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News09/08/24Houston-ARA B30 diff could spark Houston interestHouston-ARA B30 diff could spark Houston interestNew York, 9 August (Argus) — The Houston to Amsterdam-Rotterdam-Antwerp (ARA)B30 biodiesel for bunkering price differential is narrow enough to generatebuying interest in Houston, as environmental regulations tighten in 2025. B30biodiesel blends, comprised of 30pc cooking oil methyl ester (Ucome) and 70pcvery low-sulphur fuel oil (VLSFO), allow ship operators to lower theirgreenhouse gas (GHG) emissions and thus lower their CO2 expenses. In May andJune, Houston B30 was assessed at a $7-$17/t discount to ARA B30 (see chart). InJuly, the differential flipped to a $22/t premium, as the US Gulf Ucome pricegains outpaced northwest Europe's. But provided that the differential remainsnarrow, US Gulf coast B30 demand from ocean-going vessels could pick up nextyear, as EU-led GHG regulations tighten, a trader told Argus . EU's emissionstrading system (ETS) for marine shipping commenced this year and requires thateach ship operator pay for 40pc of the GHG generated on 50pc of each voyagestarting or ending in the EU. This applies to vessels travelling between the USand EU. In 2025, the EU ETS emissions limit will increase from 40pc to 70pc, andjump up to 100pc in 2026. Starting next year, the EU's FuelEU Maritimeregulation will require a 2pc cut in GHG intensity for bunker fuels comparedwith 2020 base year levels. FuelEU imposes a penalty of €2,400/t ($2,622/t)VLFSO energy equivalent. Similar to the EU ETS, the FuelEU regulation applies to50pc of the fuel used on voyages between the US and EU. In addition totightening EU-led regulations, US biodiesel for bunkering demand could beboosted if the US allows for subsidies for biodiesel sold to ocean-goingvessels. Currently, ocean-going ship operators cannot take advantage of the samesubsidies that are given to biodiesel blended for use for US roadtransportation. In February, a bipartisan "Renewable Fuel for Ocean-GoingVessels Act", was introduced in the US Senate, a companion to a prior billintroduced in the US House of Representatives in October 2023 . The bills havenot progressed to the Senate or the House. If they pass, Houston B30 biodieselfor bunkering would become more price competitive than ARA B30. By StefkaWechsler B30 biodiesel (Ucome + VLSFO) $/t Send comments and request moreinformation at feedback@argusmedia.com Copyright © 2024. Argus Media group . Allrights reserved.Find out more
NewsCan Opec+ afford to raise output?09/08/24News09/08/24Can Opec+ afford to raise output?The plan to begin returning oil to the market from October might need to berethought, write Aydin Calik and Nader Itayim London, 9 August (Argus) — Fallingoil prices are casting doubt on whether Opec+ members will unwind some of theirproduction cuts from October as planned. Oil prices have fallen by $8-10/bl overthe past month, leading observers to question whether the market needs moreOpec+ supply. But Opec+ delegates say it is too soon to know whether a change inproduction policy will be required. Eight Opec+ members are expected to unwind2.2mn b/d of voluntary production cuts over a 12-month period starting inOctober — as agreed in their ministerial meeting in June. This would see thecollective output target of these countries increase by a hefty 540,000 b/d bythe end of this year and another 1.92mn b/d by September 2025. But it was alwaysmade clear that the return of this supply would depend on market conditions. Adecision on whether to begin unwinding could come in early September, leavingseveral weeks for Opec+ to monitor market developments. Will markets recover bythen? The recent slide in oil prices is an overreaction to weaker-than-expectedjobs data in the US and a return to $80/bl is already under way, one Opec+delegate says. The jobs data stoked fears that the world could be headed for aUS-led global recession, prompting a sharp sell-off in commodities and globalequities. Another delegate insists that the weakening of oil prices was neitherreflective of supply and demand fundamentals nor of elevated geopolitical risks.They also say they expect prices to strengthen in the next few weeks, noting arecent rebound in financial markets. For now, there is an expectation amongdelegates that the eight Opec+ members will adhere to their plan to unwindsupply cuts, particularly given their view that oil market physical fundamentalsremain strong. But even if the expected demand surge in the second half of theyear does not materialise, any move to delay the plan might still receivepushback from some members that are eager to return output. The Opec+ deal inJune was a compromise between members that argued cuts had gone on too long andthose that stressed the need to keep production in check. But if oil pricescontinue to slide, it is possible that the group of eight will alter the plan, adelegate says. This could take the shape of a pause, as ministers havepreviously suggested, or potentially even a slowdown of the return, meaning lessoil would start to come back to the market in October than originally planned.Output at three-year low The recent slide in oil prices comes despite a seriesof output cuts by Opec+ that have removed 3.65mn b/d from the market sinceOctober 2022, Argus estimates. Production by members subject to cuts fell for afourth straight month in July as serial overproducer Kazakhstan finally madegood on its promise to reduce output. The group's production fell by 50,000 b/dto 33.89mn b/d, the lowest since May 2021 and exceedingly close to its 33.85mnb/d target. Within the group, the nine Opec members subject to cuts were 220,000b/d above their target in July, while the nine non-Opec members were 180,000 b/dbelow. Output in July could have been lower still. Iraq's production increasedby 50,000 b/d to 4.25mn b/d — 250,000 b/d above its formal output target and320,000 b/d above its effective target under its plan to compensate foroverproducing in the first half of the year. Russia — which is not due to beginits compensation cuts until October — reduced output by 30,000 b/d to 9.05mn b/dbut remained 70,000 b/d above target. Moscow blames this on "problems with thesupply schedule". Kazakhstan drove down production by 80,000 b/d to 1.46mn b/d,which was 10,000 b/d below its formal target but still 10,000 b/d above itseffective target based on its compensation plan. Opec+ crude production mn b/dJul Jun* Target† ± target Opec 9 21.45 21.38 21.23 0.22 Non-Opec 9 12.44 12.5612.62 -0.18 Total Opec 18 33.89 33.94 33.85 0.04 *revised †includes additionalcuts where applicable Opec wellhead production mn b/d Jul Jun Target† ± targetSaudi Arabia 9.00 8.95 8.98 0.02 Iraq 4.25 4.20 4.00 0.25 Kuwait 2.38 2.40 2.41-0.03 UAE 2.94 2.94 2.91 0.03 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.46 1.44 1.50-0.04 Congo (Brazzaville) 0.24 0.26 0.28 -0.04 Gabon 0.21 0.23 0.17 0.04Equatorial Guinea 0.06 0.05 0.07 -0.01 Opec 9 21.45 21.38 21.23 0.22 Iran 3.353.31 na na Libya 1.20 1.22 na na Venezuela 0.88 0.86 na na Total Opec 12^ 26.8826.77 na na †includes additional cuts where applicable ^Iran, Libya andVenezuela are exempt from production targets Non-Opec crude production mn b/dJul Jun* Target† ± target Russia 9.05 9.08 8.98 0.07 Oman 0.76 0.76 0.76 0.00Azerbaijan 0.49 0.49 0.55 -0.06 Kazakhstan 1.46 1.54 1.47 -0.01 Malaysia 0.360.36 0.40 -0.04 Bahrain 0.18 0.18 0.20 -0.02 Brunei 0.07 0.07 0.08 -0.01 Sudan0.02 0.02 0.06 -0.04 South Sudan 0.05 0.06 0.12 -0.07 Total non-Opec† 12.4412.56 12.62 -0.18 *revised †includes additional cuts where applicable Sendcomments and request more information at feedback@argusmedia.com Copyright ©2024. Argus Media group . All rights reserved.NewsIraq kicks can down the road on Opec+ compliance09/08/24News09/08/24Iraq kicks can down the road on Opec+ complianceDubai, 9 August (Argus) — Iraq exceeded its 4mn b/d Opec+ crude productiontarget again last month, cementing its position as the group's least compliantmember. Latest figures from state-owned oil marketer Somo put productionexcluding output from the semi-autonomous Kurdistan region up by 160,000 b/d onthe month at 3.99mn b/d in July. Kurdish output will have taken total productionwell above the 4mn b/d target. Argus , which will publish its July estimatelater on 9 August, put Iraq's June output at 4.2mn b/d and May's at 4.16mn b/d,including around 250,000-300,000 b/d from the Kurdistan region. Iraq has failedto meet its Opec+ target in any month this year. Along with fellow overproducersKazakhstan and Russia, the country outlined plans last month detailing how itintends to compensate. Last month's increase in production reflects higherexports, partly offset by a dip in supply to domestic refineries and lower crudeburn. Crude exports from the southern Basrah oil terminal averaged 3.486mn b/din July, a 196,000 b/d increase from 3.29mn b/d in June , according to Somo,while supplies to domestic refineries fell to 467,000 b/d last month from475,000 b/d in June. Jordan did not receive any Iraqi crude in July, accordingto Somo, but both countries recently agreed to renew a crude supply agreementunder which Baghdad will supply 15,000 b/d under preferential terms. Somo saidIraq burned 61,000 of crude for power in July. This was less than in June,largely because of the establishment of the Iraqi-Turkish electricityinterconnector, which will supply Iraq with 300MW of power during the summer."Additionally, the grid connection with Jordan, steady gas production, andimports from Iran, as mentioned in our previous reports, have helped reducereliance on crude oil," Somo said. Iraqi officials say efforts to compensate forexceeding the Opec+ target are complicated by a lack of visibility on productionin Iraqi Kurdistan. The region ceased providing output data after a pipelinedispute between Baghdad and Turkey shut in 400,000 b/d of its exports in Marchlast year. Sources at Iraq's oil ministry previously told Argus that it will beeasier to deliver compensation cuts after the summer season ends andtemperatures begin to drop. By Bachar Halabi Send comments and request moreinformation at feedback@argusmedia.com Copyright © 2024. Argus Media group . Allrights reserved.NewsUS, Qatar, Egypt call for Gaza ceasefire08/08/24News08/08/24US, Qatar, Egypt call for Gaza ceasefireWashington, 8 August (Argus) — The leaders of the US, Egypt and Qatar todaycalled on Israel and Gaza-based Hamas to resume talks next week on a ceasefireproposal presented by President Joe Biden on 31 May. The joint statement,released by the White House today, is part of efforts by the Bidenadministration to prevent a direct military confrontation between Israel andIran that threatens to involve US forces across the Middle East. "The time hascome to conclude the ceasefire and hostages and detainees release deal," thestatement said. "There is no further time to waste nor excuses from any partyfor further delay. It is time to release the hostages, begin the ceasefire, andimplement this agreement." Israel and Hamas should meet in Cairo, Egypt, orDoha, Qatar, on 15 August to finalize the agreement, the statement said. Themediators are ready to present a proposal that addresses all objections Israeland Hamas raised, the joint statement said. The White House does not expect thatthe 15 August meeting would immediately lead to a ceasefire "but we do believethat what's left here really can be bridged, and there's really just no time tolose," a senior US official said. "We're going to need some things from theIsraelis. We're going to need some things from the Hamas side." In the past sixmonths, Hamas and Israel have each raised objections over the proposedceasefire. But US officials appear to have concluded that they need to put morepressure on Israeli prime minister Benjamin Netanyahu to accept the ceasefiredeal, which involves the release of Israeli hostages captured by Hamas on 7October. Netanyahu has so far refused to publicly endorse the proposed ceasefiredeal even after being personally lobbied by Biden and vice-president KamalaHarris when he visited Washington on 22-26 August. Deadly attacks exchangedbetween Lebanon-based Hezbollah and Israel since then, as well as theassassination of Palestinian group Hamas' chief Ismail Haniyeh in Tehran on 31July, have raised fear of an escalation of the Gaza conflict. Israel has notexplicitly acknowledged its involvement in Haniyeh's death. But Iranianofficials have little doubt that Israel was behind the hit, vowing to retaliate.Biden said that killing Haniyeh "has not helped" the ceasefire efforts. The USin the past week has taken the rare step of reaching out directly to Iran tourge against an escalation. The senior US official today referenced a statementby Iran's UN mission to the UN in New York, which suggested that Tehran wouldconsider the prospective ceasefire in Gaza a mitigating factor in determininghow to respond to Haniyeh's death. "If [Iran launches] a major war in the MiddleEast with some massive attack on Israel, which they're threatening incoordination with other groups, that's obviously going to significantlyjeopardize any hope of getting a ceasefire in Gaza," the US official said. "Butwe will be prepared for any contingency, and we have moved an awful lot ofmilitary force into the region." By Haik Gugarats Send comments and request moreinformation at feedback@argusmedia.com Copyright © 2024. Argus Media group . Allrights reserved.NewsIOC Pasadena restarts after month-long closure08/08/24News08/08/24IOC Pasadena restarts after month-long closureHouston, 8 August (Argus) — Major fertilizer producer Interoceanic Corp (IOC)resumed operations nearly a month after Hurricane Beryl rolled through Texas.The plant restarted earlier this week, allowing the company to reenter theammonium sulfate market. IOC has offered limited volumes at $335/st fot StLouis, according to market participants. The Pasadena, Texas, facility had beenoff line since 8 July because of Hurricane Beryl, which damaged the facility andcaused the extended outage. IOC issued a force majeure to its partners in theweeks following the storm. By Meghan Yoyotte Send comments and request moreinformation at feedback@argusmedia.com Copyright © 2024. Argus Media group . Allrights reserved.
