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Power & Energy Commodity News

Rio ends chapter with Mozambique coal sale

Source: Financial Times, 30th July 2014

Miner sells coal mines for $50m after paying billions for them three years earlier, closing a chapter on one of its most disastrous acquisitions

Read the full article on FT.com

China oil demand rises 2.7% vs year ago

London, 29 July 2014

China's apparent oil demand* in June turned directions from May and climbed  2.7% versus the same month a year ago to 41.94 million metric tons (mt) or an average 10.25 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data.  On a month-over-month basis, apparent oil demand was up 8.6% from May.


“Analysts attributed the June increase to stronger fuel demand by the farming and agricultural sectors for the summer planting season,” said Song Yen Ling, Platts senior writer for China. “It’s also interesting to note that June marked the second month that China’s apparent oil demand crossed the 10 million b/d this year, following February’s 10.62 million b/d.”

The robust month-over-month demand growth helped push the nation’s apparent oil demand for the first half of the year to 9.91 million b/d with the second-quarter growth pace up 1.9% versus the same quarter a year ago. Contributing to the demand growth was China’s stronger 7.5% gross domestic product (GDP). In the first quarter, China’s apparent oil demand contracted by 0.6% amid GDP growth of 7.4%.

First-half 2014 growth in apparent oil demand was a 0.6% increase from the first half 2013 and marked the slowest pace for the period since Platts started compiling data in 2005.

China's refinery throughput averaged 10.22 million b/d last month, up 5.8% on a year-over-year basis, according to the July 16 data from China’s National Bureau of Statistics.  On the back of the increased refinery output, net oil product imports plunged 91.5% in June from a year earlier to 110,000 mt, data from China’s General Administration of Customs showed July 10. This was the lowest level since August 2013.

“Gasoline and jet/kerosene apparent demand grew significantly in the first half, continuing a well-publicized trend the past two years as oil demand growth from the transport sector continues to outpace that of the industrial segment.” said Song.

Gasoline retained its status as the backbone of China’s oil demand growth, showing a leap of 15.6% last month versus June 2013 to 2.5 million b/d.  This put first-half 2014 apparent demand for the fuel up 10.5% versus the same period a year ago.

Elsewhere, gasoil apparent demand in June was up 4.4% from a year earlier to 3.58 million b/d, the highest rate since September 2012. Continued growth is expected in the wake of government stimulus measures targeting infrastructure projects. But on a first-half 2014 basis, gasoil demand actually contracted 0.4% from the same period a year ago, to 3.44 million b/d.  

“Gasoil will remain a key product to watch as, despite the waning growth, demand for it still remains the largest among all the major oil products,” Song noted.

Fuel oil was the only product to show a contraction in apparent demand in June, slumping 16.8% year over year to 618,100 b/d. First-half demand slipped 16% from a year ago to 636,800 b/d.

Consumption of imported fuel oil – widely used as a raw material for the manufacturing of refined petroleum products by small, independent refiners known as “teapot” refineries – has slowed in the last two years as refiners gained greater access to domestic crude oil. Also, since late 2013 teapot refiners have increasingly used imported bitumen and tar blend, known domestically as asphalt, as feedstock in their toppers, further cutting into demand for imported fuel oil.

MONTHLY TRADE DATA IN MILLION METRIC TONS:

Jun ‘14

Jun ‘13

% Chg

May ‘14

Apr ‘14

Mar ‘14

Feb ‘14

Net crude imports (million mt)

23.28

22.17

+5.0

26.08

27.88

23.52

22.88

Crude production (million mt)

17.50

   17.48

+0.1

17.76

16.98

17.64

16.11

Apparent demand (million mt)

41.94

40.83

+2.7

39.92

39.92

41.55

40.56

Apparent demand (‘000 b/d)

10,247

9,976

+2.7

9,439

9,754

9,825

10,618

Sources: China’s General Administration of Customs, National Bureau of Statistics, Platts

Month-to-month demand in China is generally viewed to be subject to short-term anomalies which are of interest and important to note, but which often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.

Ends --


*Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. Platts also takes into account undeclared revisions in NBS historical data.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts. Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the widely-accepted benchmark for markets East of Suez.


For more information on crude oil, visit the Platts website at www.platts.com. For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn

BP flags Rosneft sanctions concern

Source: Financial Times, 29th July 2014

Oil and gas group alert to threat to relationship and investment with Russian partner from international sanctions over clashes in Ukraine

Read the full article on FT.com

Miners’ access to water a risk, says study

Source: Financial Times, 27th July 2014

A shortage of affordable water and energy has emerged as one of the 10 biggest threats to the industry, says to a report by consultancy EY

Read the full article on FT.com

Repsol eyes Canada as earnings double

Source: Financial Times, 24th July 2014

Spanish energy group beats forecasts with help of one-off gains, rise in refining margins and a stronger contribution from Gas Natural

Read the full article on FT.com

Ukraine gas deadlock poses threat to EU

Source: Financial Times, 24th July 2014

As a stand-off with Russia over price worsens after the downing of flight MH17 and regional violence flares, Europe’s gas supply is threatened

Read the full article on FT.com

Russia-Ukraine deadlock over gas supply

Source: Financial Times, 24th July 2014

As political tensions between the two countries persist and violence flares, EU gas supply is threatened as a stalemate over pricing continues

Read the full article on FT.com

Oil majors file Colombia exploration bids

Source: Financial Times, 24th July 2014

Colombia’s government invited offers for a total 95 exploration blocks, receiving bids for 26 blocks, as it seek to develop unconventional deposits

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US crude prices gain on stocks reduction

Source: Financial Times, 24th July 2014

The advance followed figures from the Energy Information Administration, which showed inventories at Cushing, Oklahoma, fell by 1.45m barrels to a near six-year low of 18.8m barrels in the week ending July 18

Read the full article on FT.com

Japan groups look for Australia coal exit

Source: Financial Times, 23rd July 2014

Itochu and Sumitomo are trying to sell stakes in an Australian coal project, amid a sector shake out caused by low commodity prices and high costs

Read the full article on FT.com