Thursday, June 28, 2007

Asian Aframax Rate Drops First Time in 6 Days

Asian Aframax Tanker Shipping Rate Drops First Time in Six Days
By Katherine Espina
June 27 (Bloomberg)


The cost of shipping 80,000 metric tons of oil on Asian routes dropped the first time in six days as most bookings for early July have been concluded. Further declines may be limited as freights for the rest of the month are fixed.

The rate of shipping crude or fuel oil on so-called Aframax tankers to Singapore from Kuwait dropped 0.13 percent to Worldscale 154.42 yesterday, according to the London-based Baltic Exchange. Last week, it rose the most since March 30.

Asian freight rates for shipping oil on Aframax tankers increased 6 percent last week as charterers hired vessels to load fuel, brokers including London-based Galbraith's Ltd. said. Some owners of Aframax vessels expect rates to rise after vessel requirements for early next month have been fixed, Kats Nishikawa at shipbroker Matsui & Co. in Tokyo said.

``A number of fixtures have been concluded throughout the week and there are still plenty lined up,'' said Galbraith's in its report for the week ended June 22. ``This firmer trend looks set to continue next week.''

This week, four Aframax tankers are expected to arrive in Singapore and three more in the first week of July, according to AISLive on Bloomberg.

The Baltic Dirty Tanker Index, which tracks 12 routes, has fallen 21 percent this year. It fell 1.1 percent to 1041 yesterday, the second day the measure fell. The cost of shipping a barrel of oil on an Aframax vessel on the Kuwait-to-Singapore route stood at $2.01 yesterday, unchanged for a second day, according to Bloomberg data.

Indonesia, Japan Route

The Aframax tanker rate on the Indonesia-to-Japan route was steady at Worldscale 157.50 on June 22, the daily cost for the past 17 days, according to Bloomberg data. Shipping a barrel of oil on the route amounts to $1.84, little changed in the past three weeks, according to Bloomberg data.

The costs of shipping gasoline and other so-called clean petroleum products to Asia were mostly lower yesterday, according to the Baltic Exchange.

Shipping rate for 55,000 tons of products on the route to Japan from the Middle East dropped 0.9 percent to a four-month low of Worldscale 155.77, based on data from the Baltic Exchange. The rate has fallen 22 percent in the past 21 days.

The cost of carrying 75,000 tons of gasoline, naphtha or jet fuel from Singapore to Japan declined for a 12th day. The rate dropped 3.2 percent to Worldscale 124.17, the biggest drop since Jan. 23, Baltic Exchange data showed. The cost of shipping on the route fell 5 percent last week, the most in 11 weeks.

The rate of shipping 30,000 tons of oil products from Singapore to Japan rose 0.3 percent to Worldscale 198.96 yesterday, a second day of gains. It has slumped 33 percent this year.

I've moved Oil Tanker coverage to a new address:
http://oiltankers.blogspot.com/

Saturday, June 23, 2007

Peak Oil Crisis - Tom Whipple

Peak oil crisis: approaching the cliff
by Tom Whipple
June 21, 2007

Last weekend across southern South Dakota the pumps went dry. Gas terminals from Sioux Falls to Yankton to Sioux City were empty. “There is simply not enough fuel coming down the pipeline into the delivery system” said a BP station owner. Eventually the tankers were sent to Nebraska to find gas. A minor glitch in the distribution? Possibly, but more likely a harbinger of more serious problems to come.

Meanwhile, I would like to tell you that Congress, which has been debating energy bills for the last two weeks, is getting ready to pass legislation that will make our lives easier during the troubled years ahead. Sadly, I cannot. From their public pronouncements and posturing, it is unlikely more than a dozen members of Congress have the slightest idea of what 2007 energy legislation should be trying to accomplish in an urgent manner.

Many of the just-barely-in-the-majority Democrats, especially in the Senate, are on the right track, with proposals to improve average gasoline consumption, and to increase the use of renewable energy. Scattered here and there are conservation measures and R&D money for more efficient something or others, but from the perspective of imminent oil depletion, the proposals are too little, too late. Setting efficiency goals for 10 or 15 years from now is absurd when the problems to solve may be upon us in 15 or 20 months, or, if the real alarmists are right, in 15 or 20 weeks.

However inadequate the Democrats’ proposals may be, they pale in comparison to the absurdity of the opposition to energy legislation forming on Capitol Hill. Detroit, in conspiracy with the coal and electric industries, is mounting a full court press to see that little gets through this Congress to upset the status quo – mild efficiency standards, no greenhouse gas regulation, no renewable energy mandates. From the opposition’s point of view, if Congress wants to do anything, then it might be OK for them to bankroll the R&D so we can convert good old American coal into our gasoline; don’t even think about taxing energy, but a few more subsidies might be nice.

With crucial Senate votes scheduled for later this week, it is still too early to judge what the final legislation will look like, but it is starting to look as if we are going to arrive at the precipice of oil depletion without Congress having done much of anything to mitigate the situation. The American automobile industry is clearly on its way to committing suicide; the coal industry does not seem to realize its days are numbered; and the electric industry seems to have no notion that, within a lifetime, fossil fuels and perhaps even some forms of nuclear energy are going to have to be replaced.

As a civilization, we are all to blame. Most Americans are showing little inclination to cut back on driving. In study after study we tell interviewers we are willing to spend our last nickel, mortgage the farm, and deprive our grandchildren before we will give up driving. We are all heading towards the cliff together.

Not much happened in the last week to tell us just how close we are to the cliff. There is a general strike going on in Nigeria that so far does not seem to be affecting oil production. Nigerian strikes are usually settled quickly, but there is a new president in charge so there could be surprises in store. In the Niger Delta, the insurgency bubbles along, despite the nominal ceasefire, with still more oil being shut-in by the insurgents during the past week.

From the perspective of oil production, Iraq continues to hold its own. OPEC is still refusing to consider production increases and the Chinese imports of crude oil continue to increase.

This week’s U.S. oil status report was a strange one. U.S. refinery utilization plunged to what should be an abysmally low 87.6 percent, but at the same time the refineries managed to produce the same amount of gasoline as the week before. Unless there is something wrong with the numbers, this confirms that improvements made to our refineries in recent years are now allowing them to squeeze considerably more gasoline out of each barrel of crude -- a definite plus. Imports increased a bit, resulting in U.S. gasoline stockpiles growing by 1.8 million barrels last week. There are still major shortages along the East Coast and the summer driving season is almost here. There seem to be some unusually large anomalies in this week’s report, however, so there may be revisions ahead.

In general, the gasoline stockpiles situation now can be categorized as serious rather than dire. We seem to be getting the gasoline we need without our refineries working too well and so far we seem to be able to find enough gasoline to import. From here through Labor Day it depends on how much we all drive and of course the hurricanes. None are yet in sight.



End

http://www.fcnp.com/index.php?option=com_content&task=view&id=1438&Itemid=35

http://www.energybulletin.net/31199.html

Thursday, June 21, 2007

Asian Aframax Ship Rate Gains

Asian Aframax Ship Rate Gains May Be Limited on Rising Supply
By Katherine Espina
June 21 (Bloomberg)


Gains in the cost of shipping 80,000 metric tons of oil on Asian routes may be curbed in the next several days as the supply of tankers increases, brokers including Matsui & Co. said.

The rate of shipping crude or fuel oil on so-called Aframax tankers to Singapore from Kuwait climbed for a second day, gaining 1.7 percent to 148.27 yesterday, according to the London-based Baltic Exchange. Shipment cost on the route fell 1.2 percent in the week ended June 15, the first decline in three weeks.

``There will be many vessels available in the Singapore area in the early part of July so the market may stay the same or even move lower,'' Kats Nishikawa, general manager at the chartering team of Matsui & Co. in Tokyo, said by phone. ``Unless we see more activity in the Singapore area, the market may be softer.''

This month, there are 12 Aframax tankers sailing to Singapore, according to AISLive on Bloomberg. The cost of shipping crude on Aframax vessels to Asian routes has declined 7.4 percent this year as capacity expanded.

The Baltic Dirty Tanker Index, which tracks 12 routes, has fallen 19 percent this year. The cost of shipping a barrel of oil on an Aframax vessel on the Kuwait-to-Singapore route stood at $1.97 as of June 20, unchanged for the previous 19 days, according to Bloomberg data.

Japan Bound

The Aframax tanker rate on the Indonesia-to-Japan route was steady at Worldscale 157.50, the daily cost for the past 12 days, according to Bloomberg data. Shipping a barrel of oil on the route amounts to $1.84, steady for the past two weeks, according to Bloomberg data.

The cost of shipping gasoline and other so-called clean petroleum products to Asia declined yesterday, according to the Baltic Exchange.

The cost of shipping 30,000 tons of oil products from Singapore to Japan fell 0.6 percent to Worldscale 200.42 yesterday, the lowest in eight weeks. It has slumped 20 percent the past four weeks, based on data from the Baltic Exchange.

Shipping costs for 55,000 tons of products on the route to Japan from the Middle East dropped 2.2 percent to Worldscale 161.92, the lowest since Feb. 15. The rate has fallen 17 straight days.

The cost of carrying 75,000 tons of gasoline, naphtha or jet fuel from Singapore to Japan declined for an eighth day. The rate dropped 1.5 percent to Worldscale 131.46 yesterday, the lowest in four months, Baltic Exchange data showed. The cost of shipping on the route fell 3.2 percent last week, the second weekly decline.

Caribbean Tanker Rates Fall

Caribbean Tanker Rates Fall as Oil Supplies Jump, Plants Slow
By Todd Zeranski
June 20 (Bloomberg)



Rates to ship crude oil from the Caribbean basin fell as a U.S. Energy Department report indicated oil stockpiles increased and refinery utilization rates fell.

Two Aframax tankers, which each can transport about 600,000 barrels of oil, were hired today for an average rate in the industry standard Worldscale 145, according to a daily report from Houston-based shipbroker Lone Star, R.S. Platou.

Valero Energy Corp. contracted one tanker to ferry crude between St. Eustatius and the U.S. East Coast, and Royal Dutch Shell Plc contracted a ship to transport oil from the east coast of Mexico to the U.S. Gulf Coast, according to Lone Star.

Demand in the region is hampered by low refinery operating rates. Refineries operated at 87.6 percent of capacity last week, the lowest since the week ended March 30, according to the department. It was the lowest utilization rate for the period in 16 years.

Crude-oil inventories surged 6.9 million barrels to 349.3 million in the week ended June 15, the report showed. It was the biggest one-week gain since the week ended March 19, 2004.

Worldscale 145 is equivalent to about $20,280 per day after expenses such as fuel and port fees, according to New York-based- broker Poten & Partners.

General Maritime Corp., the second-largest U.S. tanker owner, has a break-even rate of about $12,000 a day. The New York-based company operates many of its vessels in the Caribbean.

Overseas Shipholding Group is the biggest U.S.-based oil- tanker owners.

Gonu leaves $3.8bn cloud over Oman

Gonu leaves $3.8bn cloud over Oman
by Dylan Bowman
17 June 2007
ArabianBusiness.com


Cyclone Gonu has cost Oman's economy almost $4 billion, according to initial government estimates.

An official source at the Ministry of National Economy said reconstruction could cost the country between $3.24 billion and $3.89 billion, and that the ministry is currently working with various governmental authorities to repair infrastructure damaged or destroyed by the cyclone, WAM reported today.

Cyclone Gonu wreaked havoc on the country earlier this month, battering its coast for three days and killing around 50 people.

The cyclone halted Oman’s oil and gas exports and damaged main roads and bridges connecting the eastern provinces with the capital Muscat, and caused floods and landslides across all regions.

In Muscat's centre, streets were turned into turbulent rivers, trees uprooted and power lines cut. Cars were left piled on top of each other, stuck in rubble and mud.

The country also suffered from power outages for days after the storm left its coast
and moved up to southern Iran.

At its peak, Gonu was measured as a maximum-force Category Five hurricane.

Oman's weather centre, which has been keeping records since 1890, says Gonu could have been the strongest storm to reach the coast since 1977.

Wednesday, June 20, 2007

Counterinsurgency Warfare (part two)

The same kind of politics are now in evidence in Afghanistan and Iraq, including the ineffectual enshrinement of Islam in the new Iraqi constitution, and the emergence of clerical warlords who are as ready to use violence as Cardinal Ruffo was. Since the 2003 invasion, both Shiite and Sunni clerics have been repeating over and over again that the Americans and their “Christian” allies have come to Iraq to destroy Islam in its cultural heartland and to steal the country’s oil. The clerics dismiss all talk of democracy and human rights by the invaders as mere hypocrisy — with the exception of women’s rights, which the clerics say are only propagandized to persuade Iraqi daughters and wives to dishonor their families by imitating the shameless nakedness and impertinence of Western women.

The vast majority of Afghans and Iraqis naturally believe their religious leaders. The alternative would be to believe what for them is entirely unbelievable: that foreigners are unselfishly expending blood and treasure in order to help them. They themselves would never invade a foreign country except to plunder it, the way Iraq invaded Kuwait, thus having made Saddam Hussein genuinely popular for a time when troops brought back their loot. As many opinion polls and countless incidents demonstrate, the Americans and their allies are widely considered to be the worst of invaders, who came to rob Muslim Iraqis not only of their territory and oil but also of their religion and even their family honor. Many Muslims around the world believe as much, even in Turkey, whose most successful recent film depicted an American Jewish military doctor who was operating on Iraqis not to save their lives but to remove their kidneys, which of course he was sending back to the U.S. for transplantation and his personal profit (he was Jewish after all). It is the same in Afghanistan, where the American-imposed quota of women parliamentarians has caused widespread resentment, not least because most Afghans are scandalized by the spectacle of a woman contradicting a man in public — as in, for example, televised parliamentary debates.

In other words, “Integrating Civil and Military Activities” to improve local conditions need not gain public support. And even if it did, it does not automatically follow that such support would be decisive, or even important.

http://www.harpers.org/archive/2007/02/0081384 Edward Luttwak

Tuesday, June 19, 2007

Asian Aframax Rates May Extend Decline a Second Week

Asian Aframax Rates May Extend Decline a 2nd Week
By Katherine Espina
June 19 (Bloomberg)


The cost of shipping 80,000 metric tons of oil on Asian routes, which fell 1.2 percent last week, may extend its decline until charterers book their cargoes for July.

The rate of shipping crude or fuel oil on so-called Aframax tankers to Singapore from Kuwait declined 0.13 percent to 144.81 yesterday, according to the London-based Baltic Exchange.

Rates to ship crude on Aframax vessels to Asian routes last week dropped the first time in three weeks as capacity expanded. The cost of hiring Aframax tankers may rise or hold steady when more vessels are hired to load cargoes for July, shipbrokers including London-based Galbraith's Ltd. said.

There are 12 Aframax tankers sailing to Singapore this month and none for July yet, according to AISLive on Bloomberg.

Saudi Arabia, the world's biggest oil producer, Iran, and the United Arab Emirates this week may release port-loading schedules for July crude shipments, stoking demand for supertankers.

That may lead to increased demand in the following weeks for Aframax vessels, which are predominantly deployed on short-haul routes or intra-regional trade and in harbors too small to accommodate supertankers.

The cost of shipping a barrel of oil on an Aframax vessel on the Kuwait to Singapore route stood at $1.97 as of June 18, unchanged for the previous 17 days, according to Bloomberg data.

Japan Bound

The Aframax tanker rate on the Indonesia to Japan route was steady at Worldscale 157.50, the daily cost for the last two weeks, according to Bloomberg data. Shipping a barrel of oil on the route amounts to $1.84, steady from the last two weeks, according to Bloomberg data.

The cost of shipping gasoline and other so-called clean petroleum products to Asia declined on June 18, according to the Baltic Exchange.

The cost of shipping 30,000 tons of oil products from Singapore to Japan fell 1.03 percent to Worldscale 202.88 yesterday, the lowest in almost eight weeks. It has slumped 20 percent the last four weeks, based on data from the Baltic Exchange.

Shipping costs for 55,000 tons of products on the route to Japan from the Middle East dropped 0.4 percent to Worldscale 168.46, the lowest in about four months. The rate fell 15 percent in the past four weeks.

The cost of carrying 75,000 tons of gasoline, naphtha or jet fuel from Singapore to Japan declined for a sixth day. The rate dropped 1.07 percent to Worldscale 135.42 yesterday, the lowest in about six weeks, Baltic Exchange data showed. The cost of shipping on the route fell 3.2 percent last week, the second weekly decline.

Monday, June 18, 2007

The Theory of Counterinsurgency Warfare

Luttwak

THE THEORY OF COUNTERINSURGENCY WARFARE

Two distinguished American generals of exceptional intelligence, James N. Mattis of the Marine Corps and David H. Petraeus of the Army, each now responsible for the training and doctrine policy of his own service, have recently circulated the text of a new “counterinsurgency” field manual, FM 3-24 DRAFT, which they propose for official use. Its doctrines emerge from the chapter titles. After a first chapter of definitions (which any military manual must have, because the battlefield is no place for semantic debate) we come to the first substantive chapter, “Unity of Effort: Integrating Civil and Military Activities,” in which the authors duly recognize and strongly emphasize the essentially political nature of the struggle against insurgents. That is hardly an original discovery, as the two generals and their staffs would be the first to recognize, yet it is still necessary to affirm what should be obvious, because amid the frustrations of fighting a mostly invisible enemy, it is hard to resist the tempting delusion that some clever new tactics, or even some clever new technology, can defeat the insurgents.

http://www.harpers.org/archive/2007/02/0081384

Saturday, June 16, 2007

OPEC Quotas May Bring In-Fighting in September

May 22, 2007
By John Troland, Tom Waterman




Houston, TX - At the September 2007 OPEC meeting there may be trouble brewing if expectations that Angola, the newest member of OPEC, is assigned a quota. With Angolan crude output on the rise from recent estimates of about 1.5 mbpd to more than 2.0 mbpd in the not too distant future, there will probably be requests from other OPEC producers of sweet crude such as Algeria, Libya and most importantly Nigeria, to increase their quota allotments. Currently Nigeria's quota is 2.044 mbpd with full production potential nearly 1.0 mbpd above that level, assuming militant actions in the Niger Delta were to cease.

Nigeria has for some time been a price hawk although at current levels, seem less concerned about its quota allotment than in past years. The government also appears less concerned about the lost production. We suspect that the central government, at the moment, is not overly concerned with the militant actions as it does keep prices at artificial levels. Market bulls are quick to point to lost production in Nigeria as a major factor, when other hype fails. They can point to Nigerian output of about 1.0 mbpd lost to ongoing strife in the country. But as we stated in an earlier article, the additional 1.0 mbpd would put Nigeria way over its quota.

As history has proven, OPEC members have little problem with each other when prices are high and moving higher, but when prices begin to fall, the cheating expands as member countries try to maintain a similar revenue flow. We suggest that this scenario is closer to happening than some analysts predict. Both Angola and Nigeria will continue to seek higher and higher quotas going forward. This puts the onus on major OPEC producers such as Saudi Arabia, Iran and others who continue to enjoy much larger quotas. Will the Saudis, in particular, be willing to cut back its quota enough to support high prices? An even bigger question is will other OPEC members show restraint in curbing production to quota levels?

The problems arise as Algeria, Angola, Libya and Nigeria do not have quotas proportionate to output. As we suggested earlier, OPEC history will repeat itself at some point in the not too distant future if the above mentioned countries are successful in getting higher quotas.

Our position is they will revert to cheating, which logic dictates they are probably engaged in right now. This will eventually lead to the same problem we had last summer as the crude oil market was flooded. With the possible exception of Saudi Arabia and perhaps Kuwait, the rest of OPEC countries are cheating now if they have the capacity to overproduce. We are approaching the saturation level where crude oil is ample and if the situation persists, the fight will be on for the last buyer of crude oil.

While tanker charters and other market barometers often measure crude shipments, they do not measure the amount of crude oil available. Countries will store excess production and hope to sell it at elevated levels somewhere down the road. OPEC never does well in a down market. This is why there is nothing but silence from the cartel recently. They do not wish to upset the apple cart. Just as the majors in the U.S. are really not to blame for the current market prices, they are enjoying the profit margins, and are really not interested in seeing a change from the status quo. Every oil company executive knows that speculation is driving this market, but they won't say it publicly, even as many face hearings in Washington on the subject of gasoline prices. Right now, the volatility favors the oil companies, so don't expect any complaining.

Ever wonder why we have not run out of gasoline? There are no lines at retail outlets anywhere in the country at the present time. Neither do we hear about signs posted saying "We're Out of Gas!" The hype just keeps things moving up.

Friday, June 15, 2007

Cost of Gonu Rebuild in Millions

ArabianBusiness.com
by Conrad Egbert
16 June 2007

The cost of reconstructing Oman after last week's Cyclone Gonu is set to run into millions of dollars.

According to a developer operating in the country, most of the damage was done to roads and infrastructure, along with building projects under construction.

"The damage has been quite extensive to the infrastructure with widespread destruction of roads and bridges that could cost hundreds of millions of dollars, but the authorities are working round the clock to try and get things back to normal," said Amer Al Fadhil, vice president - external affairs, The Wave, Muscat - one of the largest waterfront developments in Oman.

"Oman is focusing on three aspects at the moment. The first priority is relief operations to those who need it, with The Wave also sending out basic necessities across Muscat. The second is the clean-up, while the third is, of course, the reconstruction."

Roads and bridges have suffered extensive damage and the city has turned into a mini-lake due to water logging in many areas.

Muscat's terrain is mountainous with wadis (dried up river beds), which are used as residential and commercial space. Due to these low-lying areas, rain and seawater brought in by the storm caused severe flooding of the wadis, resulting in parts of roads and bridges being swept away as well as buildings being submerged.

"Most of the damage has been to the infrastructure," said David Skinner, regional manager, Carillion Alawi, Oman.

"A section of a road outside the Seeb Airport that is being constructed by us was washed out but we started repairs on the morning after the storm [Thursday 7 June] and worked round the clock to get it functional by 5am on Saturday [9 June]."

The most affected areas have been Al Hubra, Qurum and Amerat, which has been totally cut off due to the collapse of its only highway connection.




Other roads that have been affected are Al Khodh and Southern Marbela, while storm waters that tore through a wadi ripped open the Qurum high road to Darsait.

A McDonald's restaurant on the edge of Wadi Aday in Qurum was almost completely submerged by the flood waters along with Qurum Park, a popular recreational area near the shore.

Muscat Municipality chairman, Abdullah Bin Abbas, said that the city has been devastated due to the cyclone but will soon be back on track.

"We are doing our best to restore city life back to pre-Gonu days," he said.



Thursday, June 14, 2007

UAE to up oil output 30%

by Dylan Bowman
14 June 2007
ArabianBusiness.com


The UAE is looking at upping its oil output 30% in the next two years, the country’s minister of energy said on Wednesday. Mohammad Bin Dha'en Al Hamili said during a press conference the country was considering raising production from 2.7 million barrel per day (BPD) to 3.5 million barrel per day by 2009. The minister, who is also the current president of OPEC, said both the UAE and OPEC are worried about oil price stability, but that there are enough oil supplies.

He attributed the rise in prices to political tension in some production areas, market speculations and refining bottleneck in some producing countries. Al Hamili called for more communication between oil producing nations and consumer countries in order to create greater stability within the market and wider global economy.

Wednesday, June 13, 2007

Persian Gulf Tanker Rates May Extend Decline

Persian Gulf Oil-Tanker Rates May Extend Decline on Ship Supply
By Grant Smith
June 13 (Bloomberg)



The cost of shipping Middle East crude oil to Asia, which rose for the first time in 18 days yesterday, may extend this month's 10 percent decline because of excess supplies.

A surplus of spare supertankers has accumulated after routine maintenance among Chinese refiners in May damped oil imports. There are almost as many ships available for the first two weeks of July as will be needed for the entire month, according to an e-mailed report today from Paris-based shipbrokers Barry Rogliano Salles.

``Rates are taking a small step forward but are still under pressure, with plenty of tonnage available for the remainder of June and into early July,'' Nikolaos Varvaropoulos of Optima Shipbrokers said in an e-mail from Athens.

Freight rates for very large crude carriers, or VLCCs, on the benchmark route to Japan, rose 0.1 percent yesterday to 69.14 Worldscale points. Rates have lost 22 percent in the past four weeks, according to the London-based Baltic Exchange.

Rates temporarily halted their slide yesterday as owners refused to offer further discounts on the vessels they hire, Halvor Ellefesen of shipbrokers SeaLeague AS said in an e-mail.

China's crude oil imports rose at the slowest pace in four months in May, customs figures released in Beijing yesterday showed. The imports rose 4.7 percent to about 3.1 million barrels a day. There are 91 supertankers free to July 13, compared with 103 cargoes that typically load in the Persian Gulf each month, Barry Rogliano said.

Break Even

Worldscale points are a percentage of a nominal rate, or flat rate, for a specific route. Flat rates, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.

At 69.14 Worldscale points, owners of modern VLCCs can earn about $41,337 a day on a 38-day round trip from Saudi Arabia to South Korea, based on a formula by R.S. Platou, an Oslo-based shipbroker, and Bloomberg bunker prices.

Frontline Ltd., the world's biggest oil-tanker company by capacity, said May 30 that it needs $29,500 a day to break even on each of its VLCCs.

Saturday, June 9, 2007

Cargo Ship sinks at Bandar Abbas

LONDON, June 10 (IranMania)

Following devastating tropical storm, Cyclone Gonu, which hit Persian Gulf region a cargo ship sank in the coastal waters of Haghani jetty in Bandar Abbas on Wednesday, it was announced, IRNA reported.

Speaking to IRNA, Colonel Asghar Ghotbzadeh said the ship had already been seized by coastal guards for illegal transport of crude oil.

Following the incident, all crew on board were evacuated and are all in good health conditions, he said.

Cyclone Gonu Oman Oil Facilities

ArabianBusiness.com - June 8th

Gonu peaked as a maximum-force Category Five hurricane on Tuesday and faded to a Category One hurricane on Wednesday. Apart from the 32 dead, at least 30 people were missing, Omani news agency said.

Further north to Oman's east coast, the United Arab Emirates' port of Fujairah, one of the world's largest ship refuelling centres, said 11 sailors were rescued after their boat sank in regional Omani waters on Wednesday.

Port Director Moussa Murad said there were 10 sailors missing from the same boat. The rescued sailors were nine Indians, a Sudanese and one Eritrean. The port reopened on Thursday after it closed on Wednesday.

Three people were killed in southern Iran on Thursday while people within 300 metres (yards) of the coast in Hormozgan province had been evacuated, Iran state television said.

State media said roads and houses in Iran's southeastern province of Sistan-Baluchestan had been damaged and many coastal areas were cut off by flooding.

Oman's only 650,000 barrel per day oil terminal Minal al Fahal resumed operations after a three-day closure. Oman carried out tests on pipelines in the terminal before it resumed operations.

Petroleum Development Oman said on Thursday that operations and facilities had escaped damage.

PDO, a majority state-owned firm, produces most of Oman's crude. PDO expects its output to decline by around 20,000 bpd this year to between 560,000 and 570,000.

The storm had raised fears of a disruption to exports from the Middle East, which pumps over a quarter of the world's oil, pushing prices to around $71 a barrel on Thursday.

The main liquefied natural gas terminal at Sur, which was badly hit, was not operating either, a shipper said. Sur terminal handles 10 million tonnes per year of such gas.

Sohar refinery and port reopened and these facilities were working as well as before the storm, the company said.

Thursday, June 7, 2007

Oman Monthly Oil Production Cyclone Gonu

Latest Update 11am Gulf Time Sunday

Oman produces 720,000 barrels per day of crude oil and exports approximately 650,000 bpd of that. Its production is declining at approximately 5% annually.

Oman Oil Production Gonu

Latest Update 11am Gulf time Sunday
Yearly Oil Production from Oman



updates on Cyclone Gonu

more oil production information

Gonu Misses Rigs Updated Image 10am Muscat

Latest update 11am Gulf time Sunday

By Eduard Gismatullin
June 7 (Bloomberg)



Crude oil traded below $66 a barrel in New York as Tropical Cyclone Gonu missed oil rigs and fields in the Middle East, causing only some disruption to shipping.

Gonu battered southern Iran early today after hitting the eastern coast of Oman yesterday, closing all its seaports and oil- export terminals two days ago and causing the country to suspended oil and gas exports. Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, the Associated Press reported.

``We think that bulls will find it difficult to make much of a case centering around the fading Persian Gulf cyclone,'' Edward Meir, an analyst at Man Financial in Darien, Connecticut, wrote in a report. Gonu ``did not hit any key oil installations.''

Crude oil for July delivery was down 1 cent at $65.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:08 a.m. in London.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. Omani time today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

Prices rose yesterday following reports that Turkish troops chased Kurdish guerrillas into northern Iraq. Government officials from Turkey and the U.S. denied any attack occurred.

Iraq has the world's third-biggest proved oil reserves, according to BP Plc. Turkey has threatened to launch a military operation unless U.S.-led coalition forces in Iraq eradicate the threat posed by the Kurdistan Workers' Party. The Turkish military has deployed tens of thousands of troops near the border to stop members of the group from entering Turkey.

``Neither do we think the Turkish incursions will morph into a wider conflagration,'' Meir wrote. The Turkish parliament ``will have to sanction any sustained military operation.''

In London, Brent crude oil for July settlement fell 13 cents to $70.89 a barrel on the ICE Futures Exchange at 9:10 a.m. in London.




Cyclone Gonu Misses Rigs

Latest Update 11 am Gulf Time Sunday

By Eduard Gismatullin
June 7 (Bloomberg)


Crude oil traded below $66 a barrel in New York as Tropical Cyclone Gonu missed oil rigs and fields in the Middle East, causing only some disruption to shipping.

Gonu battered southern Iran early today after hitting the eastern coast of Oman yesterday, closing all its seaports and oil- export terminals two days ago and causing the country to suspended oil and gas exports. Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, the Associated Press reported.

``We think that bulls will find it difficult to make much of a case centering around the fading Persian Gulf cyclone,'' Edward Meir, an analyst at Man Financial in Darien, Connecticut, wrote in a report. Gonu ``did not hit any key oil installations.''

Crude oil for July delivery was down 1 cent at $65.95 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 9:08 a.m. in London.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. Omani time today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

Prices rose yesterday following reports that Turkish troops chased Kurdish guerrillas into northern Iraq. Government officials from Turkey and the U.S. denied any attack occurred.

Iraq has the world's third-biggest proved oil reserves, according to BP Plc. Turkey has threatened to launch a military operation unless U.S.-led coalition forces in Iraq eradicate the threat posed by the Kurdistan Workers' Party. The Turkish military has deployed tens of thousands of troops near the border to stop members of the group from entering Turkey.

``Neither do we think the Turkish incursions will morph into a wider conflagration,'' Meir wrote. The Turkish parliament ``will have to sanction any sustained military operation.''

In London, Brent crude oil for July settlement fell 13 cents to $70.89 a barrel on the ICE Futures Exchange at 9:10 a.m. in London.

Wednesday, June 6, 2007

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Cyclone Gonu Batters Southern Iran

Latest Update 10 am Gulf time Friday

By Ryan Flinn and Aaron Sheldrick
June 7 (Bloomberg)

2am EST
7am GMT
10am Dubai
10am Muscat
9:30am Iran



Cyclone Gonu, the worst to hit the Arabian Peninsula in more than 60 years, battered southern Iran, prompting authorities to close schools and universities, cancel some flights and evacuate thousands of people from coastal areas.

The Health Ministry put hospitals on alert in southern Hormuzgan and Sistan-Baluchistan provinces late yesterday as the storm approached, the state-run Islamic Republic News Agency reported. The cyclone's outer winds knocked out electricity power lines in the port cities of Konarak and Chabahar, as people took refuge in shopping malls, IRNA said.

Gonu's center was 88 kilometers (55 miles) south of the town of Jask on the southern coast of Iran at 3:30 a.m. today, according to the latest U.S. Navy Joint Typhoon Warning Center advisory. Gonu's winds fell to 83 kilometers per hour as the storm moved north-northwest across the Gulf of Oman at 13 kilometers per hour.

The storm hit the east coast of Oman yesterday, where the Sultanate declared a state of emergency, ordering people to take shelter and shutting schools and offices until June 10. There were no immediate reports of casualties in either country.

Ships continued to pass through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf, Associated Press reported, citing Suresh Nair of the Gulf Agency Co. shipping firm. At least a quarter of the world's oil supplies passes through the strait.

Oil Platforms

Gonu probably won't threaten Iran's oil platforms in the Persian Gulf because they are far from the forecasted path of the cyclone, AP cited Bahram Narimanian, a spokesman for Iran's Offshore Oil Company, as saying yesterday.

In the southeastern coastal city of Chabahar, 4,000 university students were evacuated to higher ground yesterday, IRNA reported.

The Islamic Republic of Iran Air Lines yesterday canceled all flights from Konarak for 48 hours, IRNA added.

Oman closed all its seaports and oil-export terminals two days ago as the government suspended oil and gas exports, shipping executives and oil traders said. They said they didn't know how long exports would remain suspended.

Oman sits on the southeast coast of the Arabian Peninsula and produces about 700,000 barrels of crude a day. It borders Yemen, Saudi Arabia and the United Arab Emirates.

Suspending Operations

Fujairah port in the United Arab Emirates suspended all offshore bunkering operations, including fuel oil and gasoil, and the movement of utility boats two days ago because of the storm. The port is one of world's three largest for fuel oil bunkering, along with Rotterdam and Singapore.

Saudi Aramco, the world's biggest state-controlled oil company, said yesterday it doesn't expect Gonu to hurt production or exports from Saudi Arabia's eastern province.

Crude oil for July delivery on the New York Mercantile Exchange traded at $66.00 a barrel at 8:33 a.m. Singapore time today. It rose 35 cents to $65.96 a barrel yesterday.

Gonu, which means a bag made of palm leaves in the language of the Maldives, is the most powerful storm to hit the Arabian Peninsula since records began in 1945, AP reported.

Earlier this week, it was a Category 5 storm, the strongest on the Saffir-Simpson scale, as it churned across the northern Arabian Sea.




Iran Adding Attack Boats in Persian Gulf

By Tony Capaccio
June 6 (Bloomberg)


Iran is increasing its fleet of small attack boats capable of challenging warships and disrupting oil traffic in the Strait of Hormuz, the sea route for two-fifths of the world's daily supply of crude oil, the U.S. Navy says.

Iran's Revolutionary Guard Corps already has more than 1,000 of the speedboats ``and continues to add boats armed with anti- ship cruise missiles,'' said Robert Althage, spokesman for the U.S. Office of Naval Intelligence.

``Iran still states that the Iranian Revolutionary Guard Corps will employ swarming tactics in a conflict,'' Althage said in an e-mail. Naval intelligence, in its latest report on threats, said an attack against U.S. forces and commercial tankers ``could include over 100 boats in coordinated groups of 20 to 30 approaching simultaneously from multiple axes.''

The U.S. has two carrier groups in the Persian Gulf. The commander of these forces, Vice Admiral Kevin Cosgriff, said the attack boats have``a significant military capability.'' His fear is that Iran's central leadership might not have enough control over this Revolutionary Guard force to ensure against unauthorized attacks.

``I'm fairly comfortable that the regular Iranian navy and air force has a pretty good command-and-control system -- the key word is`control,''' he said. ``I don't have the same sense with the Revolutionary Guard.''

``Is there a rigorous, disciplined chain of command where people pay attention?'' Cosgriff said. ``In some instances, the answer would be yes. In other instances I've had some concern that people may be prone to miscalculation.''

``Somebody who gets fired up based on firebrand rhetoric is what I am speaking about,'' he said.

Mines, Torpedoes, Missiles

The boats -- up to 70 feet long and capable of speeds up to 57 miles per hour -- are armed with torpedoes and rocket- propelled grenades as well as cruise missiles and also are used to lay mines. The U.S. estimates Iran has 5,000 sea mines.

Cosgriff and other U.S. naval officers say they can defend against this threat. Still, attacks on tankers and a few sunken ships could disrupt traffic through the chokepoint of the world's most important oil transit route.

Iran launched a much smaller fleet of these attack boats against U.S. ships and U.S.-flagged tankers in the Persian Gulf in late 1987 through mid-1988 after the Reagan administration sided with Iraq in its war with the Islamic Republic.

The ships were able to lay mines, attack ships and disrupt oil traffic. They damaged at least one tanker traveling under the U.S. flag as well as the frigate USS Samuel Roberts.

Cosgriff said the U.S. now has four minesweepers deployed to the Gulf and the British Navy has two. The coalition ``routinely'' practices minesweeping and ``we are actually quite good at it,'' he said.

Defense Against 'Swarming'

Cosgriff, in a telephone interview yesterday from the United Arab Emirates, said the U.S. Navy has ``devised various tactics and other ways of coping with'' the swarming tactics of the small attack boats.

In addition, ``there are some limitations'' to launching an attack by these boats, he said. ``You just don't get 1,000 or 500 or even 20 of anything under way and tightly orchestrated over a large body of water to create a specific effect at a specific time and specific place. They have their own challenges.''

Officers of the aircraft carrier USS Stennis in the Persian Gulf offered similar assurances in onboard interviews June 1.

``We spend a lot of time making sure we have eyes out for that sort of thing,'' said Commander Chris Rentfrow, director of the Stennis's self-defense nerve center.

Cheney's Warning

The Stennis arrived in the Gulf 12 days after Vice President Dick Cheney spoke on the warship, highlighting the capability of the two carrier groups to protect sea lanes and send a warning that the U.S. won't tolerate Iran developing a nuclear capability.

The Stennis was joined by the Nimitz and the Marine Corps's Bonhomme Richard amphibious assault group in sailing through the Strait of Hormuz to conduct joint training exercises -- nine ships with 17,000 personnel in the largest daylight transit since 2003.

The maneuvers mark the second time in two months that two of the Navy's 11 aircraft carriers are in the Gulf for joint exercises. The Stennis exercised in March with the USS Dwight D. Eisenhower. Before that, the last time more than one carrier deployed in the Gulf was March 2003 for the Iraq invasion.

The current exercise will continue through tomorrow.

Raytheon System

The centerpiece of the Stennis's defenses is a Raytheon Co. Shipboard Shelf-Defense System installed last year that synthesizes data from the carrier's radar and anti-submarine sonar as well as Aegis air defense information gathered by the flattop's escort vessels into a single picture displayed on consoles.

Stennis operators can track up to 200 vessels or aircraft simultaneously, Rentfrow said in an interview. Two large digital maps showed the carrier was in the middle of the northern Persian Gulf about 37 miles from Busher, Iran. There was no significant Iranian naval or
air presence.

The system can ``absolutely'' deal with Iran's small boats, Rentfrow said. ``We practice a lot with these ships in terms of how to defend the zone around the carrier,'' he said.

One method is an old-fashioned .50 caliber machine gun on the vessel's stern, manned by a gunner in a grimy red t-shirt peering through binoculars into a hot, hazy Gulf horizon.

Senior officers of the Stennis, in interviews June 1 and May 31 onboard the ship, said the strike groups aren't exercising specifically to counter Iran but were practicing generic tactics to counter submarines, aircraft
and missile attacks.

This week the Stennis and Bonhomme Richard groups also planned an exercise practicing earthquake relief.

Stennis Strike Group Commander Rear Admiral Kevin Quinn, in response to a question, said the deployment of the two carrier groups isn't intended to send a message to Iran. ``I don't see it that way, but I'm the tactical guy,'' he said. ``My focus has been on exercising maritime skills'' and providing air support for ground troops in Iraq.

Cyclone Gonu Pummels Oman

By Aaron Sheldrick and Ryan Flinn
June 6 (Bloomberg)

Cyclone Gonu pummeled the northeast coast of Oman, where authorities ordered people to take shelter. The storm's winds weakened to 147 kilometers per hour (91miles per hour) as Gonu's eye skirted the coast southeast of Muscat.

The center of the cyclone, the worst to hit the Arabian Peninsula in more than 60 years, was 183 kilometers southeast of Muscat at 4 a.m. Oman time today, according to the latest advisory on the Web site of the U.S. Navy Joint Typhoon Warning Center. The storm is moving northwest at 15 kilometers per hour.

The Sultanate's civil defenses were mobilized, according to the Ministry of Information, as the country's meteorological agency warned waves as high as 12 meters (39 feet) would hit coastlines. The government declared a state of emergency, ordered people to take shelter and shut schools and offices till June 10. There were no immediate reports of injuries or damage. Gonu's eye is forecast to be close to Muscat by about 4 p.m. today before heading for the Strait of Hormuz and making landfall in southern Iran by June 8 or 9, according to U.S. Navy forecasters.

By the time it reaches the Omani capital, the storm's winds are expected to slow to 120 kilometers per hour, with gusts to 184 kilometers per hour.

Gonu is the most powerful storm to hit the Arabian Peninsula since records began in 1945, the British Broadcasting Corp. said. Earlier this week, it was a Category Five storm, the strongest on the five-step Saffir-Simpson scale, as it churned across the northern Arabian sea.

The government closed all ports and oil export terminals from 2 p.m. yesterday. The country produces about 700,000 barrels of crude oil a day.

Crude oil for July delivery rose as much as 28 cents, or 0.4 percent, to $65.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $65.82 at 10:26 a.m. Singapore time.

The rise was attributed to refinery maintenance in the U.S. which may limit increases in gasoline supplies.

Almost a quarter of the world's oil flows through the Strait of Hormuz, a waterway between Iran and Oman at the mouth of the Persian Gulf.

Latest update

Gonu Cyclone Oman - 2pm Muscat update 2

Gonu Cyclone Hurricane Oman Muscat Dubai Iran
Wednesday, June 6th

6am EST
11am GMT
2pm Dubai

2pm Muscat

Latest update

Gonu is a CAT 1 hurricane/cyclone located on the eastern tip of Oman, heading NW at 9mph up Oman’s northeast coast. It should hit the Iran’s southern coast within 24 hours. Check Dr. Jeff Masters’ Wunderblog for updated information and reports from the ground in the comments section.





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Gonu Cyclone Hurricane Oman Muscat Dubai Iran

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Wednesday, June 6th
6am EST
2pm Dubai
2pm Muscat


Gonu is a CAT 1 hurricane/cyclone located on the eastern tip of Oman, heading NW at 10mph up the Oman’s northeast coast. It should hit the Iran’s southern coast within 24 hours.

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Monday, June 4, 2007

Oman Cyclone Gonu 9AM Gulf Time

Latest Update

June 5 (Bloomberg)

Crude oil was little changed near a two- week high in New York after risingyesterday on risks to supplies from the Middle East and Nigeria.

Tropical Cyclone Gonu is heading northwest at 15 kilometers per hour on a path U.S. Navy forecasters expect will take it across the Gulf of Oman, an important shipping lane for oil supplies from the Gulf. Brent crude oil climbed as high as $70.63 a barrel yesterday on the risk to tankers operating in the Gulf and the threat of further strikes in Nigeria, Africa's biggest producer.

``The impact of the cyclone is lifting Brent and the New York price is responding to it,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``If the Nigerian situation amounts to any real disruption, further increasing the present disruptions, then it will affect Brent more.''

The contract rose $1.13, or 1.7 percent, to $66.21 yesterday, the highest close since May 21. Futures touched $66.48, the highest intraday price since April 30.

Gonu, earlier given the maximum rating of a Category Five storm on the Saffir-SimpsonHurricane Scale, weakened slightly into a Category Four storm with winds of 249 kilometers per hour (155 miles per hour) toward the Gulf of Oman, the Navy said.

Friday, June 1, 2007

OPEC oil output edges higher in May

June 1st, 2007
(Reuters)


OPEC boosted crude oil output in May as higher supply from members including Algeria and the United Arab Emirates countered a drop in Nigeria, a Reuters survey showed on Friday.
Ten OPEC members bound by output targets, all except Iraq and Angola, pumped 26.76 mbpd, up 110,000 bpd from April, according to the survey of oil companies, traders, OPEC officials and analysts.
The survey suggests OPEC's adherence to agreed supply curbs eased in May as global oil prices rallied. Brent crude is trading at around $68 a barrel, close to a high for 2007 near $72 reached last week.
"OPEC is shipping more barrels out and prices are holding up fine," said Paul Tossetti, director of market analysis at Washington-based PFC Energy.
The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, agreed last year to lower production by 1.2 million bpd from November 1 and by a further 500,000 bpd from February 1 to prop up prices.
May supply from the 10 countries was 880,000 bpd less than in October, according to Reuters estimates, or about 52 percent of the total production cut pledged.