pressure on margins, particularly beyond 2021.

Non-US Projects to Boost Global LPG Supply

Oil & Gas Journal:

Australia and Russia together will add more than 100,000 b/d of LPG supply in the coming months, according to ESAI Energy’s Global NGL Outlook. Given that US export infrastructure will limit US LPG exports this winter when global demand is strongest, higher exports from Australia and Russia will provide an important alternative source of supply to China, Asia, and Europe.

Europe’s Role in Transport Markets Shrinking

Hellenic Shipping News:

Over the next year, Europe will import less gasoil while exporting smaller volumes of gasoline, according to ESAI Energy’s latest Global Fuels Outlook. In this publication, ESAI Energy analyst Ian Page points out that “this reduction in European diesel imports and gasoline exports will have a major impact on global trade flows in 2019.”

Permian Production Decelerates, Waiting for Pipelines

Hellenic Shipping News:

The Permian Basin’s rapid production growth is showing signs of deceleration, according to ESAI Energy’s recent North America Watch. An evaluation of shale producers finds that while Permian basin operating costs in the second quarter have fallen about 6 percent on average from this time last year, overall full-cycle breakeven costs are roughly 30 percent higher, due to increased capital spending. ESAI Energy analyst, Elisabeth Murphy, explains, “Acreage consolidation is key for achieving scale, and will be critical to some producers’ bottom lines, but it comes at a cost. Permian acreage can be expensive”.

Frac Spread: With Great LPG Supply Comes Great Exportability

Oil and Gas Investor:

The U.S. and Canada will produce about 3 million barrels per day (MMbbl/d) of LPG this year, a 200,000 bbl/d increase over 2017, with ESAI Energy LLC expecting considerable growth in 2019.

All told, output should rise by about 400,000 bbl/d from 2017 to 2019, said Andrew Reed, principal of ESAI Energy, during an Aug. 15 webinar. Of that 3 million bbl/d of production, exports of 1.1 million bbl/d are split between the Atlantic Basin and Asian markets.