Platts: OPEC Output Dips in August

Platts: OPEC Output Dips in August
Platts 9/7/2007
URL: http://www.rigzone.com/news/article.asp?a_id=49966

OPEC crude production fell by 40,000 barrels per day (b/d) in August, to 30.46 million b/d from 30.5 million b/d in July, mainly because of lower exports from Iraq, a Platts survey showed September 7.

The ten members bound by production agreements, however, boosted output by 80,000 b/d, to 26.79 million b/d in August from 26.71 million b/d in July, the survey showed.

OPEC ministers meet in Vienna on September 11 to review the current agreement, which sets target output at 25.8 million b/d. Several ministers have said in the runup to the meeting that they do not see any need for the group to raise this target.

Actual OPEC-10 production has been steadily creeping up over the summer, however, and is now about a million barrels per day above the 25.8 million b/d target.

John Kingston, Global Director of Oil at Platts, said, "OPEC faces a real dilemma at its upcoming meeting. On the one hand, prices have climbed back up toward the $75 level, and the supply/demand balance projects a tight market in coming months, which might encourage OPEC to raise production. But when the organization looks at Friday's U.S. employment figures, and considers the ramifications of the US subprime mess, it will be concerned that a significant slowdown in demand could be around the corner. With that in mind, it is difficult to see a scenario in which it will vote to raise output, given that based on our survey, production is rising slightly regardless."

Apart from a small dip in Iranian production, the only significant decline came from Iraq. Iraqi exports had been boosted in July by the first liftings from Turkish Mediterranean port Ceyhan since January. There were no exports from Ceyhan in August, leaving Iraq to rely solely on its southern terminals. State oil marketer SOMO will sell 5 million barrels from Ceyhan in September, however, having built up stocks at the port.

Iraq, struggling to rebuild its oil industry after years of United Nations sanctions and a US-led war in 2003, does not participate in OPEC output pacts. Angola, which became a member in January this year, has yet to join the quota system.

Table in original article

OPEC oil output to rise in July

OPEC oil output to rise in July:
Petrologistics
Jul 25, 2007

OPEC oil output is expected to rise this month due to higher supply from members including Nigeria, Iraq and Angola, a consultant said on Wednesday.

OPEC's 10 members subject to output limits, all except Iraq and Angola, are expected to pump 26.9 million bpd, up from 26.8 million bpd in June, said Conrad Gerber, head of Petrologistics, which tracks tanker shipments.

The estimate, while showing rising supply in some OPEC countries, indicates top world exporter Saudi Arabia is keeping a cap on output in spite of a jump in oil prices towards a record high above $78 a barrel.

"There's no major opening of the taps," Gerber said. "They fear that if they opened the taps, prices would slide."

Nigeria is raising supply in July by about 100,000 bpd to 2.12 million bpd, Gerber said. The increase reflects fewer disruptions to the country's oil industry from militant attacks in the Niger Delta.

Iranian oil output is also on the increase -- climbing by 50,000 bpd to 3.95 million bpd, according to the Geneva-based company.

Overall supply from the 12-member Organization of the Petroleum Exporting Countries is set to rise 300,000 bpd to 30.7 million bpd, Petrologistics said, as Iraq and Angola pump more.

Iraqi output is on course to reach 2.08 million bpd, up from 1.94 million bpd in June, because the country is exporting some Kirkuk crude from its northern fields.

Storage tanks at the Turkish port of Ceyhan receive sporadic deliveries of Kirkuk by pipeline from Iraq's northern oilfields. Iraq sold 3 million barrels for shipment in July, the first such sale since January.

Angolan output, rising steadily as new fields off the country's coast come on stream, is on course to climb by 30,000 bpd to 1.69 million bpd in July.

By contrast, output in Saudi Arabia, OPEC's largest producer, is expected to hold steady at 8.6 million bpd, Petrologistics said.

OPEC, source of more than a third of the world's oil, agreed to curb supply by 1.7 million bpd, or about six percent, last year in two steps. The second stage took effect from February 1.

Despite July's rise from the 10 members party to the output curbs, output remains lower than when OPEC started cutting production in November. OPEC said the 10 were pumping 27.5 million bpd before the cutbacks began.

The exporter group is next scheduled to met in September to decide production policy.

Crude Oil Rises to 11-Month High

Crude Oil Rises to 11-Month High as North Sea Production Drops
By Mark Shenk
July 13 (Bloomberg)

Crude oil rose to an 11-month high in New York and London after a pipeline shutdown and maintenance work reduced North Sea Brent oil production.

Chevron Corp. and ConocoPhillips said they lost output from North Sea fields that produce oil and gas after BP Plc closed the pipeline. BG Group Plc said its Armada oil field in the North Sea has been shut for maintenance since June. The International Energy Agency said in a report today that global oil demand will rise 2.5 percent next year.

``Obviously, Brent is the leader,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``It looks like 150,000 barrels a day are being lost because of the pipeline problems in the North Sea, which is giving Brent a boost.''

Crude oil for August delivery rose $1.43, or 2 percent, to settle at $73.93 a barrel at 2:50 p.m. on the New York Mercantile Exchange. It was the highest close since Aug. 11 and the biggest one-day gain since June 14. Oil rose 1.5 percent this week.

New York crude is down 3.6 percent from a year ago, when prices were approaching a record $78.40 a barrel reached July 14, 2006, on concern fighting in Lebanon between Israel and Islamic militia Hezbollah would spread through the Middle East.

``This is largely a technical move,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``We're headed for the $75 to $77.50 area where there is a lot of resistance. If we can breach that level there will be an assault on the old high of $78.40.''

Brent Crude Oil

Brent crude oil for August settlement increased $1.17, or 1.5 percent, to close at $77.57 barrel on the London-based ICE Futures exchange. It was the highest settlement price since Aug. 7, when prices closed at a record $78.30.

World oil demand will rise 1.8 percent this year, according to the IEA. Demand next year will be led by accelerating consumption growth in China and the Middle East. The agency lowered its 2007 demand estimate by 100,000 barrels a day since its previous report a month ago. The Paris-based agency is an energy adviser to 26 industrialized countries.

``The IEA is looking for strong growth next year,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``They revised some recent demand estimates lower but not by enough to excite anyone.''

Iranian Inspection

Iran will allow United Nations inspectors to visit a reactor under construction that could produce plutonium, the UN's International Atomic Energy Agency said today. The agreement came during discussions this week in Tehran between Ali Larijani, the country's security chief, and Olli Heinonen, the nuclear agency's deputy director-general.

Iran, which holds the world's second-largest oil and natural gas reserves, says it wants to enrich uranium for use in nuclear power plants to produce electricity. The U.S. says Iran seeks instead to develop an atomic bomb. The dispute has bolstered oil prices since January 2006 because of concern that oil shipments from the country might be cut.

``Iran has recently been off the radar but if the inspections go well we may see prices retreat below $70,'' Lynch said.

Crude oil prices have also risen on concern that shipments from Nigeria and Iraq have been disrupted because of attacks on facilities. Venezuelan production has slipped as the country nationalized heavy oil production ventures this year.

``I am surprised by today's movement because today's news from Iran is the most positive we've seen in years,'' Beutel said. ``The situation in Nigeria is still a major concern, the Venezuelan saga continues and now there's even trouble in Ecuador.''

Energy guru: $4 per gallon gas still likely

Energy guru: $4 per gallon gas still likely
Morris Beschloss
Special to The Desert Sun
July 5, 2007

...
An exclusive interview with one of America's leading energy gurus, Phil Flynn, in Chicago last week disclosed the hard facts U.S. oil producers and consumers will be facing this year.
Flynn is vice president of marketing for Alaron, a major energy trading firm.

He has become the "go-to man" on many major networks, including CNBC, MSNBC, Fox and CNN, and the Wall Street Journal and New York Times. I had the privilege of serving with him on an economics TV panel in Chicago prior to settling in the desert permanently a few years ago.

Flynn has been remarkably accurate in forecasting the pricing movements of crude oil and gasoline in the past few years and the reason for their volatility.

His predictions have been so uncanny that he has been approached by major publishers to write a book on the world's worsening energy crisis.

In our dialogue, Flynn blamed the ongoing gasoline and crude oil availability pressure on the following major factors:

U.S. refinery shortages and maintenance problems, which are due to get worse as the year progresses.

OPEC's desire to restrict shipments on what they know is a vanishing resource. The Middle East oil monopoly also is adamant in squeezing the top prices out of its oil availability, realizing that alternative energy sources eventually will cut into crude oil demand.

Saudi Arabia, the only remaining "swing" producer, conceivably could be losing production in one or more of its five major oil fields at this time.


Although crude oil touched $70 per barrel late last week, Flynn believes it should be priced even higher since West Texas Intermediate, which is quoted on the New York Mercantile Exchange, has faced increasing refining blockage. The refinery bottlenecks have caused a crude inventory backup in Cushing, Okla., the nation's main storage area.

As refinery capacity utilization is climbing to the 90 percent plus level, U.S. crude prices will rise to the mid $70 range, while London-traded Brent crude will lag by $2 to $4, the reverse of today's circumstances.

Because the latter is more difficult to refine due to its OPEC-based heavy sulfur content, it will revert back to its historically cheaper price structures.

Flynn attributes California's high prices at the pump to the state's multi-faceted blends, the state's inability to import from elsewhere and the unexpected consumer demand increase this year.

He cites the recent $4 per gallon prices in Chicago to the production breakdown of the major Whiting, Ind., refinery, and the confiscatory Illinois state taxes.

He invites consumers to check the high taxes that federal and state governments charge in these areas to ascertain what gas at the pump really costs.

Flynn believes that the present ethanol approach is an unmitigated disaster.

"Without the 51 cent subsidy," he exclaims, "this unproven energy alternative would be out of business."

Flynn considers Congress' anti-gouging legislation political grandstanding.

Although no apologist for the Big Five multinationals, he believes these major global oil and natural gas producers are beset by government restrictions, political propaganda and an inability to project their strategies through effective communications.

Flynn believes that these international monoliths are less likely to expand refining capacity as government is calling for less gasoline through mandated ethanol blends in future years.

He believes the world's geopolitical situation is getting increasingly dangerous, as the natural resource heavy nations are gaining the upper hand.

Flynn cites Vladimir Putin's Russia, Hugo Chavez's Venezuela and Mahmoud Ahmadinejad's Iran as the new "axis of oil and natural gas evil."

This is not only due to OPEC's price rigging but the loss of technological skills as engineers, geologists and other experts flee these increasingly authoritarian countries.

Even though major new oil fields are being located, Flynn says, the costs of extraction are so prohibitive that countries like Mexico financially are not capable of exploiting them.

By precluding foreign investment in their energy industry, these countries are shutting out the necessary expertise and financing.

Putting his superior forecasting record on the line, Flynn believes that crude oil will reach $75 per barrel this summer and break last year's $78 record if the hurricane season becomes increasingly active.

He adds that "if the geopolitical situation deteriorates," the $85 per barrel mark is a distinct possibility later this year.

With crude oil comprising at least 50 percent of gasoline costs, $4 per gallon at the pump won't be far behind.

"And if the ethanol scam reaches anywhere near its destructive possibilities, look for gasoline to become increasingly expensive," he adds.

When asked what all this would mean to corn-based products in America, Flynn stipulated that such inflationary impact on consumer products would be harshly felt as the year progresses.

With worldwide demand of oil at an all-time high of 86 million barrels a day, according to the International Energy Agency, Flynn concludes that the supply/demand squeeze practically will eliminate the thin margin between production and usage that now exists.

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/

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.

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.

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.

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.

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.

Best Gonu Photo Oman Muscat Cyclone

Best Gonu Photo Oman Muscat Cyclone
Latest Update 11 am Gulf time Sunday





Click Here for link to high resolution version

Latest update on Gonu

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.

http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=690&tstamp=200706

Weather Underground has best satellite imagery and graphics
http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=690&tstamp=200706

Also try
www.accuweather.com

www.weather.com

Russian Exports

Russian exports from IEA OMR May 2007 - page 25

Oil Execs see trend of declining reserves

60 percent of oil and gas execs believe trend of declining reserves is irreversible
May 11, 2007
PRNewswire

Oil and Gas Executives say government involvement in supporting the development of renewable energy sources is necessary to alleviate the problem of declining oil reserves, according to the results of a survey conducted by KPMG LLP, the audit, tax and advisory firm.

In the KPMG survey, which polled 553 financial executives from oil and gas companies in April 2007, twenty-five percent of the respondents said that at least 75 percent of government funding into energy should be directed at the renewable sources sector and a further 44 percent said that at least 50 percent of funding should be allocated in the same way. These feelings stem from the overwhelming majority, or 82 percent, citing declining oil reserves as a concern.

"These executives are deeply concerned about declining oil reserves, a situation they see as irreversible and worsening," said Bill Kimble, National Line of Business Leader, Industrial Markets for KPMG LLP. "They see renewable energy sources as a lifeline but our survey shows that the execs recognize they cannot count on them as a solution in the short-term. Consequently, oil and gas companies are sending a clear signal to the government that intervention is needed."

While oil and gas executives are keen to see renewable energy sources becoming a mass produced reality, 60 percent say that will not be possible by 2010. Of those that believe it will, 18 percent say ethanol is the most viable for mass production by then, 13 percent say biodiesel and only 3 percent say cellulosic ethanol.

Sixty percent of the executives believe that the trend of declining oil reserves is irreversible. And, when asked about the impact of emerging markets, such as China, will have on declining oil reserves, almost 70 percent of the executives said that it would lead the situation to worsen.

The executives also clearly see that there are steps that individuals can take to alleviate the issue of declining oil reserves.

"One-third of oil and gas executives questioned said that the next time they are purchasing a family car they would consider one that consumes less gasoline, such as a hybrid," said Kimble. "They clearly see demand-side as part of the solution to declining oil reserves."

When executives were asked about their upstream capital spending in the 2006 survey, the majority indicated that investment will be a factor in helping them manage declining oil reserves. Sixty-nine percent said that it would increase by more than 10 percent, a jump of 49 percent over 2005. The 2007 survey suggests that increases in spending are flattening, with 35 percent saying they expect and increase of more than 10 percent, 19 percent saying they expect an increase of up to ten percent, and 38 percent say it will stay the same. Only seven percent expect to see a decrease.

Mergers and acquisitions continue to be a trend, with 24 percent of the executives saying that they expect their company to be involved in one in the next year - a three percent increase over last year's survey. Sixty eight percent of respondents expect private equity to play a larger role over the next year than it has in previous years.

As financial executives, the respondents put a great deal of their focus on the risks facing their companies. Forty-four percent say that the biggest risk facing their company at this time is financial; such as satisfying news regulatory requirements and shareholder demands. The next biggest risks cited, at nine percent each, were "political unrest in certain countries in which your company has operations" and "insufficient access to drilling rigs".

China’s Oil Tanker Boom

Lee Geng
Apr. 09, 2007
EnergyTribune.com

During the Ming Dynasty six hundred years ago,famed Chinesenavigator Zhengexplored the seas with his mighty fleet. Today, China is a manufacturing power, not a naval one. And that bothers the Chinese government. With oil imports of about 2.7 million barrels per day (nearly half of its total consumption), the government wants to double its fleet of supertankers by 2008.

At present, Chinese tankers only transport about 10 percent of the country’s oil imports. The government wants to increase that percentage to help ease concerns over energy security, avoid the possibility of shortages, and perhaps avert political frictions that could lead to delays or blocks on deliveries.

China currently has 23 300,000-deadweight tonnage (dwt) tankers, known as very large crude carriers, or VLCCs. Those VLCCs account for about 30 percent of China’s tanker tonnage and about 4 percent of the world’s fleet.

Most of the remaining tankers in China’s inventory are small and/or old, and thus better suited for the coastal trade than for international oil shipments. Chinese tankers on average are 30 percent older than their international counterparts and much smaller, averaging only 20,000 dwt (about one-fifteenth the size of a VLCC).

By 2010, China wants to have a VLCC fleet capable of shipping over 50 percent of its expected 4 million barrels per day of imports. By 2020, China plans a fleet of 70 VLCCs. Big Chinese shipping corporations are ordering VLCCs to achieve that target. China Merchants Group, with the country’s largest VLCC fleet, will add six before 2008, with China Ocean Shipping Corp. (COSCO) adding five. State-owned China Shipping Group (CSG) is operating three VLCCs and nine are on order for a total of 12 by 2010. This will allow it to boost its total annual capacity to over 100 million tons of oil.

COSCO operates eight VLCCs and has another seven under construction. One of China’s largest shipyards, Dalian Shipbuilding Industry Co., Ltd., has received more than 20 orders from both domestic and foreign companies for VLCCs, scheduled for delivery around 2009. Other players in the tanker business are ordering new vessels as well. Nanjing Tanker Corp. has plans to establish a fleet of 10 VLCCs. Hebei Ocean Shipping Co. has ordered three VLCCs and Nanjing Changjiang has ordered eight.

http://www.energytribune.com/articles.cfm?aid=445

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

List of People You Should Listen To About Oil

List of People You Should Listen To About Oil

Category 1) Best Ever

1) Daniel Yergin
2) Rockefeller

Category 2) Current Affairs

1) Matthew Simmons
2) Kenneth Deffeyes
3) T.Boone Pickens
4) Tertzakian
5) Naimi
6) Michael Lynch

Category 2 - "B" List)

1) Chris Skrebowski
2) Rembrandt Koppelar


Category 3) Authors

1) Crude Oil
2) Oil
3) Roberts
4) The Color of Oil
5)
6)
7)
8)
9)
10) Oil on the Brain

Cat 4) Bloggers

1)
2)
3)
4)
5)
6)
7)
8)
9)
10)

Cat 5) "Industry"

1) CERA/IHS
2) Halliburton
3) Aramco/Bush-Cheney(Abdullah)
4) SAIC

What will OPEC do?

From Rigzone article :

OPEC members "have already reached their goal of wiping out a large part of excess inventories and stabilizing prices," said Vera de Ladoucette, director of Middle East Research at Cambridge Energy Research Associates in Paris.

A senior OPEC official said ministers will review the latest demand, supply and inventory data -- including a monthly oil market report due to be published today by the Paris-based International Energy Agency, the industrialized world's energy watchdog. "It looks like there will be no change" in output policy at this week's meeting, this official said. The official cautioned against ruling out a surprise decision, if fresh data suggest a need to cut.

Analysts reckon OPEC's ministers are likely to wait until oil-inventory data for the first few months of this year are published in coming months to confirm what the industry suspects -- that inventories are close to becoming so lean that the market is prone to a renewed price surge. OPEC members have relished the four-year boom in crude revenue, which has put hundreds of billions of extra dollars in their coffers, but they are anxious to avoid a recession-inducing price climb