US gasoline consumption (implied) averaged 9.7 million b/d over last 4 wks, seasonal record, and up +173,000 on 2015 -- sets new record
US distillate consumption averaged 3.8 million b/d over last 4 weeks, very close to 2015 and 10yr avg levels
US distillate stocks adjusted for consumption continue to fall rather than rise as oversupply worked down
US distillate stocks fell -1.8 million bbl to 151 million bbl last week, just +14.7 million bbl (+10.8%) above 2015
US refinery throughput rose +190,000 b/d to a new seasonal record of 16.695 million b/d (up +164,000 b/d on 2015). It would be interesting to know how much of this is related to a) the French refinery strikes; and, b) the Venezuela debacle.
US gasoline stocks adjusted for consumption edged up to 24.6 days, versus 22.7 days in 2015 and 10yr avg 22.9 days.
US gasoline stocks rose +1.4 million bbl to 239 million bbl, and now +22 million bbl (+10%) over 2015 level -- by the way, a new graph is needed -- the current numbers are practically off the historical graph.
US crude oil imports returned to more normal 7.6 million b/d last week from the elevated 8.4 million b/d in prior week.
US commercial crude oil stocks fell -4.1 million bbl to 527 million bbl last week, but a new graphis still needed. Current data is almost off the historical graph
US commercial crude stocks fell more heavily than usual with YoY surplus down from +68 million to +61 million bbl
Wednesday, June 29, 2016
Update On Chinese Crude Oil Imports -- RIgzone -- June 29, 2016
The writer argues that jump in Chinese crude oil imports may be due to rapid filling of their strategic petroleum reserve and increasing refinery operations for export, rather than an overall increase in demand due to domestic growth in GDP.
Some data points from the article:
Some data points from the article:
- China: world's #2 consumer of crude oil
- imports rose 16.5% in the first five months of this year compared to same period last year
- three reasons cited
- domestic crude oil production falling; dropped over 7% in May
- produced about 4 million bopd in the January - May period; a drop of about 170,000 bopd from 2015
- therefore: 170,000 bopd of the additional 1 million bopd import increase due to decrease in local production
- filling strategic storages at a fairly rapid pace (locking in great prices while they can)
- estimate: about 1 million bopd went into either commercial or strategic storage
- third factor: rising exports of refined products
- diesel exports surged over 300%
- gasoline exports surged almost 65%
Some Business News, Less Than A Week After Brexit -- June 29, 2016
Updates
June 30, 2016: now we know why Walmart went with a month of free-shipping. Walmart is doing this in anticipation of Amazon setting July 12, 2016, as Prime Day -- a one-day sale exclusively for members of its Prime subscription shopping service.
Original Post
- US pending home sales fell almost 4% in May; a sign of slowing in the US housing market
- Walmart will give everyone a full month of free shipping; a free 30-day trial
- because of Brexit, the world's second largest telecom, Vodafone, may move its headquarter out of the UK
- T, at new highs, it appears, trading about $42.45
- SRE, flirting with new highs, it appears, trading about $111.00
- MDU, down a bit, but still doing well at $23.27
- TSLA, investors coming back in, trading up 2.4%; now back over $206
On June 17, six days before the Brits voted to leave the European Union, the S&P 500 index closed at 2,071. Today, the S&P index continued to surge, closing at ... drum roll ... 2,070.77, which when rounded takes us to 2,071. The Dow, up almost 300 points, to close at almost 17,700. On the Dow, there were 299 new 52-week highs, including my favorite, (LOL), ATT; there were 11 new 52-week lows.
Update On Oilfield Expansion Projects In Saudi Arabia -- June 29, 2016
Aramco, SABIC sign pact on new plant -- Bloomberg video. Previously posted. This is part of Prince Salman's "Vision 2030" plan. Previously posted. Not only is there nothing new, so far this is simply "talk." The video: lots of talk; little information.
Khurais Oil Field
Adjacent To The World's Largest Oilfield, The Ghawar Trend
Khurais Megaproject
This project was initially proposed to be completed by 2017, then pushed back to 2018, and it appears this project is now pushed back to be completed no sooner than late 2019.
Wiki.
From the June 27 - July 3, 2016 issue of Oil & Gas News:
Saudi Aramco is expected to make a decision in June whether to go ahead with the $3- billion Khurais oilfield expansion project in the Eastern Province under the present market conditions.From March 30, 2016, Bloomberg:
The company is currently locked in negotiations with Saipem, the engineering, procurement and construction (EPC) contractor for the $2-billion central processing facilities (CPF) package, with a view to lowering project costs, decelerating construction works and better cash flow management.
However, Aramco has also said that if substantial cost savings are not possible after the engineering phase is completed, it could cancel the whole project. The engineering work is now being undertaken by Saipem. The current slow-down in works has also extended the completion deadline to late 2019.
The Khurais Arabian Light Crude Increment project, as it is also known, is an onshore oilfield development which was initially discovered in 1957. By 2009, the central procession facility at Khurais had a processing capacity of 1.2 million barrels per day (bpd) of oil and 320 million cu ft per day (cfd) of associated gas, as well as 80,000 bpd of natural gas liquids.
Saudi Arabian Oil Co. is pressing ahead with an expansion of the Khurais oil field despite lower crude prices and plans to double its production of natural gas over the next 10 years.
The world’s biggest oil exporter, known as Saudi Aramco, won’t cancel any oil, gas or refining projects, Amin Nasser told reporters during a conference in Al-Ahsa in eastern Saudi Arabia. Aramco is also studying a possible expansion of the country’s largest oil refinery, Ras Tanura, which has a capacity of 550,000 barrels a day.
“Until now all of our downstream and upstream projects are continuous,” Nasser said. “No project in our programs got canceled.”From November 8, 2015, TradeArabia:
Saudi Arabia is moving ahead with the expansion of its giant Khurais oilfield but the project would move slower than originally planned because of budgetary reasons.
Since global oil prices fell sharply last year, national oil company Saudi Aramco has slowed some projects, shelving less important ones and asking for discounts on some contracts which it had awarded. The project plans to raise Khurais' output by 300,000 barrels per day (bpd) to 1.5 mbpd, and allow it to produce 143 million standard cubic feet per day of associated gas and 34,000 bpd of natural gas liquids.
The original time frame to complete the expansion was 2017.
Industry sources told Reuters in September that Khurais expansion was delayed.
Now Saudi-based industry sources say Khurais expansion is still on but will take longer than expected, with possible completion in 2018. "Khurais is going ahead but not as fast because of the budget," one industry source said.From September 3, 2015, ConstructionWeek:
The expansion of Saudi Arabia's Khurais oilfield is likely to be delayed from its originally planned timeframe of 2017.
Consequently, the start-up date of the project is now unclear.
Plummeting global oil prices are being attributed for the delay, despite the absence of official comment on the development.Undated, but probably mid-2009, from Hydrocarbons-Technology:
The Khurais oilfield development was the largest of several Saudi Aramco projects intended to boost the production capacity of Saudi Arabia's oilfields from 11.3 million bpd to 12.5 million bpd by 2009.
The Khurais project as a whole covers three oilfields: Khurais, Abu Jifan and Mazalij. The Khurais field, with an area of 2,890km² and 127km long, located about 250km south-west of Dhahran and 300km north south-east of Riyadh, is the biggest in the project. Abu Jifan covers 520km² south-west of Khurais and Mazalij covers 1,630km² south-east of Abu Jifan.
In 2009, the project added 1.2 million bpd of high-quality Arabian light crude to Saudi Arabia's export capacity. The Khurais programme also increased the capacity of the Qurayyah seawater injection system by 4.5 million bpd of treated water for injection at the Khurais and South Ghawar fields in 2008. The total project cost is estimated to be about $10bn.
The drilling was completed in February 2009, ten months ahead of the scheduled three-year duration. Production at the oilfield began on 10 June 2009.
Khurais is located on a large structural trend to the west of, and parallel to, the Ghawar trend.
Because of this superficial resemblance to Ghawar, there were high hopes that the Khurais reservoir would be comparably large; however, it turned out that it was much smaller and not as high quality as Ghawar, though it is still the largest of the proposed projects.
Variable reservoir quality had also been a problem at Khurais. Pilot-scale production at Khurais began in 1963, but the field was never fully developed. It produces Arab light crude.
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Shaybah Oil Field
A Super-Giant Oil Field In Saudi Arabia
From April 25, 2016, Bloomberg:
Saudi Arabian Oil Co. will complete the expansion of its Shaybah oilfield by the end of May, 2016, allowing the biggest crude exporter in the world to maintain its total production capacity, according to two people with knowledge of the plan.
Shaybah’s output capacity will rise to 1 million barrels a day from 750,000 barrels, said the people, who asked not to be identified because the information isn’t public.
The field, in the Empty Quarter desert near the border with the United Arab Emirates, produces extra light grade crude with an API gravity of 42 degrees, they said.From June 25, 2015, ArabNews:
Shaybah’s expansion will help Saudi Aramco, as the state producer is known, keep the company’s capacity at 12 million barrels a day, they said.
As part of Saudi Aramco’s mega projects, it is implementing expansion plans at Shaybah field in the Empty Quarter to increase oil production capacity and natural gas liquids (NGL) at an estimated cost of SR186.75 billion. Saudi Aramco's joint projects in the field of refining and petrochemical production are estimated at SR131.25 billion.
The Shaybah field expansion focuses on two major projects. First is oil production increase by 250,000 barrels per day (bpd), for the second time. The expansion will provide the Shaybah field with a capacity of 1 million bpd of Arabian Extra Light crude oil by April, 2016, double its initial capacity in 1998.
Moreover, the Saudi oil company is working to improve the design of wells to increase the average reservoir contact to 10 km, enhancing production from the deep, tight faces of the reservoir.
As for the second project, Saudi Aramco will construct a new NGL plant, to meet the growing demand for petrochemical feedstock through the extraction of high value NGL of the produced gas, which is expected to begin in the second quarter of 2015.
The NGL plant project also includes a major upgrade to increase the power generation capacity to more than 1 GW by installing four cogeneration units, seven single cycle units, and a 50 km transmission line with the ability of 230 kilovolt.
Starting The Day With 30 Active Rigs -- June 29, 2016; BLM Ready To Okay 6,000 More Wells In Utah -- Moab/Paradox Basin
Active rigs:
RBN Energy: evaluating economics of a new natural gas pipeline - part 4.
Strippers: from the EIA today --
From a SeekingAlpha contributor (archived):
From the June 27 - July 3, 2016 issue of Oil & Gas News:
At least one poll shows Trump and Hillary in a dead heat.
From The New York Times, an op-ed by Bernie Sanders: Dems need to wake up.
| 6/29/2016 | 06/29/2015 | 06/29/2014 | 06/29/2013 | 06/29/2012 | |
|---|---|---|---|---|---|
| Active Rigs | 30 | 77 | 191 | 189 | 215 |
RBN Energy: evaluating economics of a new natural gas pipeline - part 4.
Strippers: from the EIA today --
Stripper wells, or wells that produce small volumes, represent an important but decreasing share of total U.S. oil and natural gas production. These wells are characterized as producing no more than 15 barrels of oil equivalent per day (boe/d) over a 12-month period.
EIA estimates that there were about 380,000 stripper oil wells (so called because they are stripping the remaining oil out of the ground) in the United States operating at the end of 2015, compared to about 90,000 nonstripper oil wells. --- EIAMoab, Utah: BLM poised to okay almost 6,000 new wells for Newfield over 16 years; directional and vertical wells.
Under the BLM's preferred alternative, Newfield Exploration Co. would, over a period of 16 years, drill all 5,750 oil and gas wells it proposed. That plan relies on directional drilling to reduce the project's footprint in an already affected field covering 119,000 acres south of Myton.
The infill project is needed to recover remaining oil and gas with new wells and by injecting water into hydrocarbon-bearing formations to coax further production over the 40- to 50-year life of the project.
Utah's largest oil producer, Newfield already operates about 3,400 wells there, on 40-acre spacings. By drilling many new wells from existing pads, the infill project would concentrate its impacts to spots already served by existing roads and pipelines. These provisions are needed to protect habitat and the Pariette Wetlands.
Other data points:
- no sage grous in this particular are
- two rare species of cactus
- prairie dogs (which have been doing directional burrowing without BLM permission)
********************************
Iran's Rate Of Growth In Crude Oil Production Is Slowing
From a SeekingAlpha contributor (archived):
Summary:Iranian oil production has rebounded much faster than many analysts ever anticipated as the chart below shows. At this point, Iran is roughly back to pre-sanctions production levels. Score one against analysts who expected the process to take years.
- A major part of the fall in oil prices last year was driven by concerns over the rising production levels of Iran.
- Analysts reassured the markets that it would take a couple of years for Iran to get production back to pre-sanctions levels.
- Iranian oil production has rebounded much faster than many analysts ever anticipated as the chart below shows.
The result is that there's probably very little additional crude that's going to come online from Iran. The country already is pumping as fast as it can, and frankly its post-sanctions export program has been at best minimally successful. Again, this is a ding on conventional wisdom that suggests Iran's production would have a significant impact on the market share of other major oil producers.
This is probably a large part of what has driven Saudi commentary that the oil glut has disappeared.
Iran believes it can move from producing 3.5 million barrels per day (mb/d) in May to 4.8 mb/d by 2021, but to do that the country needs $70 billion in foreign capital to hit the target.
***************************************
Update On The Khurais Oilfield In Saudi Arabia
The Tea Leaves Continue To Swirl
Saudi Aramco is expected to make a decision in June whether to go ahead with the $3- billion Khurais oilfield expansion project in the Eastern Province under the present market conditions.
The company is currently locked in negotiations with Saipem, the engineering, procurement and construction (EPC) contractor for the $2-billion central processing facilities (CPF) package, with a view to lowering project costs, decelerating construction works and better cash flow management.
However, Aramco has also said that if substantial cost savings are not possible after the engineering phase is completed, it could cancel the whole project. The engineering work is now being undertaken by Saipem. The current slow-down in works has also extended the completion deadline to late 2019.
The Khurais Arabian Light Crude Increment project, as it is also known, is an onshore oilfield development which was initially discovered in 1957. By 2009, the central procession facility at Khurais had a processing capacity of 1.2 million barrels per day (bpd) of oil and 320 million cu ft per day (cfd) of associated gas, as well as 80,000 bpd of natural gas liquids.
*****************************
In Politics As In Sports, Timing Is Everything
Peaking Too Soon
At least one poll shows Trump and Hillary in a dead heat.
From The New York Times, an op-ed by Bernie Sanders: Dems need to wake up.
Surprise, surprise. Workers in Britain, many of whom have seen a decline in their standard of living while the very rich in their country have become much richer, have turned their backs on the European Union and a globalized economy that is failing them and their children.
And it’s not just the British who are suffering. That increasingly globalized economy, established and maintained by the world’s economic elite, is failing people everywhere. Incredibly, the wealthiest 62 people on this planet own as much wealth as the bottom half of the world’s population — around 3.6 billion people. The top 1 percent now owns more wealth than the whole of the bottom 99 percent. The very, very rich enjoy unimaginable luxury while billions of people endure abject poverty, unemployment, and inadequate health care, education, housing and drinking water.
Could this rejection of the current form of the global economy happen in the United States? You bet it could.
During my campaign for the Democratic presidential nomination, I’ve visited 46 states. What I saw and heard on too many occasions were painful realities that the political and media establishment fail even to recognize.
In the last 15 years, nearly 60,000 factories in this country have closed, and more than 4.8 million well-paid manufacturing jobs have disappeared. Much of this is related to disastrous trade agreements that encourage corporations to move to low-wage countries.
His "facts" may or may not be accurate. His plan for fixing the problems are dead wrong.
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