2024.11.04

Crude Tanker Rates Fall Amid Slower Demand Growth as Winter Approaches

Crude tanker rates have dropped recently, with the Baltic Dirty Tanker Index down for seven days to 966, signaling weak demand growth. Typically, the northern hemisphere’s winter boosts rates, but this year, demand out of Asia and the growth in tonne-days remain below annual averages. VLCC rates from the Middle East to China and Suezmax and Aframax rates have all decreased week over week, prompting some shipowners to shift vessels westward. Brokerage firm Fearnleys described VLCC rates as dropping “quicker than autumn leaves,” while Clarksons reported a 15% decline in VLCC earnings to $39,200 per day.

[SLOW] Daily Vlcc Market_VLCC TCE Comparison by Route _30days Range

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Saudi Arabia May Lower December Oil Prices for Asia Amid Weak Demand

Saudi Arabia is expected to reduce December oil prices for most crude grades sold to Asia, reflecting weak demand and declining Dubai benchmark prices. A Reuters survey suggests the official selling price (OSP) for Arab Light crude could drop by 30 to 50 cents per barrel, following last month's price spread. The cut could prompt OPEC+, led by Saudi Arabia and including Russia, to delay plans to increase production due to soft demand, particularly in China. Strong margins for high-sulfur fuel oil may result in smaller price cuts for heavier Saudi crude grades.

[SLOW] Oil Market _ Oil Time Spread

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Exxon and Chevron Surpass Q3 Profit Expectations with Record U.S. Oil Output

Exxon Mobil and Chevron exceeded Q3 profit forecasts due to record U.S. oil production, even as global fuel margins declined. Both companies expanded output through acquisitions, while European rivals invested in renewables. Exxon’s output rose 24% year-over-year, and Chevron’s by 7%, driven by strong gains in the Permian Basin. Despite lower refining margins, both companies’ profit declines were less severe than expected, supported by their focus on U.S. shale production.

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[SLOW] Oil Market _ Refinery Margin

Sinopec Secures 10% More Natural Gas for Winter to Meet Rising Demand

China’s Sinopec has boosted its natural gas supplies for the winter by nearly 10% over last year through increased domestic production and strategic LNG imports. By ramping up output at major fields like Puguang and Yuanba and securing spot LNG imports, Sinopec is preparing to meet North China's heating needs from mid-November to mid-March. Additionally, LNG inventory levels at key terminals, such as Qingdao and Tianjin, have been raised to over 80% capacity. China’s gas demand has grown this year, with apparent demand up nearly 10%, aided by domestic output and cost-effective LNG imports.

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Imperial Oil Surpasses Q3 Profit Expectations with Increased Output

Imperial Oil reported better-than-expected Q3 profits, driven by record production at its Kearl oil sands project and reduced operating costs. However, earnings were lower than last year due to lower global oil prices and refinery challenges. Imperial’s production averaged 447,000 barrels of oil equivalent per day, with refinery utilization dropping to 90% due to maintenance. CEO Brad Corson noted reduced costs of over $3 per barrel year-to-date. The company, a part of the Pathways Alliance, is advancing plans for a major carbon capture project but awaits government fiscal support.

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Lyondell to Close Houston Refinery Amid U.S. Wave of Refinery Shutdowns

LyondellBasell plans to close its 263,776 bpd Houston refinery in early 2025, marking another U.S. refinery closure amid shifts toward renewable energy and reduced demand for fossil fuels. The shutdown will begin in stages, starting with the crude distillation and coker units in January. Originally slated to close in 2023, the refinery’s life was extended due to strong fuel margins. Other refineries, such as Phillips 66’s Los Angeles facility and two Valero refineries in California, are also facing closure or review due to reduced crude supply, California regulations, and declining demand for traditional motor fuels.

[SLOW] www.slowspace.io_FLow

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Dynacom Orders Four Suezmax Tankers from Samsung, with Chinese Subcontractor Involved

Greek shipping company Dynacom has reportedly ordered four 158,000-dwt suezmax tankers from Samsung Heavy Industries (SHI) for a total of $334 million, marking SHI's first suezmax order of the year. Although SHI won the contract, the vessels will likely be built by a Chinese subcontractor, a first for SHI, which may explain the relatively low price of $83.5 million per tanker. Set for delivery by December 2027, these tankers will likely be powered by conventional marine fuel. This order contributes to SHI's 2023 total of 29 vessels, helping it reach 62% of its $9.7 billion annual target.