tuesday - bloomberg l.p. · pdf filetuesday nov. 1, 2016 nov. 1, 2016 oil heading to $40 if...
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Tuesday
Nov. 1, 2016
Nov. 1, 2016
Oil Heading to $40 If OPEC Fails, Says GoldmanBy Ben Sharples, Bloomberg NewsAn OPEC deal to cut oil output at a meeting this month is looking increasingly unlikely, with failure warranting prices in the low-$40s, according to .Goldman Sachs
“The lack of progress on implementing production quotas and the growing discord between OPEC producers suggests a declining probability of reaching a deal on November 30,” Goldman analysts including wrote in a note dated Damien CourvalinOct. 31. Obstacles to a supply agreement remain formidable, , a Greg Sharenow Pimcoportfolio manager, said in an e-mailed note today.
OPEC is due to meet in Vienna to implement the first supply cuts in eight years and get other producers from outside of the group to join, notably Russia. Brent crude extended losses below $50 a barrel on Oct. 31 after weekend talks failed to yield concrete details on an accord to reduce the global crude surplus and stabilize prices.
“The lack of an agreement so far has pushed oil prices sharply lower, with weakening oil fundamentals warranting oil prices in the low $40s a barrel in our view if OPEC is unable to deliver a convincing agreement,” the Goldman analysts wrote.
Even if the fear of slumping oil prices prompts the group to hammer out an accord, the probability of the deal successfully reducing inventories is low, the bank said. Rising October OPEC production and a faster ramp up of new non-OPEC projects have reduced the odds that an agreement translates into a decent draw in inventories during the first half of 2017, it said, estimating average OPEC output at about 34.2 million barrels a day last month.
While the probability of a cut being announced and the odds of it successfully reducing stockpiles have declined over the past week in Goldman’s view, OPEC’s most senior official said the organization and other major oil producers are “on course” to deliver a deal that will temper the global oversupply. Full on web.story
Company Watch
Today: Africa Oil WeekToday: KAPSARC Energy Dialogue, RiyadhToday: Iran Europe Oil, Gas & Energy Summit, Berlin
All times eastern
Events
"There’s a natural top in terms of the oil because priceof the potential for supply to come back onto the market place."
– Jeremy Stretch, head of foreign-exchange
strategy at Canadian Imperial Bank of
Commerce in London
Quote of the Day
17% — Increase in Shell's third-quarter profit49% — Decrease in BP's third-quarter earnings
Numbers of the Day
Today's Oil News
U.S. Gasoline Futures Hit 15 Month-High
December gasoline futures rose 15 percent on Oct. 31 to $1.635 a gallon, the biggest intraday gain for an active contract since 2008, following an explosion and fire in Alabama that shut the largest fuel pipeline in the U.S. It is currently trading at $1.57, the highest level since July 2015. The southeastern U.S. is “highly dependent on pipeline supplies from Colonial and, ultimately, Colonial flows form the baseline of U.S. East Coast supply,” , head of oil Robert Campbellproducts research at in New York, said in a note. The longer the mainlines are Energy Aspects offline, “the more upward pressure will be placed on U.S. East Coast fuel prices, while downward pressure will be exerted on U.S. Gulf Coast product prices.”
— Christopher Sell, Bloomberg Briefs Editor, & Laura Blewitt, Bloomberg News
Note: Oil and gas integrateds producing more than 1 million barrels a day of crude, according to Bloomberg Intelligence. Company data as of 12:10p.m. London time. U.S. company data as of previous day's close.
Oil Buyer's Guide 2 Nov. 1, 2016
Today's Oil News
SupplyOil traded near the lowest close in
more than a month as estimates of increased U.S. stockpiles added to concerns that OPEC will struggle to decisively tackle a global crude surplus. Futures were little changed in New York after slumping 3.8 percent Oct. 31, the most since Sept. 23. Crude inventories rose by 1.5 million barrels last week, according to a Bloomberg survey before an EIA report Nov. 2.
The biggest fuel pipeline in the U.S. shut its mainlines Oct. 31 after an explosion and fire in Alabama that killed at least one person. Gasoline futures surged and U.S. refiner stocks gained. Colonial Pipeline Co., which carries refined products to New York Harbor from Houston, shut the lines for the second time in two months. A contract crew working miles from the site of a Sept. 9 spill ran into the pipeline with a trackhoe, igniting gasoline and causing a fire, Colonial said in a statement. Full
on Terminal.story
Africa Oil Corp. wants crude prices to stay lower for a bit longer, giving the explorer time to exploit depressed development and services costs for its project in Kenya’s Lokichar basin. “We’re in a perverse situation where I’d like to see the oil price stay down for two years," CEO Keith Hill said on Oct. 31 in an interview in Cape Town, South Africa. That would save the company 20 percent
to 40 percent of total project costs, he said. Full on Terminal. story
Nigeria’s Seplat Petroleum Development has found an alternative route for oil exports disrupted by rebel attacks as the explorer expands natural-gas production for its home market. Seplat, listed in London and Lagos in 2014, was affected this year by increased attacks by rebels in the Niger Delta and last month reported a decline in crude revenue due to a shut-in of the Forcados terminal. With oil production declining by a third in the first nine months of the year, the company has developed an alternative route for shipping crude via Warri refinery jetty. Full on Terminal.story
North Sea Brent crude loadings are said to be set at four cargoes in December, compared with five in November, according to one person with knowledge of the loading program. Full
on Terminal.story
Royal Dutch Shell reported third-quarter profit that beat analyst estimates after its acquisition of BG Group boosted oil production, helping to counter a slump in prices. The shares rose. Profit adjusted for one-time items and inventory changes advanced 17 percent from a year earlier to $2.79 billion, The Hague-based Shell said today. That exceeded the $1.79 billion average estimate of 14 analysts surveyed by Bloomberg, and the earnings of Exxon Mobil. Full on storyTerminal.
BP reported a 49 percent decline in third-quarter earnings after crude prices fell, refining margins shrank and its exploration and production division posted a loss. Shares fell. Profit adjusted for one-time items and inventory changes dropped to $933 million from $1.8 billion a year earlier, the London-based company said today in a statement. That beat the $719.2 million average estimate of 14 analysts surveyed by Bloomberg. The company’s exploration and production division lost $224 million compared with a profit of $823 million a year earlier. Full on Terminal.story
Companies
Obstacles to an OPEC output cut agreement remain formidable, Pimco portfolio manager Greg Sharenow said in an e-mailed note. The group also faces challenges in imposing a potential accord and monitoring producer disclipline, he said. Full on Terminal.story
The U.S. shale rebound is to push out Nigerian crude indefinitely, according to BMI Research. A drop in U.S. shale since mid-2015 opened up a gap in the US market for light sweet crudes, with Nigeria raising flows to the country to average 200,000 barrels a day so far this year, BMI said in an e-mailed report. Full on Terminal. story
Annual average U.S. crude production would fall by 185,000 barrels a day year on year in 2017 assuming U.S. oil rig count stays at the current level of 441, Goldman Sachs analysts Damien Courvalin and Huan Wei said in a report dated Oct. 31. Full on Terminal.story
The oil price is vulnerable in the short-term and OPEC is likely to find common ground, UBS said in an e-mailed report. "We regard some kind of agreement, such as a group quota with no country quotas or a production-cap understanding that is not strictly implemented, as likely," UBS analysts including Giovanni Staunovo wrote in an e-mailed report. Full on Terminal.story
Idemitsu is to carry out major maintenance that involves the shutdown of crude distillation units at its Chiba and Aichi refineries in the year ending March 2018, Kazunori Ishimatsu, assistant to general manager of the company's corporate planning department, told reporters in Tokyo today. Full on Terminal.story
Pemex said the Salamanca refinery is running normally after an incident. Full on Terminal.story
Market Calls
Refinery Outages
Early Insight
Oil Buyer's Guide 3 Nov. 1, 2016
Waterborne U.S. Imports in Week Ended Oct. 27, AHOY<GO>
kb/dCrude
OilFinished Motor
GasolineMogas Blending
Comp.Total Motor
GasolineEthanol
Jet Fuel
Distillate Fuel Oil
Residual Fuel Oil
Unfinished Oils
Total Crude and Products*
PADD I 811.4 165.2 402.3 567.5 0.9 93.4 82.1 91.0 0.2 1645.5
PADD III 3046.5 0.0 1.5 1.5 0.0 0.1 25.2 368.1 102.3 3543.7
PADD V 675.5 0.0 49.8 49.8 0.0 91.3 4.3 172.4 35.3 1028.5
Sum 4533.3 165.2 453.6 618.8 0.9 184.8 111.6 631.5 137.8 6217.8Source: Bloomberg LP
Change from Prior Week AHOY<GO>
kb/dCrude
OilFinished Motor
GasolineMogas Blending
Comp.Total Motor
GasolineEthanol
Jet Fuel
Distillate Fuel Oil
Residual Fuel Oil
Unfinished Oils
Total Crude and Products*
PADD I -319.0 30.0 -181.5 -151.4 0.3 79.1 20.0 -107.6 -74.0 -553.0
PADD III
-330.7 -8.4 -18.0 -26.3 0.0 0.1 -26.0 175.5 -62.9 -270.4
PADD V 18.1 -16.3 49.8 33.5 0.0 -23.3 -2.9 165.5 -49.4 141.6
Sum -631.6 5.4 -149.6 -144.3 0.3 55.9 -8.9 233.4 -186.3 -681.8Source: Bloomberg LP *Total does not include ethanol. Tables compiled by Michael Carone, Bloomberg LP
Early Insight
U.S. Waterborne Crude Imports Down 631,600 Barrels a Day: Customs DataBy Christopher Sell, Bloomberg Briefs EditorPreliminary U.S. waterborne crude imports fell by 631,600 barrels a day to 4.53 million barrels a day in the week ended Oct. 27, according to customs data compiled by Bloomberg. The West Coast saw a slight increase of 18,100 barrels a day to 675,500 barrels a day, while the East Coast and Gulf Coast saw imports fall 319,000 barrels a day and 330,700 barrels a day, respectively. Total crude and product imports fell by 681,800 barrels a day to 6.2 million barrels.
Cushing Stockpiles Fell 250,000 Barrels Last Week: Bloomberg EstimateBy Christopher Sell, Bloomberg Briefs EditorCrude stockpiles at the Cushing, Oklahoma, storage hub are projected to have decreased by 250,000 barrels in the week ended Oct. 28, according to a Bloomberg estimate.
This would bring crude stocks at the hub to 58.11 million barrels
Currently, stockpiles are 58.36 million barrels, according to data. EIA
Click here to learn more on the methodology.
Tanker Tracker
Net Flows Monitored by Genscape
Oil Buyer's Guide 4 Nov. 1, 2016
Tanker Tracker
Oil and Product Shipments From U.S. Gulf at Three Week-HighBy Christopher Sell, Bloomberg Briefs Editor Crude and refined product shipments from the U.S. Gulf rose to 3.98 million metric tonnes on 96 ships in the week ended Oct. 27. That's up 8.8 percent from the previous week's 3.64 million metric tonnes on 91 ships, and the highest level in three weeks, according to data compiled by Bloomberg. Shipments to Mexico increased slightly to 703,858 metric tonnes from 506,543 metric tonnes the IHS previous week, while shipments to Central America more than doubled to 687,428 metric tonnes from 307,652 metric tonnes.
Tanker Traffic Rose to 3.98 Million Metric Tonnes, Vessel Tracking Data Show
Benchmarks
Oil Buyer's Guide 5 Nov. 1, 2016
Benchmarks
For live spot prices, click or run on Bloomberg. For crack here BOIL<GO>
spreads click or run here CRKS<GO>
Futures Based Swaps
PERIOD WTI BRNT WTI/BRNT NYULSD NYULSD/WTI
Bal Mo 47.02 48.87 -1.86 155.96 18.5
16-Nov 47.69 49.59 -1.9 156.55 18.07
16-Dec 48.31 50.16 -1.85 157.38 17.79
17-Jan 48.82 50.68 -1.86 157.76 17.43
Bal Qt 47.35 49.23 -1.88 156.26 18.28
Q1 17 48.83 50.66 -1.83 157.54 17.34
Q2 17 50.05 51.83 -1.79 158.15 16.37
Q3 17 50.75 52.59 -1.84 160.88 16.81
Bal Yr 47.35 49.23 -1.88 156.26 18.28
Cal 17 50.23 52.08 -1.85 160.09 17
Cal 18 52.27 54.59 -2.32 167.15 17.92
PERIOD NYULSD/BR NYRB NYRB/WTI NYRBBR RBHO
Bal Mo 16.64 157.83 19.27 17.41 1.83
16-Nov 16.17 149.8 15.22 13.32 -6.78
16-Dec 15.93 148.01 13.85 11.99 -9.39
17-Jan 15.56 149.51 13.96 12.09 -8.28
Bal Qt 16.4 153.82 17.24 15.36 -2.48
Q1 17 15.49 154.89 16.22 14.37 -2.67
Q2 17 14.58 167.83 20.43 18.64 9.67
Q3 17 14.97 159.04 16.04 14.2 -1.84
Bal Yr 16.4 153.82 17.24 15.36 -2.48
Cal 17 15.15 156.85 15.65 13.8 -3.21
Cal 18 15.59 157.98 14.15 11.82 -8.98Source: Bloomberg
For live swap prices, click or run on Bloomberghere CFVL<GO>
Spot prices as of end of previous day. Futures as of 7:30 a.m.
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