Hydro Skimming Margins vs Cracking Margins
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Transcript of Hydro Skimming Margins vs Cracking Margins
Latest Oil Market Update Thursday, April 21, 2011
Oil prices headed for another weekly gain on Thursday as US inventories fell unexpectedly last week, stock markets rallied and the dollar weakened. At the time of writing, ICE Brent crude had climbed to $124.59/bbl while NYMEX WTI crude was trading at $112.16/bbl. Brent's premium over WTI was at $12.40/bbl on Thursday, having narrowed from over $16.00/bbl last week. While Northwest European and US refinery margins improved somewhat last week, Mediterranean margins deteriorated further on high crude prices.
Saudi Arabia's Oil Minister, Al-Naimi, said on Sunday that the Kingdom had slashed output by 800 kb/d in March, to 8.292 mb/d, due to over supply, despite shuttered Libyan supplies and soaring prices. A high degree of uncertainty regarding actual production levels arguably add to current market volatility. The latest IEA Oil Market Report assessed Saudi crude production at 8.9 mb/d in March.
Despite still rising oil prices, US weekly demand readings through April 15 appeared somewhat stronger, with four-week average total product demand up by 1.2% year-on-year. However, recent strength may stem from a mismatch in year-on-year comparisons of pre-Easter holiday deliveries versus 2010 when the holiday fell earlier in April. Moreover, declines in gasoline demand, down by 1.8% year-on-year on a four-week average basis, remained stark, signalling that price rises may be weighing on demand.
US oil inventories fell by 6.7 mb in the week ending 15 April. Lower crude oil imports drove a 2.3 mb draw in crude oil stocks, while inventories held at Cushing, Oklahoma, edged 0.8 mb lower from their record level of 41.9 mb reached the previous week. Gasoline stocks declined by 1.6 mb, shedding a total of 33 mb over the past nine weeks. Distillates dropped by 2.5 mb, with ultra low sulphur diesel bearing the brunt of the stock-draw. Refinery utilisation rose to 82.5% of capacity, from 81.4% in the previous week, on a recovery in East Coast runs from last week's record-low.
In Japan, three refineries, with a combined capacity of 625 kb/d remain closed, but other refineries are compensating for the lost output by raising capacity and utilisation rates where possible. The latest weekly report data from the Petroleum Association of Japan (PAJ) show that Japanese crude runs had rebounded to 3.31 mb/d in the week ending 16 April, representing 82.7% utilisation of total capacity (of 4 mb/d), but a high of 94.6% of operable capacity (assessed at 3.5 mb/d). The country’s trade ministry announced Wednesday that the amount of oil refineries are required to hold will stay at 45 days for another month, until 20 May, to ensure supply to the country’s quake hit Tohoku region. Japan lowered the oil demand cover requirements from 70 days following the disaster.
• Oil prices headed for another weekly gain on Thursday as US inventories fell unexpectedly last week. Prices were also supported by a stock market rally and a sharply weaker dollar.• Saudi Arabia's Oil Minister, Al-Naimi, said Sunday that the Kingdom had slashed output by 800 kb/d in March, to 8.292 mb/d, due to over supply and despite shuttered Libyan supplies and soaring prices. The latest OMR assessed Saudi production at 8.9 mb/d in March.• European crude demand remains muted by high refinery maintenance and poor margins. While Northwest European margins improved somewhat last week, Mediterranean margins deteriorated further on high crude prices.
Physical Crude Prices ($/bbl)
75
85
95
105
115
125
135
Jan Feb Mar AprDated Brent WTI M th1(Adj) Dubai M th1(Adj)
US Weekly Total Gasoline StocksFive-Year Range
170
180
190
200
210
220
230
240
250
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average
2010 2011
Source: EIA
Latest Oil Market Update:
Oil Prices
April 20, 2011 High Low 20 Apr close 13 Apr close Δ Change % ChangeNYMEX WTI Mth1 (Adj) 111.66 107.96 111.45 107.11 4.34 3.89
NYMEX WTI Mth2 (Adj) 111.91 107.71 4.20 3.75
NYMEX WTI Mth3 (Adj) 112.17 108.24 3.93 3.50
ICE Brent Mth1(Adj) 124.23 121.10 123.85 122.88 0.97 0.78
NYMEX No 2 Mth 1 (¢/Gal) 323.37 315.11 322.14 320.28 1.86 0.58
NYMEX RBOB Mth1 (¢/Gal) 328.16 322.55 327.73 324.24 3.49 1.06
ICE Gasoil Mth1 (Adj) ($/T) 1031.00 1005.75 1023.50 1017.75 5.75 0.56
NYMEXHenry Hub(Mth1)($/mmBtu) 4.34 4.27 4.31 4.14 0.17 3.94
Weekly Data
US Weekly Stock ChangesWeek ending 15 Apr 11
EIA (mb)
ProductStock Level
Change Vs
previous week
Change Vs previous year
Crude 357.0 -2.3 1.1
Distillate 148.3 -2.5 -0.5
Motor Gasoline 208.1 -1.6 -16.8
Heating Oil 33.5 -0.6 -9.9
RFG gasoline 0.8 0.2 -1.0
Kerosene 41.2 -0.2 -1.4
Crude Runs (mb/d) 14.1 0.1 -0.6
Thursday, April 21, 2011
NYMEX Crack Spreads ($/bbl)Front Month Closing Prices
0
5
10
15
20
25
30
35
Jan Feb Mar AprRBOB No.2 Heating Oil
Source: NYMEX
Crude Futures Prices ($/bbl)Front Month Closing Prices
75
85
95
105
115
125
Jan Feb Mar Apr
NYMEX WTI ICE Brent
Source: ICE, NYMEX
Physical Crude Prices ($/bbl)
75
85
95
105
115
125
135
Jan Feb Mar AprDated Brent WTI Mth1(Adj)
Dubai Mth1(Adj)
NYMEX WTI Forward Price Curve
104105106107108109110111112113114
1 2 3 4 5 6 7 8 9 10 11 12
$/bbl
23-Mar-11 06-Apr-1113-Apr-11 20-Apr-11
Source: NYMEX
US Weekly Total Crude Oil StocksFive-Year Range - Excluding SPR
280
300
320
340
360
380
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average2010 2011
Source: EIA
US Weekly Total Gasoline StocksFive-Year Range
170
180
190
200
210
220
230
240
250
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average
2010 2011
Source: EIA
US Weekly Total Distillate StocksFive-Year Range
90
100
110
120
130
140
150
160
170
180
190
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average2010 2011
Source: EIA
US Weekly Refinery ThroughputsFive-Year Range
11
12
13
14
15
16
17
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average2010 2011
Source: EIA
US Weekly Gasoline SuppliedFive-Year Range
8.4
8.6
8.8
9.0
9.2
9.4
9.6
9.8
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average
2010 2011
Source: EIA
US Weekly Distillate SuppliedFive-Year Range
3.03.23.43.63.84.04.24.44.64.85.0
Jan Apr Jul Oct
mb
Range 2006-2010 5-yr Average
2010 2011
Source: EIA
Japanese Weekly Refinery Throughput
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
Jan Apr Jul Oct
mb/d
2008 2009
2010 2011
Source:
Japanese Weekly Finished Product Stocks (incl. naphtha)
70
75
80
85
90
95
100
105
Jan Apr Jul Oct
mb
2008 2009
2010 2011
Source: PAJ
Source: Platts
Latest Oil Market Update:
Full-Cost Refinery Margins ($/Bbl) Average for Week ended
Jan-11 Feb-11 Mar-11 Δ Month Δ 23-Mar-11 30-Mar-11 6-Apr-11 13-Apr-11 20-Apr-11 Δ Week ΔNW Europe
Brent (Cracking) 1.15 0.18 0.54 0.36 0.38 1.70 0.34 -0.67 -0.19 0.48 Urals (Cracking) 2.88 1.88 3.15 1.27 3.22 4.58 3.50 2.85 3.04 0.19 Brent (Hydroskimming) -2.49 -2.86 -2.44 0.41 -2.24 -1.70 -2.98 -4.04 -3.85 0.18 Urals (Hydroskimming) -3.75 -4.04 -3.86 0.18 -3.62 -3.07 -4.23 -5.15 -5.21 -0.05
MediterraneanEs Sider (Cracking) 2.05 0.89 1.74 0.85 2.13 3.24 2.14 2.31 1.76 -0.55 Urals (Cracking) 1.71 0.66 0.55 -0.11 0.38 1.67 0.37 0.04 -0.17 -0.21 Es Sider (Hydroskimming) -4.25 -4.51 -2.85 1.67 -1.93 -1.57 -2.38 -2.39 -3.57 -1.17 Urals (Hydroskimming) -5.95 -6.22 -7.08 -0.86 -7.21 -6.49 -7.64 -8.64 -9.10 -0.46
US Gulf CoastBonny Light (Cracking) -2.52 -4.08 -3.53 0.55 -4.44 -2.97 -2.97 -3.55 -1.17 2.38 Brent (Cracking) -4.22 -5.44 -4.82 0.62 -5.78 -3.69 -3.88 -5.69 -3.95 1.74 LLS (Cracking) -0.65 -2.21 -0.61 1.60 -1.11 1.01 -0.14 -1.42 -0.08 1.33 Mars (Cracking) -1.07 -1.90 -1.84 0.06 -3.78 -0.02 -0.17 -1.81 -0.34 1.47 Mars (Coking) 2.40 0.57 1.86 1.28 0.38 3.41 3.33 2.21 4.15 1.94 Maya (Coking) 7.01 7.87 7.15 -0.73 7.70 7.20 6.03 6.13 7.35 1.22
US West CoastANS (Cracking) -1.85 3.54 -0.44 -3.99 0.40 1.88 2.19 0.77 1.60 0.83 Kern (Cracking) 3.41 10.25 1.67 -8.59 2.55 2.22 3.83 0.05 2.42 2.37 Oman (Cracking) -2.21 0.41 4.83 4.42 4.94 7.60 7.74 3.30 4.10 0.79 Kern (Coking) 10.37 18.75 13.45 -5.30 15.12 13.77 14.85 13.92 15.04 1.12
SingaporeDubai (Hydroskimming) -2.22 -1.75 -1.56 0.19 -1.29 -0.83 -0.56 -1.68 -2.19 -0.50 Tapis (Hydroskimming) -4.63 -5.03 -8.46 -3.43 -8.64 -8.65 -9.76 -10.70 -10.26 0.44 Dubai (Hydrocracking) 1.67 1.16 2.51 1.35 2.98 3.30 3.41 2.69 2.21 -0.48 Tapis (Hydrocracking) -2.61 -3.61 -5.91 -2.30 -5.93 -6.30 -7.69 -8.64 -8.24 0.40
Thursday, April 21, 2011
Med Refining Margins
-12
-10
-8
-6
-4
-2
0
2
4
Jan Feb Mar Apr
$/bbl
Urals Hydroskimming Urals Cracking
USGC Refining Margins
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
Jan Feb Mar Apr
$/bbl
Mars Cracking Bonny Cracking
Singapore Refining Margins
-5
-4
-3
-2
-1
0
1
2
3
4
5
Jan Feb Mar Apr
$/bbl
Dubai Hydroskimming Dubai Hydrocracking
NWE Refining Margins
-3
-2
-1
0
1
2
3
4
5
Jan Feb Mar Apr
$/bbl
Brent Cracking Urals Cracking
USWC Refining Margins
-10
-5
0
5
10
15
20
25
30
Jan Feb Mar Apr
$/bbl
Kern Coking ANS Cracking
China Refining Margins
-12
-10
-8
-6
-4
-2
0
2
4
6
Jan Feb Mar Apr
$/bbl
Dubai Cracking Cabinda Hydroskimming
The International Energy Agency's ("IEA") Oil Industry and Market Division makes every attempt to ensure the accuracy, completeness and clarity of content of this report. The IEA makes every effort to ensure, but does not guarantee, the accuracy or
completeness of the information in this report. The IEA shall not be liable to any party for any inaccuracy, error or omission contained or provided in this report or for any loss, or damage, whether or not due to reliance placed by that party on information in
this report. The IEA makes no representation or warranty regarding the correctness of any information contained herein, or the appropriateness of any transaction for any person.
The present report is prepared for general circulation and is circulated for general information only. Neither the information nor any opinion expressed herein constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures
or other derivatives related to such securities. Nothing herein shall be construed as a recommendation to buy or sell.
Fundamentals:
Demand
Demand (mb/d) Annual Growth (%)
1Q11 2Q11 3Q11 4Q11 2011 1Q11 2Q11 3Q11 4Q11 2011North America 23.95 23.67 24.17 23.93 23.93 1.6 -0.4 -0.3 -0.3 0.1Europe 14.18 14.03 14.63 14.57 14.35 0.0 -0.7 -1.1 -0.8 -0.7Pacific 8.15 7.42 7.63 8.17 7.84 -0.5 1.5 0.5 1.5 0.7Total OECD 46.28 45.12 46.43 46.67 46.13 0.7 -0.2 -0.4 -0.2 0.0Asia 20.51 20.80 20.29 20.96 20.64 6.3 4.5 4.8 2.1 4.4Middle East 7.43 7.71 8.17 7.53 7.71 4.6 3.0 2.8 2.1 3.1Latin America 6.21 6.46 6.60 6.51 6.45 3.0 2.9 2.5 2.2 2.6FSU 4.30 4.22 4.46 4.46 4.36 2.2 1.6 1.8 1.2 1.7Africa 3.33 3.38 3.35 3.38 3.36 4.4 2.6 3.2 2.3 3.1Europe 0.71 0.72 0.72 0.74 0.72 0.7 2.1 1.9 1.0 1.4Total Non-OECD 42.49 43.29 43.60 43.56 43.24 4.8 3.5 3.6 2.0 3.5World 88.77 88.41 90.03 90.23 89.36 2.6 1.6 1.5 0.9 1.6
US 19.28 19.03 19.51 19.24 19.27Europe 5* 8.77 8.57 8.90 8.81 8.76China 9.85 10.02 9.88 10.14 9.97Japan 4.69 4.09 4.36 4.67 4.45India 3.49 3.54 3.22 3.49 3.44Russia 3.01 2.99 3.24 3.18 3.11Brazil 2.68 2.78 2.87 2.87 2.80Saudi Arabia 2.53 2.88 3.17 2.65 2.81Canada 2.25 2.18 2.24 2.23 2.23
OPEC
OPEC Crude Production & Capacity (mb/d)
Jan 2011 Feb 2011 Mar 2011Sustainable Production
Supply Supply Supply Capacity1
Algeria 1.27 1.28 1.28 1.32 0.04 1.35
Angola 1.68 1.60 1.68 1.84 0.16 2.01
Ecuador 0.48 0.50 0.51 0.51 0.00 0.50
Iran 3.66 3.68 3.68 3.70 0.02 3.68 1 Capacity levels can be reached within 30 days and sustained for 90 days.
Kuwait2 2.31 2.35 2.42 2.55 0.13 2.55 2 Includes half of Neutral Zone production.
Libya 1.58 1.39 0.45 1.80 1.35 1.82 3 Nigeria's current capacity estimate excludes some 250 kb/d of shut-in capacity.
Nigeria3 2.24 2.16 2.05 2.50 0.45 2.66 4 Includes upgraded Orinoco extra-heavy oil assumed at 440 kb/d in March.
Qatar 0.82 0.82 0.82 1.00 0.18 0.98
Saudi Arabia2 8.80 8.90 8.90 12.10 3.20 12.10
UAE 2.44 2.48 2.52 2.70 0.18 2.74
Venezuela4 2.21 2.20 2.20 2.35 0.15 2.29
OPEC-11 27.49 27.35 26.51 32.38 5.87 32.67
Iraq 2.66 2.73 2.69 2.75 0.06 2.78
Total OPEC 30.14 30.08 29.20 35.13 5.93 35.45
World Balance Summary
DEMAND 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011OECD Demand 45.2 46.6 46.7 46.1 46.3 45.1 46.4 46.7 46.1
NON-OECD Demand 41.8 42.1 42.7 41.8 42.5 43.3 43.6 43.6 43.2
World Demand 87.0 88.7 89.4 87.9 88.8 88.4 90.0 90.2 89.4SUPPLY
OECD North America 14.0 14.1 14.4 14.1 14.4 14.1 14.2 14.4 14.3OECD Europe 4.2 3.8 4.2 4.2 4.3 4.1 4.0 4.2 4.1OECD Pacific 0.6 0.6 0.6 0.6 0.5 0.6 0.6 0.7 0.6
Total OECD Supply 18.9 18.5 19.2 18.9 19.2 18.8 18.8 19.2 19.0NON-OECD Supply 29.7 29.9 30.0 29.8 30.2 30.4 30.4 30.6 30.4
of which FSU 13.5 13.5 13.7 13.6 13.7 13.8 13.6 13.7 13.7Processing Gains 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.3Global Biofuels 2.0 2.1 1.8 1.8 1.5 1.9 2.3 2.1 1.9Total Non-OPEC 52.8 52.8 53.3 52.8 53.2 53.5 53.9 54.2 53.7OPEC Crude 29.1 29.3 29.5 29.2 29.8OPEC NGLs 5.1 5.3 5.5 5.3 5.7 5.7 6.0 6.0 5.9
Total OPEC 34.2 34.6 35.0 34.5 35.5Total OPEC incl. Angola & Ecuador 34.2 34.6 35.0 34.5 35.5World Supply 87.0 87.4 88.3 87.3 88.7
Stock Change & CallOECD Stock Change (Total Oil) 0.9 -0.4 -0.8 0.0 0.0
Total Stock Change & Misc 0.0 -1.3 -1.2 -0.6 0.0
Adjusted Call on OPEC & Stock change 28.1 29.9 30.6 29.4 29.5 28.9 29.9 29.7 29.5
5 Yr Avg Feb-10 Dec-10 Jan-11 Feb-11 Chg kb/d Change mb Vs Yr-1 (mb) Vs 5 yr avgVolume (mb)
Crude 972 992 956 981 979 -42 -1.3 -12.5 7.2
Total Products 1,399 1,442 1,420 1,459 1,412 -1529 -47.4 -30.4 12.7Total Oil 2,653 2,709 2,664 2,727 2,676 -1639 -50.8 -33.4 23.0
Days Cover (of forward demand)By Total Oil 59.6 57.6 59.1 59.2
By Total Products 31.7 30.7 31.6 31.3
OMR: 12 April 2011
Spare Capacity vs March 2011
Supply
End-2011 Sustainable
Production Capacity