Miriam Menegatti

The big traders which were less involved in trading of metals namely Vitol, Gunvor and Mercuria are now putting their resources to compete with the two well established Glencore and Trafigura. Traders are notoriously opportunistic in their approach. Now that can see the money they can make in metals. And some of them will go into the power business. It would be interesting to see how they will manage the ethical side of trading in terms of ESG. With more resources in the metals trading business, will the big 5 continue to dominate the oil and gas trading? May be it will be an opportunity for medium-size and small oil traders to find more space.

1

Happy Monday! Belatedly sharing our weekly LNG report ...by Emily Chow Asian spot #LNG prices saw a slight decline this week, but still held near a six-month top as hot weather in the region encouraged cooling demand, and as Northeast Asian buyers focus on supplies for the summer. The average LNG price for July delivery into north-east Asia was at $12.00/mmBtu, slightly down from $12.30/mmBtu in the previous week, which was its highest levels since mid-December. "(The) heatwave has strengthened downstream gas demand in India but this is also a price-sensitive market. Currently, Indian importers have no choice but to import spot LNG due to surging power demand amidst the hottest heatwaves," said Masanori Odaka, senior analyst at Rystad Energy. Delivery into India, however, is often at a discount to Europe or the rest of Asia, added Odaka, "so the impact on global prices are limited." India is experiencing a blisteringly hot summer, with a part of capital Delhi recording the country's highest ever temperature at 52.9 degrees Celsius (127.22°F) this week. Southeast Asian buyers like Thailand's state-energy firm PTT and Philippines power producer First Gen also issued tenders this week seeking supplies for delivery in July. LNG/TEND In northeast #Asia, South Korea and Japan are both forecast for hotter than normal weather through most of June and well into July, said Samuel Good, head of LNG pricing at commodity pricing agency Argus. "Several Japanese power utilities have already purchased cargoes for June-July delivery, so their current interest is pointing more towards August onward delivery," added Rystad's Odaka. In #Europe, S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in July on an ex-ship (DES) basis at $11.023/mmBtu on May 30, a $0.14/mmBtu discount to the July gas price at the Dutch TTF hub. Argus assessed the July delivery price at $11.00/mmBtu, while Spark Commodities assessed the June delivery price at $11.026/mmBtu. "In Europe, TTF gas markets have found some support on the back of increased Asian LNG demand," said Hans van Cleef, chief energy economist at PZ-Energy. "Although European gas inventories are well filled, and the filling season is still in progress, market participants seem to react nervously when there are signals regarding higher Asian demand, or supply disruptions as we have seen due to the unexpected Norwegian outages." In the United States, Argus' Good said that production has increased as the Cameron LNG terminal in Louisiana has raised its feedgas intake "to levels that would suggest all three trains are operating close to capacity." Sabine Pass inflows, however, remain lower than would usually be seen during winter months, he added. Meanwhile, LNG freight rates continued to increase this week, said Spark Commodities analyst Qasim Afghan. Atlantic rates jumped to $52,500/day on Friday, while Pacific rates rose to $45,250/day.

25

𝗔𝗿𝗴𝘂𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘄𝘀 | 𝗘𝘂𝗿𝗼𝗽𝗲𝗮𝗻 𝗴𝗮𝘀 𝘁𝗿𝗮𝗱𝗲𝗿𝘀 𝘀𝗵𝘂𝗻 𝗨𝗸𝗿𝗮𝗶𝗻𝗲 𝘀𝘁𝗼𝗿𝗮𝗴𝗲 𝗮𝗳𝘁𝗲𝗿 𝗥𝘂𝘀𝘀𝗶𝗮𝗻 𝗮𝘁𝘁𝗮𝗰𝗸𝘀 | Financial Times Natasha Fielding, head of European gas pricing at Argus quoted and data cited. --- European traders this summer are using only a fraction of Ukraine’s vast natural gas storage, following Russian attacks that drove up risks, depriving the war-torn country of scarce revenues. --- European companies sent just 15.4 mn cubic metres and 51.9 mn cubic metres in June and July, compared with 102.7mn cubic metres and 586.6 mcm in those months last year, according to data from Argus. Ukraine is keen for European traders to continue using its gas infrastructure, partly as it brings valuable revenue to its war torn economy. However, “unless some extra incentive is introduced to park gas in Ukraine, it is hard to see” how European traders will return, said Natasha Fielding, head of European gas pricing at Argus. Read in full: https://okt.to/zwNd6O #ArgusMedia #naturalgasindustry #gaspricing #gasstorage #EuropeanUnion

6

Our latest scoop on Egypt's gas issues, with Francesca Landini Mohamed Ezz Sarah El Safty - Saudi Arabia and Libya have financed the purchase of gas cargoes worth at least $200 million to help #Egypt ease its energy crisis this summer amid a steep decline in domestic gas output, two industry sources familiar with the matter said. Egypt needs some $2 billion worth of gas to cover summer demand through October, according to one of the two sources familiar with the government's plan, but a hard currency crisis means it lacks funds to fully cover imports of liquefied natural gas (#LNG). "This financial burden (of the gas bill) comes at a critical time for Egypt as it faces troubles reining in its subsidy bill, which could have an impact on social security and overall stability," said Mona Sukkarieh, political risk consultant and cofounder of Middle East Strategic Perspectives. "Egypt is facing significant challenges, worsened by rising power demand and declining gas output... daily power cuts had been disrupting businesses and risked fuelling public discontent," said Mehrun Etebari, Global LNG director at S&P Global Commodity Insights.

34

Happy Friday! In our Global LNG report this week...by Emily Chow Asian spot #LNG prices rose to a six-month top this week, on the back of cooling demand in India, higher forecast temperatures in northeast #Asia and suspended production at an Australian gas facility. The average LNG price for July delivery into north-east Asia was at $12.60/mmBtu, its highest levels since December 15. The August delivery price was estimated at $12.70/mmBtu. "The strength of demand in Asia has provided some support to prices and differentials ... The level of tendering activity has remained high due to a combination of fundamental drivers across countries, including strong economic activity, hot weather, challenging upstream production and restocking demand," said Lucas Schmitt, research director on short-term LNG at Wood Mackenzie. "We expect Asian summer LNG demand to increase year-on-year, but at a softer rate than in the last few months. Inventories for key northeast Asian markets seem broadly balanced." “India LNG imports were strong in May, but monsoon rains have brought some cooling and hesitancy amidst high spot prices may result in a possibility of lower spot activity in India”, said Rystad Energy analyst Lu Ming Lu Ming, Pang in a note. On the supply side, #Chevron had suspended production at its #Wheatstone gas facility in #Australia to repair the platform's fuel gas system. It has commenced repair work, which is expected to be completed in the coming weeks. The production suspension supported #Europe gas prices this week. S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in July on an ex-ship (DES) basis at $11.151/mmBtu on June 13, a $0.07/mmBtu discount to the July gas price at the Dutch TTF hub. Argus Media assessed the July delivery price at $11.10/mmBtu, while Spark Commodities assessed it at $11.122/mmBtu. But low European demand for gas has kept storage levels at record highs this year, with Wood Mackenzie forecasting gas storage will be full by end-September and remain full until end-October, with an additional 4 million metric tonnes per annum (tpa) of floating storage also accumulated. "Limitations on European injection demand this summer and weak downstream consumption continue to weigh on the region's LNG receipts," said Samuel Good, head of LNG pricing at commodity pricing agency Argus. "An open inter-basin arbitrage for Atlantic loadings is continuing to draw LNG away from Europe and to Asia instead, where demand has remained strong even as Asian spot delivered prices have risen well into the double digits." Meanwhile, LNG freight rates experienced sharp increases this week, said Spark Commodities analyst Qasim Afghan, with the Atlantic spot rate rising to $64,250/day on Friday, and the Pacific rate gaining to $48,000/day.

30

8 Comments

Happy Friday! In our Global LNG report this week Asian spot #LNG rose slightly this week tracking European #gas markets, while warm weather forecasts, strong storage inventories and weak economic data in China helped keep demand muted. The average LNG price for December delivery into northeast #Asia rose slightly to $13.60 per mmBtu from $13.40/mmBtu last week. The price for January delivery was estimated at $14/mmBtu. "Asian LNG front-month prices remained largely stable...due to a rise in European TTF prices. This stability reflects weak fundamentals, with robust supply and reduced demand driven by unseasonably warm weather," said Go Katayama, M.S. , LNG and natural gas analyst at Kpler. "Although colder temperatures are forecasted for Northeast Asia, these are expected to remain brief. Some spot demand may arise as winter progresses, but ample spot supply should keep prices balanced for the week ahead." In Japan and South Korea, temperatures will gradually drop towards normal levels in the coming week, however, heating demand across Asia remains lower than average for the time of year, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence. Economic numbers have been pressuring industrial demand, most notably the disappointing inflation numbers from China accompanied by lower producer prices, he said. Asian prices were supported by European gas prices which rose to a near one-year high amid ongoing concerns over Russian supply and as cold weather sapped gas stocks. Austrian energy group OMV said an award of more than $243 million in connection with irregular German gas supplies from Gazprom could impact its Gazprom supply deal. Extremely low wind output, particularly in Germany, coincided with temperature declines, resulting in high gas consumption for power and heating purposes, leading to significant net withdrawals from underground gas facilities across the continent, Kpler's Go Katayama, M.S. said. European gas storage sites were last 92.1% full, down from 95.2% seen at the start of the month. S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in December on an ex-ship (DES) basis at $14.058/mmBtu on Nov. 14, a $0.25/mmBtu discount to the December gas price at the Dutch TTF hub, the highest prices seen in nearly a year. Argus Natural Gas / LNG assessed the price at $14.060/mmBtu, while Spark Commodities assessed it at $14.107/mmBtu. On the back of this rally, the U.S. arbitrage, diverting a physical cargo from one market to another, to north-east Asia for December fell by $0.65 and is currently pricing in at $0.88/mmBtu, signalling that prompt month U.S. cargos are incentivised to voyage to Northwest Europe for an eighth week straight, said Spark Commodities analyst Qasim Afghan. In LNG freight, Atlantic rates have risen to $26,000/day on Friday, while Pacific rates continued to decline for the 14th straight week to $26,000/day, he added.

45

5 Comments

Shell is selling its Singapore refinery and petrochemicals plant to a joint venture involving trading house Glencore, ending the UK major's long refining presence in Asia. The 237,000 barrel per day Bukom refinery and Jurong petchem plant in the Southeast Asian city-state are being bought by Indonesian petchem firm Chandra Asri and Glencore through their CAPGC joint venture. Shell’s decision to sell up came as the facility found itself unable to compete with more complex refineries and large, export-oriented plants across Asia and the Middle East. With the divestment, Shell will achieve its target of halving its Singapore operational emissions by 2030 against a 2016 baseline. However, the issue of whether Shell should sell assets to comply with a Dutch court ruling ordering it to slash emissions was keenly contested during Shell's appeal last month. The sale means Shell, which had 15 refineries worldwide at the start of the decade, will be left with only four so-called Energy and Chemicals Parks in Rhineland (Germany), Rotterdam (Netherlands), Norco (US) and Scotford (Canada). Its crude processing capacity has dropped by more than a one-quarter over that time, from 2.2 million b/d to 1.6 million b/d in 2023, and will go down further as Shell closes the sales of Bukom and its stake in the PCK Schwedt plant in Germany. The Bukom sale may have been a long time coming, but Shell surprised earlier this week by confirming it had decided to divest its 72% shareholding in Shell Downstream South Africa (SDSA). The unit has around 600 filling stations in South Africa and a stake in a refinery in Durban, meaning Shell is exiting refining in Africa as well as Asia, although that plant hasn't been operating for the past two years. Full article here 👉 https://shorturl.at/mDHP3 Energy Intelligence Tom Daly #MergersAndAcquisitions #Singapore #Downstream #Refinery #Petrochemicals

14

1 Comment

Narrow contango, tighter forecasted #LNG market this winter to accelerate #natgas storage depletion this quarter ... ? Last October, ICIS LNG analysts counted up to 16 floating vessels off the coast of Europe. By 31 December 2023, European underground storage facilities were still 85% full, down from 94% on 1 October – similar to current levels. In November 2022, there were 35 floating cargoes, and the gas winter began with 87% in UGS. By end of the year, continental stocks were still at 82%. In 2024, the market feels there could be a lot fewer, if any vessels waiting in the same way. The #ICISTTF December ’24 premium to October ’24 has been too weak, in September at least, to keep cargoes waiting before delivery. They tend to build up from October so it remains to be seen of course where the contan-goes. It has averaged €2.41/MWh ($0.79/mmBtu) throughout 1-25 September while the same spread was €13.53/MWh ($4.42/mmBtu) in the same timeframe last year. ICIS global LNG balance modelling (below) suggests demand could outpace supply in coming months, potentially leaving few spot cargoes available to effectuate an arbitrage. https://lnkd.in/eGne9zhu

35

7 Comments

https://lnkd.in/e9UayAin Interesting to see the Chevron and ExxonMobil poking around in #shale #naturalgas in Algeria. The geology is definitely favorable but will need to see on the above-ground conditions and the economics. In the early days of shale all the majors were staking out international positions. Outside of Argentina and China those dreams generally faded due to a range of factors including above ground risk, service capacity and access to markets - all of which ultimately added costs. But modern shale wells look very different than they did even 5 years ago, with longer laterals, more accurate landing of horizontals, fracking of multiple wells at once and large-scale water recycling. And some see a brighter future for gas in Europe as it looks to back out more Russian volumes (even if it is taking more LNG). It will be interesting to see if the US majors can make Algeria work.

2

Vitol Group paid a record dividend of $6.5 billion last year, the latest evidence of how the energy crisis has delivered spectacular riches to the world’s commodity traders. The payout represents an average of some $14 million for each of the roughly 450 employees who own the company — with some senior traders likely to have received multiples of that. It means that the world’s largest independent oil trader has distributed more than $25 billion to its partners over the past 15 years, according to the company’s audited accounts seen by Bloomberg News. The latest windfall highlights how the period of commodity market volatility sparked by Russia’s invasion of Ukraine became a once-in-a-lifetime bonanza for the traders and executives who own the largest trading houses. The accounts showed blockbuster profits of $13.2 billion last year at the level of Vitol’s main Dutch holding company Vitol Holding BV — down from the $15.1 billion of 2022, but still more than three times the company’s previous annual record. Vitol Holding BV pays dividends, which in turn are used for share buybacks from Vitol partners by its parent company. The four leading privately-owned energy traders — Vitol, Trafigura Group, Mercuria Energy Group Ltd. and Gunvor Group — have made combined net profits of more than $50 billion in the past two years, according to Bloomberg News calculations. By comparison, in 2018-2019 their combined earnings were just $6.8 billion. Vitol is owned by between 450 and 500 of its 1,700 employees, a senior executive told a New York court earlier this year, while Trafigura has about 1,400 trader shareholders. Vitol Chief Executive Officer Russell Hardy said in an April interview that no individual owns more than 5% of the company — in contrast to smaller rivals Mercuria and Gunvor where ownership is concentrated in the hands of one or two top executives. Archie Hunter #vitol #oil #commoditytrading https://lnkd.in/e8CPv8vy

696

19 Comments

🚢Weekly LNG Bunker market report : Prices Ease Amidst Geopolitical Shifts 🌍 Rotterdam: Last week, Rotterdam’s LNG bunker price decreased, aligning with a decline in the TTF Natural Gas benchmark and abundant gas storage levels across Europe. 🔍 Insights: Market analysts attributes the TTF price decline to subdued gas demand, stemming from reduced heating usage and a mild winter in parts of Europe. This benefits consumers, but concerns about future price volatility persist. 💡 Singapore: Singapore’s LNG bunker price also fell, influenced by the JKM price and market trends in Asia. Even though LNG remains an attractive option for bunkering, softer demand last week due to geopolitical easing and ample inventories led to the price decline. 🛢️ Long-Term Trends: Energy experts caution that LNG price volatility may challenge sustained demand growth, particularly in price-sensitive regions like South Asia. However, the long-term pricing trajectory for LNG contracts indicates a downward trend, driven by market oversupply and over-investment cycles. For more related articles: ENGINE   ⚓ #LNG #energymarket #Shipping #LNGPrices #oilandgas #bunkering #alternativefuels #shipping #jkm #ttf #LNGbunkering #oott #rotterdam #singapore #japan #lng

9

1 Comment

It was an enriching session with Argus Media's vice-president, crude, China, TOM REED at today's 𝗔𝗿𝗴𝘂𝘀 𝗔𝘀𝗶𝗮-𝗣𝗮𝗰𝗶𝗳𝗶𝗰 𝗢𝗶𝗹 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 𝗙𝗼𝗿𝘂𝗺. He weighs in on the oil demand and crude trading strategies shaping the crude market in China. Here are some of pointers shared: • Oil demand, in aggregate, has yet to peak. But demand for road fuels may be in structural decline • Weaker margins will force Chinese crude importers to deploy more agile trading strategies • For China, Canadian crude is a new, low-cost, relatively short haul source of supply. For other producers of heavy sour crude, it presents a market-share challenge Access more insights to the crude market here: https://okt.to/TnJEwj #ArgusMedia #OilMarketsForum2024 #crudeoil

7

REDD Bond Pipeline: Yinson Boronia Production launches new secured bond Yinson Boronia Production, the operator of Anna Nery floating production storage and offloading (FPSO), launched its USD 1.035bn secured bond at 8.95%, a source close with the transaction said. Earlier today, the company released initial guidance in the low-9% area, as reported. #Books on the deal reached USD 2.3bn, a portfolio manager said. Proceeds from the transaction will be used to pay USD 740m of the issuer's debt. Yinson Boronia owns a 75% stake in the Anna Nery FPSO, which operates in the Marlim field, in the Campos basin off the coast of Southeast #Brazil, as reported. State-owned oil company #Petrobras signed a 25-year charter agreement to hire Anna Nery. The contract started in May 2023, as reported. The base charter rate is USD 488,090 per day and is adjusted yearly by the US Consumer Price Index (CPI) rate. Since March 2024, Petrobras has been paying a USD 532,067 daily chart rate, the same source said. The bonds will be #secured by rights over the charter agreement, the collection accounts, equity interest and a subordination deed for any intercompany loans made by shareholders or affiliates, and a mortgage on the vessel, as reported.  The deal also provides a six-month #debt service reserve account and a three-month operating and maintenance reserve account. The issuer chose Citigroup and Santander as global coordinators, together with HSBC, ING, JP Morgan, and Natixis as joint bookrunners to market the deal, as reported.

14

Energy commodities are back following Oil rally Is there the risk for another Oil mini shock due to supply constrains ( Hormuz)? … Oil exporters in the Opec cartel together have more than 5mn b/d of spare production capacity, mainly in Saudi Arabia and the United Arab Emirates, which could be brought online in case of disruption to Iranian supplies. But if Iran blocked tanker traffic through the Strait of Hormuz, dubbed “the world’s most important oil transit chokepoint” by the US Energy Information Administration, the move would halt about a fifth of global consumption. This would include exports from big Gulf producers Saudi Arabia, UAE, Kuwait and Iraq. Qatar also exports its liquefied natural gas through the strait…

17

12 Comments

Happy Friday! In our Global LNG report this week...by Emily Chow Asian spot #LNG prices rose this week to their highest level of the year so far, tracking gains in European #gas and amid colder temperatures in both regions. The average LNG price for January delivery into northeast Asia rose to $14.60 per mmBtu, industry sources estimated. "This week's further escalations between #Russia and #Ukraine have returned a steep risk premium to European gas and by default Asia's #JKM market, despite actual gas supplies being uninterrupted," said Florence Schmit, energy strategist at Rabobank London, of the Asian Japan-Korea-Marker benchmark. European benchmark gas prices at the Dutch #TTF hub have been trading at one-year highs on concerns over Russian gas supply and as cold temperatures reduced gas stockpiles. Russia's Gazprom last weekend halted gas supplies to Austrian gas importer OMV in a dispute over payments, while Russia's war with Ukraine intensified. While the risk of #Europe losing more Russian gas has lifted the TTF consistently above the JKM market for the first time since end-2022, the spread remains narrow and could turn back to a JKM premium in the short-term if Russian flows continue and the situation stabilizes, added Schmit. "But given the intensification of fighting this week we could equally see the TTF maintain its premium over the JKM for a while as Europe scrambles to import LNG cargoes. Either way, markets will be higher for longer." At least five LNG cargoes have diverted from Asia to Europe on higher gas prices after Gazprom halted supplies to OMV. But northeast Asian delivered markets have risen in competition with Europe, with at least one diverted carrier appearing to have switched back to head for Asia again, said Samuel Good, head of LNG pricing at commodity pricing agency Argus. In Japan, while lower temperatures have recently led to higher gas consumption and power prices, nuclear restarts could reduce reliance on gas-fired power generation and ease LNG demand, said Rystad Energy in a note, adding that a 50-60% probability of above-average temperatures is still forecast until Nov. 29. S&P Global Commodity Insights Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in January on an ex-ship (DES) basis at $14.800/mmBtu on Nov. 21, a $0.25/mmBtu discount to the January gas price at the Dutch TTF hub. Argus Natural Gas / LNG assessed the price at $14.790/mmBtu, while Spark Commodities assessed the December delivery price at $14.635/mmBtu. The U.S. arbitrage, diverting a physical cargo from one market to another, is still signalling prompt month U.S. cargos are incentivised to voyage to Northewest Europe for a ninth straight week, said Spark Commodities analyst Qasim Afghan. In LNG #freight, Atlantic rates fell to $15,500/day on Friday, wiping out gains made in the last two weeks, Afghan said. Pacific rates declined to $23,000/day.

48

2 Comments

S&P's Dan Yergin Warns of Global Economic Risks Amid Mideast Tensions https://lnkd.in/dsCMAeKc Renowned energy expert Dan Yergin, Vice Chairman of S&P Global, has raised concerns about the potential impact of escalating tensions in the Middle East on the global economy. Yergin, a Pulitzer Prize-winning author and authority on energy and geopolitics, highlighted the risks posed by the conflict and emphasized the need for careful observation and strategic decision-making in response to the situation. #economicrisks #middleeasttensions #globaleconomy CEO Outlook Magazine

1