Chart of the Week
Indian Crude Imports Drop to 1-Year Low in July
Tuesday, August 24, 2021
Crude prices recovered somewhat from last week's freefall, boosted by improving signals coming out of East Asia (China reporting no locally transmitted infections) as well as the Ku-Maloob-Zaap platform seeing a major supply disruption in offshore Mexico. ICE Brent quotes swung back above the $70 per barrel mark, whilst WTI futures trended around $67.5 per barrel, further extending the widening Brent-WTI spread.
Hedge Funds Keep on Selling Crude. Hedge funds and money managers have sold petroleum for the seventh time in nine weeks, Reuters reports, as demand concerns have bitten into the summer season's bullish sentiment. The sales were equivalent to 40 MMbbls in the six most important futures in the week to 17 August.
Ku-Maloob-Zaap Fire Debilitates Mexico Offshore Output. A fire on a PEMEX-operated offshore oil platform connected to the Ku-Maloob-Zaap complex (40% of Mexico's crude output) killed at least 5 people, forcing the Mexican NOC to decrease output as the platform ran out of natural gas for reinjection.
Guyana to Pick Crude Marketer from 15 Companies. Fifteen companies have bid to become Guyana's crude oil marketer, with China's Sinochem (SH:600500) bidding the lowest price at $0.02 per barrel. The lowest bid might not guarantee the deal as Guyana was seeking for an experienced trading company with solid monthly crude marketing volumes.
ExxonMobil Negotiates PNG Deal Again. The government of Papua New Guinea relaunched talks with US major ExxonMobil (NYSE:XOM) on the P'nyang gas project following a 2-year hiatus. The negotiations were broken off after the two sides failed to agree if P'nyang should be channeled into a separate train of PNG LNG.
Baltic Freight Index Rises to Highest Since 2010. The Baltic Exchange's sea freight Baltic Index continues to soar, now standing at 4,147 points, with capesize rates increasing for 11 straight sessions already. Shipping constraints in China coupled with robust commodity demand remain the main drivers of the ongoing freight rate surge.
GM Recalls Every Chevy Bolt EV. General Motors (NYSE:GM) indefinitely halt the sales of all Chevy Bolt EVs and recalled all models produced in 2019-2022 due to fire risks from the car's high-voltage battery pack, dealing a $1 trillion blow to the US carmaker.
Panama Canal Maintenance to Sap Transit Capacity. The Panama Canal will go into scheduled maintenance between 29 August â€“ 10 September, pushing up freight prices in the Western Hemisphere and severely impacting the transiting capacity for non-booked ships which will be forced to wait 14-15 days to pass.
Chinese Merger to Create Third-Largest Steelmaker. The long-mooted merger of Chinese steelmakers Ansteel Group and Ben Gang has started last week, propelling the new firm to become the third globally after Baowu Group and ArcelorMittal (AMS:MT) amid a wide-ranging consolidation drive within China's bloated steel sector.
Gazprom Ups 2021 Price Forecast. Russian gas giant Gazprom (MCX:GAZP) has revised its 2021 average European sales price for the third time this year already, hiking it to $270 per Mcm, sending its stock to an all-time high.
Afghanistan Runs Risk of Product Dearth. Following the Taliban's takeover of Afghanistan, product exports to Afghanistan (which doesn't have a conventional refinery) stopped altogether. Before August most of the 20-25kbpd of products supplied to the country was railed in from the Turkmenbashi Refinery in Turkmenistan, currently only Iran supplies fuel across the border.
Chinese Coking Coal Futures Soar. Coke and coking coal futures on the Dalian Commodity Exchange surged this week amidst rumours of an impending two-week suspension in coal imports from Mongolia, with the latter trading at an all-time high of 3050 yuan per tonne ($470 per tonne).
BP Drills First Exploration Well in Azerbaijan's SWAP Block. Operating the Shallow Water Absheron Peninsula (SWAP) block offshore Azerbaijan, UK-based major BP (NYSE:BP) spudded the first wildcat in the acreage at the North Khali area in water depths of some 40 meters.
Gold Steady Above the $1,800/oz Mark. Following a surge late last week, gold prices remained above the $1,800 per ounce threshold, back to where they were a month ago, as investors continue to speculate whether the US Federal Reserve would delay tapering or not.