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Oil product stocks hit near six-month low

Inventories of oil products at Fujairah on the UAE's East Coast have fallen to their lowest in almost six months, led by the biggest drop in heavy distillates in almost two years as bunker fuel prices flipped to a premium over Singapore.

Total stockpiles stood at 21.422 million barrels as of Sept. 21, down 7.8% week on week and the lowest since March 23, data shared on Sept. 23 by the Fujairah Oil Industry Zone showed. Inventories of heavy distillates, which include marine bunkers and power fuel, tumbled 20%, the biggest drop since Nov. 26, 2018, to 10.058 million barrels, the lowest since Aug. 19, 2019. S&P Global Platts obtains the inventory data exclusively.
Fujairah 0.5%S sulfur bunker fuel was at a premium to Singapore on Sept. 21 for the first time since May 26, with the assessment at $333/mt against $329/mt in Singapore, according to Platts data. Demand for bunker fuel from oil tankers may be getting a boost from increased crude availability while the list of suppliers in Fujairah has shrunk, according to Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai.
"The UAE was exporting more crude than they usually do and this is the time of year when crude demand is usually higher in preparation for winter heating oil demand," Mali said. "Two suppliers left the Fujairah bunker market, which has reduced the competition."
Ships needing prompt spot bunker fuel from Fujairah will likely pay a premium until the end of September, because of tight availability of barges until then, sources told Platts previously. Fuel oil exports from Fujairah last week averaged 215,000 b/d, with shipments to Malaysia, Pakistan and Sudan, according to data analytics firm Kpler.
Heavy distillates stocks are now lower than at the end of 2019, while middle distillates such as jet fuel and diesel are 26% higher and light distillates such as gasoline are naphtha have ballooned 40% so far.
Stockpiles of middle distillates jumped 24% in the latest week to 4.706 million barrels, the highest since June 22. Stocks of light distillates slipped 3% to 6.658 million barrels.
Source: SP Global
Libya eyes 260,000 b/d as Opec+ keeps watch

Libya's state-owned NOC said it expects the country's oil production to reach 260,000 b/d next week as onshore fields that have been shut in for several months gradually resume operations.
NOC subsidiaries Sirte Oil, Agoco and Mellitah Oil and Gas began restarting some of their fields in the last few days, after a deal was struck last week between Khalifa Haftar's Libyan National Army (LNA) and the rival UN-backed Government of National Accord (GNA). NOC also removed force majeure restrictions from the Zueitina terminal today and instructed Zueitina Oil to resume production that feeds the port. The Zueitina terminal typically ships out Bu Attifel crude and volumes of the smaller Zueitina grade.
Port and field blockades imposed by LNA allies have severely constrained Libyan oil production and exports since January, with the offshore Bouri and Al Jurf fields the country's only consistent source of crude supplies during that time. Argus estimates that Libyan crude output was just 90,000 b/d last month. It is not clear if NOC's 260,000 b/d figure includes condensate production from the onshore Wafa field, which has continued to flow since January and which NOC has sometimes put in previous production tallies. Further increases in Libyan output could be stifled by continuing political disputes, security concerns and the spread of Covid-19.
In terms of exports, NOC said it intends to resume activity at the Marsa el-Hariga and Marsa el-Brega ports in eastern Libya as a first step. The company, which ended eight months of intermittent force majeure restrictions at "secure" ports on 19 September, said it hopes to resume activity at all of its ports in the second phase of the restart, although it has previously warned about dangers to staff and the risks of stored flammable supplies at the Ras Lanuf and Es Sider ports, where Russian paramilitary group Wagner and Sudanese Janjaweed forces remain. Both factions are affiliated with the LNA.
NOC said it will ship stored crude to terminal tanks within the next few days. Shipping sources indicate that Ras Lanuf has roughly 1.4mn bl of crude in tanks, while Zueitina has 5,000 bl on site and Es Sider has 2,000 bl. Some stored crude and condensate was exported from Marsa el-Brega earlier this month. The LNA agreed to permit the shipments in order to free up storage and allow NOC to maintain associated gas production to alleviate nationwide power outages. Meanwhile, the Unipec-chartered Marlin Shikoku is due to export the first crude cargo from Marsa el-Hariga since January on 24-27 September.
Source: Argus
Indian Oil Corp reviews refinery expansion plans

Indian Oil Corp (IOC), the country's largest refiner, is reviewing its refinery expansion plans because of a gradual rise in use of cleaner fuels and changing demand patterns in Asia's third-largest economy, its chairman said.

In 2018 India set a target for a 77% jump in refining capacity to about 9 million barrels per day (bpd) by 2030, with IOC raising capacity to 2.6 million bpd.
However, Petroleum Planning and Analysis Cell, an oil ministry think-tank, is revising the supply and demand scenario for the country.
"Based on that study we will revise our numbers as well," IOC Chairman S.M. Vaidya told a news conference on Monday.
"Demand is not really destructive in our country. It has got deferred. Nevertheless, we are reviewing our refinery expansion plans."
Vaidya said that IOC's focus is on adding higher capacity through expansion of existing units and raising petrochemical capacity to protect margins.
"As far as grassroots projects are concerned, we are reviewing all projects," he added.
IOC will also review expansion of its Paradip refinery when the revised supply and demand figures are available, he said.
IOC's joint venture with other state refiners along with Saudi Aramco and Abu Dhabi National Oil Co to build a 1.2 million bpd refinery on India's west coast has also been held up because land has yet to acquired for the project, Vaidya said.
Indian refiners are also gearing up to supply advanced, lower-emission fuels as well as battery swapping facilities, electric vehicle charging points, biodiesel and compressed biogas at their fuel stations.
Fuel demand in India has recovered in the first two weeks of this month, with IOC selling 1% more gasoline than a year earlier while diesel remained down by about 9%, Vaidya said, adding that demand could reach pre-covid levels within a quarter if the current trend continues.
IOC's refinery run rate has improved "marginally" this month from an average 70-75% in April-August, he added.
Source: Zawya
Libya NOC lifts force majeure at Zueitina oil terminal

Libya's National Oil Corporation (NOC) said on Tuesday it was lifting force majeure at the eastern Zueitina oil port after conducting security assessments at the terminal and connected fields.

The NOC has also allowed a resumption of operations at Hariga and Brega terminals following an eight-month blockade of most of Libya's oil facilities.
The state-run producer said in a statement it was evaluating the situation at other ports and fields.
Source: Zawya
Iraq tops India July crude supplies

Iraq was India's top crude supplier in July, accounting for 20pc of the country's total crude imports of 3.89mn b/d followed by Saudi Arabia with 16pc.

Iraq's share fell by less than a percentage point from a year earlier, while Saudi Arabia's share dropped by seven percentage points because of its more expensive supplies.
Iraq supplied 796,000 b/d in July compared with 786,000 b/d a year earlier, while Saudi Arabia shipped 640,000 b/d from 856,000 b/d a year earlier, according to latest customs data that uses landed and cleared cargo arrivals. This compared with an average 824,000 b/d shipped by Iraq in the April-June quarter and 696,000 b/d by Saudi Arabia.
The UAE was India's third-largest crude supplier in July at 563,000 b/d compared with 250,000 b/d a year earlier and 327,000 b/d during April-June. US supplies saw the largest gains in July, eating into India's traditional Middle East suppliers. The US was the fourth-largest supplier at 411,000 b/d in July from just 52,000 b/d a year earlier and from 183,000 b/d for April-June.
Russian supplies rose to 125,000 b/d in July from 84,000 b/d a year earlier and from 55,000 b/d during April-June.
Venezuelan imports dropped to zero from 253,000 b/d a year earlier after Indian private-sector refiner Reliance Industries and Russian-controlled Rosneft's Nayara Energy stopped accepting Venezuelan oil in deference to US sanctions. It had supplied 98,000 b/d during April-June.
Supplies from Nigeria, a supplier of sweet grades, plunged to 180,000 b/d from 331,000 b/d a year earlier and 273,000 b/d in April-June.
Source: Argus
Nakilat transitions LNG Al Rekayyat to in-house management

Nakilat has assumed full ship management and operations of Q-Flex LNG carrier Al Rekayyat from Shell International Trading and Shipping Company Limited (Shell) with effect from 20 September 2020, as part of the second phase of its planned fleet management transition programme.

With a cargo carrying capacity of 216,300 cubic meters, Al Rekayyat is wholly-owned by Nakilat and chartered by Qatargas. The vessel built in South Korea by Hyundai Heavy Industries was delivered in June 2009 and has been in service ever since.
Al Rekayyat is the sixth vessel that will come under the management of Nakilat Shipping Qatar Ltd. (NSQL) this year, bringing the total number of vessels managed by NSQL to 25, comprising of 21 LNG and 4 LPG carriers.
Source: Hellenic Shipping
India refinery runs fall in August

Indian refinery throughput dropped last month as localised Covid-19 lockdowns eroded fuel demand and maintenance was carried out at two key refineries.

Crude runs declined to 3.8mn b/d in August, from 4.18mn b/d in July and 5.2mn b/d in August 2019, according to preliminary oil ministry data. High-sulphur grades made up 72.5pc of the crude intake last month, compared with 75.1pc a year earlier.
India's state-controlled refineries, including those run as joint ventures, processed 2.4mn b/d of crude last month, compared with 2.8mn b/d in July and 3.35mn b/d in August 2019. Runs were constrained by a shutdown at IOC's 300,000 b/d Paradip refinery on the east coast. IOC said it plans to boost its utilisation rate if the recovery in fuel demand seen this month continues.
Meanwhile, India's private-sector refineries reduced crude throughput to around 1.4mn b/d last month from 1.84mn b/d a year earlier, driven by a shutdown at Reliance Industries' (RIL) 704,000 b/d export-oriented facility at the 1.36mn b/d Jamnagar refinery complex on the west coast. RIL processed a total of 1.04mn b/d at Jamnagar last month, up from 1mn b/d in July but down from 1.42mn b/d a year earlier. Nayara Energy, which is owned by Russia's state-controlled Rosneft, processed around 355,000 b/d at the 400,000 b/d Vadinar refinery in western India last month, compared with 378,000 b/d in July and 426,000 b/d a year earlier.
India's six-month long nationwide lockdown is due to end on 30 September but a sharp rise in daily coronavirus cases has led to several localised lockdowns. India has recorded almost 5.5mn Covid-19 cases, the second-highest behind the US.
India imported 3.6mn b/d of crude last month, 700,000 b/d higher than in July but 23pc lower than in August last year, according to the preliminary oil ministry data.
Source: Argus
Exports from main Nigerian crude grades to rise in November

Total exports of Nigeria's four main crude oil grades are set to rise in November to 787,000 barrels per day (bpd) from 736,000 bpd planned for October, according to preliminary loading programmes seen by traders.

Source: Zawya
Angola to export 37 cargoes of crude in November

Angola will export at least 37 cargoes of crude oil in November, down from 40 cargoes planned for October, a prelimary programme showed.

Extra cargoes are typically added to the final programme.
Source: Hellenic Shipping
ngola to export 37 cargoes of crude in November

Angola will export at least 37 cargoes of crude oil in November, down from 40 cargoes planned for October, a prelimary programme showed.

Extra cargoes are typically added to the final programme.
Source: Hellenic Shipping
Libya set for crude exports as fields restart

Libya is poised to export a crude cargo from the Marsa el-Hariga port in the east of the country by the end of September, which would mark the first shipment from the terminal in eight months. It comes as some of Libya's onshore oil fields slowly resume production.
The Marlin Shikoku will load 1mn bl of Sarir/Mesla crude from Marsa el-Hariga on 24-27 September, according to shipping sources and Vortexa data. The cargo will likely come from storage, and its destination is not yet known.
China's Unipec will load the cargo, according to shipping and trading sources. Unipec was one of only two companies that loaded Mesla/Sarir crude last year, and had been set to remain the main term buyer of the grade this year.
No crude has been exported from Marsa el-Hariga since January, according to Argus tracking data. The port — along with all other oil terminals in eastern Libya as well as onshore crude fields in the west of the country — has been intermittently blockaded by allies of Khalifa Haftar's Libyan National Army (LNA) for the past eight months. During that time, Libyan crude exports have been mainly confined to shipments from the offshore Bouri and Al Jurf fields.
A new deal to resume oil production and exports was struck last week between the LNA and the rival UN-backed Government of National Accord (GNA). State-owned NOC subsequently agreed to restart activity at "safe" ports and fields where mercenaries are not present. The LNA-allied Russian military group Wagner and Sudanese Janjaweed forces have gathered around the Es Sider and Ras Lanuf terminals in recent weeks.
Shipping sources said at the weekend that Marsa el-Hariga and Zueitina are likely to be among the first ports to restart. The port of Marsa el-Brega was allowed to export cargoes of stored crude and condensate in early September, suggesting that it too could be deemed secure.
NOC subsidiary Agoco — operator of the Sarir, Mesla, al-Bayda, Nafoora and Hamada fields, which can produce as much as 300,000 b/d between them — said on 19 September that it is preparing to restart production. The Mesla field was online and producing roughly 30,000 b/d between 30 June and 3 September, but those supplies were earmarked for domestic refinery use. Output from Mesla was interrupted at the start of this month because of Covid-19 precautionary measures. Agoco has stressed the need for staff to abide by Covid-19 measures as output restarts.
Mellitah Oil and Gas, a joint venture between NOC and Italy's Eni, has resumed production at the al-Bury field, which was producing around 1,000 b/d before the blockades, and Sirte Oil has restarted the 30,000 b/d capacity Zelten field. Current production rates from the two fields is not clear.
While last week's agreement between the LNA and GNA has rekindled some of Libya's onshore crude production, the deal's long-term survival remains uncertain. The agreement was negotiated by Khalifa Haftar himself and GNA deputy prime minister Ahmed Maiteeq, but it has yet to be endorsed by GNA prime minister Fayez al-Sarraj — who said last week that he intends to resign by the end of October — or by Libya's House of Representatives, the country's legislative body.
Source: Argus
ADNOC partners with Mubadala, ENEC to drive In-Country Value for UAE

The Abu Dhabi National Oil Company, ADNOC, today signed two framework agreements with Mubadala Investment Company and Emirates Nuclear Energy Corporation, ENEC, to partner on ADNOC’s In-Country Value, ICV, programme following the success of the programme which has driven more than AED44 billion ($12 billion) back into the UAE's economy and created over 1,500 private-sector jobs for Emiratis since it was launched in January 2018.

The partnership brings together three of the UAE’s leading companies to cooperate in further driving ICV for the country. It expands the number of entities that ADNOC has partnered with to adopt its ICV programme following similar agreements with the Abu Dhabi Department for Economic Development, Abu Dhabi Ports, and Aldar Properties.
These framework agreements also reinforce the commitment of ADNOC, Mubadala, and ENEC to enabling the growth and diversification of the UAE’s economy.
Under the terms of the agreements, ADNOC, Mubadala, and ENEC will explore potential opportunities for collaboration in creating additional skilled employment opportunities for Emiratis in the private sector and sourcing goods and services within the UAE.
In addition, the agreements will see ADNOC and both companies explore the potential for further localizing strategically critical parts of their value chain, which they have been driving in recent years and particularly as they respond to COVID-19.
Source: Zawya
Saudi gasoline stocks fall to multi-year lows

Saudi Arabia's gasoline stocks fell to a more than a six-year low in July as a push to keep refinery run rates low coincided with an upswing in domestic gasoline demand with the easing of Covid-19-related restrictions on movement.

Gasoline demand was up 13pc to 475,000 b/d in July, from 421,000 b/d in June, according to latest data from the Joint Organisations Data Initiative (Jodi). But this was still well down on the 2019 average of 550,000 b/d.
The uptick in demand came as economic activity continued to rise following the end of all Covid-19-related restrictions on economic and commercial activities in mid-June.
But gasoline inventories fell to a little above 25mn bl in July - its lowest level for more than six years. This is down 28pc versus 34.94mn bl in the corresponding month last year. Gasoline stocks were last lower in May 2014 at 24.86mn bl.
Total refinery output in July of all refined products, excluding LPG, meanwhile, stood at around 2mn b/d, according to Jodi data. While this was up 7,000 b/d from June, it was still down by around 17pc year-on-year, as the country worked to balance a growing middle distillate surplus. Jet fuel production, in particular, was hit, coming in at 45pc below year-ago levels.
This is because local refiners were forced to adjust their jet fuel yields amid weak jet fuel demand due to Covid-19. International flights to and from Saudi Arabia have been suspended since mid-March, with domestic flights only returning at the end of May following a more than two month hiatus.
Moreover, stocking jet fuel at this time proved uneconomic, again pushing refiners to reduce refinery runs. But as demand for other products - particularly gasoline - began to recover, refiners were forced to rely on stock draws to meet domestic requirements.
Inventories of middle distillates in July slipped 4pc to 46.28mn bl from 48.08mn bl one year earlier, with jet fuel stocks falling by 10pc over the same period. Jet fuel demand was up to 39,000 b/d in July versus 32,000 b/d, but still well down on the 2019 average of 103,000 b/d.
But domestic demand for jet fuel is likely to continue rising through the end of the year, following the restart of what Saudi Arabia described as "exceptional" flights in and out of the country on 15 September. Saudi Arabia said it expects to fully lift all its international travel restrictions in the new year.
Gasoil demand, meanwhile, rose to a nine-month high in July at 540,000 b/d as rising temperatures in the region drove an increase in the demand for power generation.
Source: Argus
Libya NOC lifts force majeure from ‘safe’ fields, ports

Libya's state-owned NOC said it has lifted force majeure measures from "safe" fields and oil terminals but will retain these restrictions for assets still allegedly infiltrated by foreign mercenaries and Russian paramilitary group Wagner.

NOC chairman Mustafa Sanalla said the company's priority is now to resume production and exports, while accounting for worker and operational safety, and preventing attempts to "politicize the national oil sector."
The company is conducting a technical evaluation to prepare for the restart of oil activities. It did not name the assets it would be targeting to return on line. But a Libyan shipping source said the Marsa el-Hariga and Zueitina terminals would likely be among the first ones restarted because of the lower mercenary presence.
Since January, all onshore Libyan crude oil fields and terminals have been intermittently blockaded by forces allied with Khalifa Haftar's Libyan National Army (LNA) — comprising the Petroleum Facilities Guard (PFG) units that previously guarded these assets, the Wagner group, Sudanese Janjaweed mercenaries and Libyan tribes. Foreign mercenaries remain posted at the Ras Lanuf and Es Sider ports, as of this week.
On 18 September, the LNA announced it reached an agreement to restart oil production and exports immediately with the rival UN-backed Government of National Accord (GNA), which Haftar's forces have battled for nationwide control since April of last year. On the GNA side, the accord was brokered and represented by deputy prime minister Ahmed Maiteeq, who represents the north western city of Misrata — leaving it unclear if further deal endorsement was required from other GNA parties. The deal duration was also not immediately apparent.
The Russian Foreign Ministry — which has backed Haftar in the civil conflict held Libya-linked talks with GNA ally Turkey in recent days — on 19 September said it welcomed the agreement. Last week, the US Embassy to Libya had foreshadowed the deal, announcing that Haftar had agreed to reopen the oil sector by the end of 12 September — a few days earlier than the LNA was able to achieve.
Libyan exports volumes are likely to become available to the market immediately. NOC has said that it retains "hundreds of thousands of tonnes of hydrocarbons" in storage. In mid-August, the LNA allowed a restart of shipments of stored supplies from eastern ports, in an effort to free up stocks that will allow NOC to continue gas production and alleviate intensifying national power outages. The Marsa el-Brega port conducted exports of stored crude and condensate at the start of September.
Field production may lag, with NOC previously warning that the extended duration of the blockades had damaged pipelines and other infrastructure, which would slow down eventual output recoveries.
Source: Argus
Agreement reached to lift Libyan oil blockade

The Libyan National Army (LNA) said it has reached an agreement with the rival Government of National Accord (GNA) and tribal factions to resume Libyan crude output after an eight-month blockade.

It remains to be seen whether Libya's state-owned NOC will restart production following this development, and it was not immediately clear if the LNA and GNA had agreed a finite or indefinite restart. Overnight, NOC said that the presence of foreign mercenaries at its oil assets prevented it from safely removing force majeure (FM) restrictions at this time.
The company has yet to comment since the LNA statement.
The US embassy to Libya had heralded the potential agreement over the weekend, saying Haftar had agreed to lift the oil blockades by 12 September. Libyan crude exports and fresh production have yet to resume, as of today. The latest agreement — notably brokered by Maiteeq on behalf of the GNA — comes after the Tripoli administration leader, Fayez al-Sarraj, said he intends to resign by the end of October.
Since mid-August, the LNA has allowed eastern ports to resume exports, limiting this concession to already stored crude and condensate. This frees up tanks, allowing NOC to continue associated gas production and alleviate some of the power outages.
Source: Argus
India oil product demand shows recovery in September

India's sales of diesel in the first half of September rose from the same period a month earlier, as monsoon rains eased and the government relaxed restrictions in the latest phase of its six-month Covid-19 lockdown ending this month. Gasoline sales also rose during the same period.
Diesel use in the first two weeks of September increased by 20pc to 1.06mn b/d from 885,000 b/d during the same period in August but declined by 6pc from 1.12mn b/d a year earlier as the economy continued to suffer from a rapid rise in Covid-19 cases in the country, according to preliminary data from state-run refiners, which account for around 90pc of India's domestic fuel sales.
India's gasoline sales in the first half of September rose to 544,000 b/d, up by 2pc from 532,000 b/d a year earlier and by 7pc from 507,000 b/d in the first half of August.
Sales of gasoline, which is increasingly being used as a substitute for diesel, are rising partly because most travel restrictions have been lifted and consumers are switching to gasoline-fuelled vehicles from diesel-powered ones.
LPG use rose by 13pc on the year in the first two weeks of September and by a similar rate on the month. Jet fuel consumption rose by 16pc on the month as domestic flights increased operations, but fell by 60pc from a year earlier.
It is unclear how fuel demand is recovering despite a contraction in India's economy. The country's economy contracted by 24pc in April-June and is forecast to shrink by around 15pc in the 12 months to the end of March 2021, according to US bank Goldman Sachs. Economists expect a contraction in the July-September quarter also. There is no independent fuel use forecast, with only government data available.
Fuel demand typically rises during the festive period of October-December, but rising Covid-19 cases count may temper consumption. India has overtaken Brazil to become the second-worst country hit by the outbreak and will exceed the US by early October at current growth rates. Cases have been rising at over 90,000/d over the past few days, a global record, and have exceeded 5.2mn.
A slowdown in overall consumer demand, fuelled by record job losses, will continue to crimp fuel use this year. Nearly 6.6mn white collar workers, including engineers and teachers, lost their jobs from May-August compared with over 18mn people employed in March, taking the country's total number of workers to the lowest level since 2016 of 12.2mn. Five million factory workers also lost their jobs during the period, according to Mumbai-based think tank the Centre for Monitoring Indian Economy.
Sales of diesel, India's most-consumed oil product, averaged 1.17mn b/d in the whole of August, down from 1.33mn b/d in July and 1.47mn b/d in August 2019, according to oil ministry data. Gasoline consumption fared slightly better, rising to 649,000 b/d in August from 616,000 b/d in July, although this was still over 50,000 b/d lower from the same period last year.
Source: Argus
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