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Wednesday, February 26, 2020

Crude Oil News

© Piyawat Hirunwattanasuk / Adobe Stock

China to Grant Tariff Exemptions on 696 US Goods

China will grant exemptions on retaliatory duties imposed against 696 U.S. goods, the most substantial tariff relief to be offered so far, as Beijing seeks to fulfill commitments made in its interim trade deal with the United States.Tuesday's announcement comes after the Phase 1 trade deal between the two countries took effect on Feb. 14 and is the third round of tariff exemptions China has offered on U.S. goods.China has committed to boosting its purchases of goods and services from the United States by $200 billion over two years as part of the agreement…

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Coronavirus Leaves China-bound Tankers Stranded

The coronavirus's effect on energy markets is worsening, as the sharp fall in demand in China, the world's largest importer of crude, is stranding oil cargoes off the country's coast and prompting shippers to seek out other Asian destinations.More than 1,360 people have died from the coronavirus in China, which has disrupted the world's second largest economy and shaken energy markets, with international benchmark Brent crude oil down 15% since the beginning of the year.Major international energy forecasters expect demand to fall in this quarter…

Image: Port of Rotterdam Authority

Port of Rotterdam Throughput Flat in 2019

The largest seaport in Europe Port of Rotterdam saw a freight throughput of 469.4 million tonnes in 2019, fractionally higher than in 2018 (469 million tonnes).According to a release, investments by the Port of Rotterdam Authority were again at a high level, with gross investments including participation amounting to €338.3 million (2018: €408.1 million). The net result excluding taxes amounted to €241 million (2018: €254.1 million).Significant underlying shifts were observable between the various commodities.

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US Trade Deficit Narrows for First Time in Six Years

The U.S. trade deficit fell for the first time in six years in 2019 as the White House’s trade war with China curbed the import bill, keeping the economy on a moderate growth path despite a slowdown in consumer spending and weak business investment.The report from the Commerce Department on Wednesday also showed the Trump administration’s “America First” agenda decreased the flow of goods last year, with exports posting their first decline since 2016. President Donald Trump, who has dubbed himself “the tariff man…

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Coronavirus Paralyzes Oil, Gas Sales into China

Short-term sales of crude oil and liquefied natural gas into China almost ground to a halt this week as the coronavirus slows economic activity and cuts demand and buyers ponder legal action to avoid having to honor purchase agreements, trade sources said.Typically, trade would have revived after the Lunar New Year holiday at the end of January, but China has extended the break into February to try to contain the fast-spreading coronavirus, which has claimed nearly 500 lives.As a result…

Image by International Seaways, Inc.

International Seaways Signs Refi Deal

New York-headquartered product tanker company International Seaways has closed on senior secured credit facilities worth a total of USD 390 million.The crude oil and petroleum product tanker company said that the facilities consists of a 5-year USD 300 million senior secured term loan facility, a 5-year USD 40 million revolving credit facility, of which USD 20 million has been drawn, and a 2.5-year USD 50 million senior secured term loan credit facility.The NYSE-listed ship owner…

Image: MOL

MOL in Restructuring Excercise

Japanese shipping major Mitsui O.S.K. Lines (MOL) has unveiled a number of new restructuring measures effective April 1, 2020.According to a press release, the  marine transportation provider intends to establish three new divisions and integrate its two tanker divisions to achieve synergy.MOL will establish the Offshore Gas Project Division as an organization focused on businesses related to the LNG field in energy value chains (FSRU projects, LNG bunker vessel project, etc.) to accelerate the enhancement of the offshore business…

Image: Teekay Tankers

Teekay Tankers Closes $533M Credit Facility

Bermuda-based operator of mid-sized tankers Teekay Tankers has closed a new five-year, $533 million revolving credit facility to refinance 31 vessels.The size of the new debt facility was reduced since announcing the term sheet signing in November 2019 as a result of excluding five vessels from the new facility, including the three vessel sales noted above and a potential for further opportunistic vessel sales.The proceeds from the new debt facility will be used to repay approximately $455 million of the company’s existing debt.

Ports in Singapore have started screening inbound travelers on passenger and commercial vessels for coronavirus symptoms (© hit1912 / Adobe Stock)

Coronavirus Places Shipping on High Alert

The Wuhan coronavirus outbreak has placed the shipping industry on high alert amid a rising death toll in China and reports that the fast-spreading illness is reaching new shores.The flu-like coronavirus, first identified in Wuhan, Hubei Province, China on December 31, has killed more than two dozen people in China and is believed to have infected more than 900 worldwide, according to several media reports. Cases have been confirmed in Beijing, Shanghai and Guangdong, and internationally in travelers returning from China to Japan…

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Mideast Tensions Create Insurance Headache for Tanker Owners

Even as the United States and Iran appear to signal a keenness to avoid further conflict, oil and gas shipowners are bracing to pay a price for the war of words that culminated in rocket strikes in Iraq over the last week - higher insurance bills.According to industry sources, payments known as war risk premiums for tankers shuttling through the Strait of Hormuz could rise significantly, adding hundreds of thousands of dollars to shipping costs in some cases that will ultimately…

Image: Overseas Shipholding Group

OSG Acquires Alaska Tanker

Overseas Shipholding Group, the tanker company providing energy transportation services for crude oil and petroleum products in the U.S. Flag markets, has entered into agreements with BP Oil Shipping Company USA and BP AMI Leasing to purchase the crude oil carrier vessels operated by Alaska Tanker Company (ATC).OSG currently owns a 37.5% interest in ATC. As part of the above transaction, OSG will acquire the remaining 62.5% interest of ATC that it does not own.According to the publicly traded tanker company…

File Image: A Japanese naval asset. CREDIT: AdobeStock / © JP Aaron

Japan Sending Warship, Aircraft to Middle East

Japan will send a warship and patrol planes to protect Japanese ships in the Middle East as the situation in the region, from which it sources nearly 90% of its crude oil imports, remains volatile, Japan's top government spokesman said on Friday.Under the plan approved by Prime Minister Shinzo Abe's cabinet, a helicopter-equipped destroyer and two P-3C patrol planes will be dispatched for information-gathering aimed at ensuring safe passage for Japanese vessels through the region.If there are any emergencies…

AdobeStock / © Jose Gill

U.S.-Europe Tanker Rates at Record Highs

Rates for Aframax-class crude oil tankers leaving the U.S. Gulf Coast hit a record this week, according to three shipbrokers, reflecting strong demand in Europe and the Mediterranean for low-sulfur crude.Equinor ASA and Unipec, the trading arm of China's top refiner Sinopec, provisionally chartered Aframax tankers Everest Spirit and Nordorchid, respectively, this week at rates of 245 worldscale points, according to one broker and Refinitiv Eikon data. Both vessels are headed to Europe.The worldscale rate translates to about $60…

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US Renews Waiver on COSCO's Dalian Tanker Unit

The Trump administration on Thursday renewed a waiver for companies to wind down transactions with the Dalian unit of a Chinese tanker company on which it had imposed sanctions in September for allegedly transporting Iranian oil.The waiver, good until Feb. 4, 2020, allows activities and transactions "ordinarily incident and necessary to the maintenance or wind down of transactions" including offloading of non-Iranian crude oil involving COSCO's Dalian Shipping Tanker Co, the U.S.

Source: BIMCO, Clarksons, IMF

BIMCO: Supply & Demand Trending Off-Balance

One of the most worrying trends that has developed recently - which will affect shipping demand in the years to come - is the falling trade-to-GDP ratio. The falling ratio can be explained by slowing globaliztation as well as increasing protectionist measures being implemented around the world, spear headed by the US. The raised barriers to trade are here to stay as we enter a new decade, with the shipping industry stuck with the consequences.The trade war is the clearest example of these extra barriers to trade…

AdobeStock / © rawf8

Commodities 2020? Reading the Trump, China Tea Leaves

As 2020 approaches, the year ends with the tantalising prospect of a trade deal between the United States and China. Again.Initial agreement to de-escalate the tariff war between the world's two biggest economies has been interpreted as a positive for the global economic outlook. But it's worth remembering that 2018 ended on a similar note - leaving the commodities outlook once again hostage to the whims of Donald Trump and Xi Jinping.In November last year, the U.S. President and his Chinese counterpart also reached a trade agreement of sorts at the G20 summit in Argentina.

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U.S., China Reach Trade Deal 'in principle'

The White House has reached a "deal in principle" with Beijing to resolve the 17-month U.S.-China trade war, according to a source briefed on the trade talks.The White House was expected to make an announcement later on Thursday, the source said."The written agreement is still being formulated, but they have reached an agreement in principle," the source said. No details were immediately available.In an attempt to secure a "phase one" trade deal, U.S. negotiators offered to cut…

Photo: CME Group

CME Adds Two Delivery Points to WTI Houston

CME Group on Thursday said it would add two more delivery points for its WTI Houston crude futures contract, pending regulatory review, as it seeks to provide customers with additional options to hedge physical price risk.* Beginning with the March 2020 contract, customers can take delivery of U.S.

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Asian Refiners Strive to Finish IMO Preparations

At SK Energy's largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule as the firm looks to boost sales of low-emission fuels before new marine fuel standards take effect in just one month.In Japan, the country's second-biggest refiner Idemitsu Kosan Co is taking a more cautious stance, increasing capacity for low sulphur fuel oil (LSFO), but also relying on blending to produce IMO 2020 compliant bunker fuel.The different approaches…

Joseph J. Angelo (Photo: IMO)

Angelo Receives IMO Maritime Prize for 2018

The prestigious International Maritime Prize for 2018 has been presented to Mr. Joseph J. Angelo. Angelo,  a former United States Coast Guard (USCG) and International Association of Independent Tanker Owners (INTERTANKO) senior executive who participated in International Maritime Organization (IMO) meetings for many years, providing leadership on a number of key regulatory developments.IMO Secretary-General Kitack Lim presented the prize on 25th of  November at the annual IMO Awards ceremony. Mr.

Pic: TEN

TEN Orders LNG Carrier at HHI

Greece-based crude, product and LNG tanker operator Tsakos Energy Navigation (TEN) ordered has one-option-one 174,000cbm LNG carrier from Hyundai Heavy Industries (HHI) in South Korea with expected delivery, the first, in the second half of 2021 and the second, in the first half of 2022.The provider of international seaborne crude oil and petroleum product transportation services said that with this order, if the option is exercised, its LNG proforma fleet increases to four vessels…

Source: BIMCO, WTO

BIMCO: Tanker Shipping and Macroeconomics Outlook

World growth and trade volumes under pressure, but still positive. A continued slowdown in global growth, as well as a lower trade multiplier will reduce overall demand for shipping for the rest of this year and through 2020.Expectations for global trade growth have also been lowered for 2020; this is now forecast at 2.7%, down from 3%. The WTO cautions that risks to these forecasts are weighted to the downside, with these risks including a potential deepening of trade tensions…

Pic: PAO Sovcomflot

Sovcomflot Profits Up on Stronger Tanker Market

Russia's state-owned tanker carrier Sovcomflot (SCF Group) reported improvements on both the top and bottom line in the third quarter benefiting from a stronger tanker market.The energy shipping company posted a net profit of  $26m as revenue increased in the third quarter.Sergey Frank, Chairman of the Board of Directors of PAO Sovcomflot, said: “We are satisfied with the Group’s performance over the third quarter. Sovcomflot steadily follows through on its strategy of increasing the share of large-scale industrial shipping projects in its portfolio."He added: "During the reporting period…

Pic: TORM

Product Tanker Freight Rates Rebounds

Product tanker freight rates softened in the third quarter of 2019 but rebounded strongly at the start of the fourth quarter following an increase in crude tanker rates that began after the attacks on Saudi Arabian oil facilities and accelerated dramatically to multi-year high levels at the end of September when the US imposed sanctions on two subsidiaries of China's COSCO Shipping.Denmark-based TORM said that growth in global demand for oil products generally remained subdued…

Pic: Indian Oil Corporation Ltd

Asian LPG Market to Cross $109Bln by 2024

The Asian liquefied petroleum gas (LPG) market stood at over $81.4 billion in 2018 and is projected to grow at a CAGR of over 5% to cross $109 billion by 2024, as increasing demand for LPG  as a fuel for power generation in remote and off-grid locations in comparison to its less environment-friendly alternatives like coal, diesel and fuel oil.Increasing demand for LPG used to run vehicles (Autogas)  is being witnessed as it is a comparatively cheaper automotive fuel and can be used in vast applications related to transportation…

Photo: BIMCO

IMO2020: Market Uncertainty Brings More Fuel Oil Price Volatility

The oil market has recently been shaken up by geopolitical events, but volatility in the price difference between low and high sulphur fuel cannot be explained by that alone – the uncertainty is the chaos factor.The uncertainty of the upcoming IMO 2020 Sulphur cap regulation (IMO2020) is having a big impact on the bunker market. Whereas, the price for Marine Gas Oil Low Sulphur (MGO LS) has largely remained stable, the price for High Sulphur Fuel oil (HSFO) has been become increasingly more volatile in recent months.