US gasoline production is running near record levels

MOSCOW (MRC) -- Gasoline production by US refiners and blenders has run near record levels over the first seven months of 2017, with four-week rolling average production well above its five-year average and close to the top of its five-year range, as per Hydrocarbonprocessing.

US gasoline inventories also remain relatively high despite growing domestic and foreign demand. Growth in US gasoline production since March is the result of record-high refinery runs. For the week ending April 21, US refinery runs exceeded 17.5 MMbpd for the first time since EIA began publishing the weekly data series in 1990. Refinery runs have since exceeded this threshold eight additional times, reaching an all-time high of 17.9 MMbpd the week ending on Aug. 4. About 44% of the input to refineries is converted to motor gasoline.

Net production of finished motor gasoline, which averaged 9.3 MMbpd for the week ending Aug. 11, reflects the unadjusted refiner and blender net production of finished motor gasoline less the use of fuel ethanol in order to isolate the petroleum component. This quantity is 191,000 bpd lower than the five-year high for early August but still more than 492,000 bpd higher than the previous five-year average.

Despite historically high gasoline production levels, gasoline inventories have been declining because of above-average gasoline exports and domestic demand (EIA uses product supplied as a proxy for demand). However, gasoline inventories remain higher than the previous five-year average.

Total gasoline exports, including finished gasoline and blending components, are relatively small compared to domestic demand, averaging 761,000 bpd in 2016 compared with domestic product supplied of 9.3 MMbpd. Estimated gasoline exports have remained relatively high so far in 2017, and as of Aug. 11, were about 222,000 bpd higher than the previous five-year average.

Following a record-setting year in 2016, motor gasoline demand has remained relatively high in 2017. During the first half of the year, weekly product supplied remained lower than 2016 levels, but reached a record high of 9.84 MMbpd for the week ending July 28 before declining to 9.52 MMbpd the week ending August 11, 2017.

Crude oil prices over the past several months have been relatively stable compared with recent years. Since the first week of April, the difference between the highest and lowest prices of Brent crude oil over the previous 52 weeks has been less than USD13/bbl, the narrowest range since August 2014. Gasoline prices have also been relatively stable. As of August 7, the 52-week range for average US regular retail gasoline prices was 30 cents/gal, the narrowest 52-week range since March of 2004, with the exception of a two-week period in April when the 52-week range was one cent per gallon narrower.

EIA’s August Short-Term Energy Outlook forecasts that 2017 motor gasoline consumption will be virtually identical to 2016 levels, with product supplied expected to increase by less than 0.1%, to an average of slightly more than 9.3 MMbpd for the year. By comparison, gasoline consumption in 2016 was 1.6% higher than 2015 levels. The flat forecast for gasoline consumption reflects slower expected growth in non-farm employment and an expected increase in the retail price of gasoline. Gasoline consumption in 2018 is expected to grow by 27,000 bpd (0.3%) from its projected 2017 level.

MRC

EIA: US crude stockpiles fall the most in nearly a year

MOSCOW (MRC) — US crude oil inventories fell for the seventh consecutive week in their largest drawdown in nearly a year while exports and production continued to rise, the Energy Information Administration said on Wednesday, said Reuters.

Crude inventories fell 8.95 MMbbl in the week to Aug. 11, nearly three times analysts' expectations for a decrease of 3.1 MMbbl and the largest draw in since the week to Sept. 2. At 466.5 MMbbl, crude stockpiles were at their lowest since January 2016. Including emergency reserves, crude stocks were at 1.15 Bbbl, the lowest levels since October 2015, according to EIA data.

Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures rose 678,000 bbl, EIA said. The report also had bearish elements, as 2.5 MMbbl of the draw was on the West Coast, somewhat limiting the market impact of the drop, said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

After the data, crude futures extended gains but then turned negative, with West Texas Intermediate (WTI) crude futures fell 22 cents to $47.33 a barrel by 11:25 a.m. EDT (1525 GMT), after rising to USD47.99. Brent crude futures were unchanged at USD50.80/bbl, after trading as high as USD51.40 earlier in the session.

US refinery crude runs fell by 9,000 bpd, as utilization rates slipped by 0.2 percentage point from 12-year highs to 96.1% of total capacity, EIA data showed. Gasoline stocks were unchanged, compared with analysts' expectations in a Reuters poll for a 1.1-MMbbl drop.

Distillate stockpiles, which include diesel and heating oil, rose 702,000 bbl, versus expectations for a drop of 572,000 bbl, the EIA data showed. US crude imports rose last week by 194,000 bpd.

US crude production rose to 9.5 MMbpd from 9.4 MMbpd in the previous week. Crude oil exports also rose, jumping to 877,000 bpd from 707,000 bpd. US crude production has been closely watched by OPEC and other producers that have tried to stem a global supply glut.

The Organization of the Petroleum Exporting Countries together with non-OPEC producers including Russia have pledged to restrict output by 1.8 MMbpd between January this year and March 2018.

US output has filled part of that gap. "The rise in crude production continues to happen," said Gene McGillian, director of market research at Tradition Energy. While nearly 70 MMbbl of inventory decreases have been reported this summer, the market is waiting for a signal after the Labor Day holiday, when demand usually tapers, he said.

"If we see these draws past Labor Day, it will drive the market, possibly past USD50."
MRC

XOS launches analyzer for testing critical elements in petroleum refineries

MOSCOW (MRC) -- XOS has announced the worldwide release of Petra MAX, a new D4294 analyzer with combined analysis of 13 elements from P to Zn. Petra MAX delivers high-precision sulfur analysis in addition to rapid monitoring of critical elements like Ca, Fe, K, Ni, and V at sub-ppm levels, said Hydrocarbonprocessing.

Test methods for measuring sulfur content, like ASTM D4294 and ISO 8754, have become critical for assessing the value of crude oil, the company said in a press release. The blending of crude oils from different sources has become more commonplace within the industry to meet specifications for the classification of sweet crude oil. The introduction of new crudes brings new challenges, like higher concentrations of metals known to rapidly deactivate process catalysts in the catalytic cracker and hydrotreaters, and cause pump and exchanger fouling, and off-specification coke.

Petra MAX is powered by HDXRF, utilizing XOS patented doubly curved crystal optics coupled with a high-performance silicon drift detector and a monochromatic excitation beam. According to XOS, this technology reduces background noise and increases signal-to-noise output, enabling low detection limits and high precision without the need for consumable helium gas, a vacuum pump, or extensive sample preparation.
MRC

South Korean chemicals firm Songwon opens pilot plant in Gujarat

MOSCOW (MRC) -- South Korean specialty chemicals company Songwon Industrial Co Ltd has launched its new pilot plant in Panoli (Gujarat), thereby strengthening the organisation’s overall specialty chemicals development capability, said Business-standard.

Built on Songwon’s Indian site with all the necessary main unit operations, the new plant is equipped with the most up-to-date technologies and materials for producing a wide range of chemicals for a broad spectrum of applications - from one kilo up to several hundred kilo samples. To reinforce the organisation’s position in existing areas of business and enhance its ability to enter new areas, the new pilot plant will be supported by the Songwon’s strong local R&D team in Panoli, as well as its central technology innovation center located in Maeam, Korea.

“Technology and product innovation is at the core of Songwon’s business strategy. With our high-quality manufacturing expertise and strong R&D, we have already earned a solid reputation in the industry. This new facility will play an important role in ensuring that Songwon can continue developing new industrial technologies to meet evolving market needs and make it possible for us to reliably supply customers with innovative products for testing and approval,” said Giacomo Sasselli, leader operations, Songwon.

Headquartered in Ulsan (South Korea), Songwon Industrial Co is a leader in the development, production and supply of specialty chemicals. The second largest manufacturer of polymer stabilisers worldwide, Songwon operates group companies all over the world, offering the combined benefits of a global framework and readily accessible local organisations.

MRC

Venezuela ships more oil to US in July vs June, but less than yr ago

MOSCOW (MRC) — Venezuela's PDVSA and its joint ventures last month shipped 638,325 bpd of crude to the United States, a 30% increase over June due to larger sales of upgraded oil, according to Thomson Reuters trade flows data, said Hydrocarbonprocessing.

Venezuelan crude output has declined this year to its lowest point in 27 yr due to a lack of investment and payment delays to oil service firms, affecting exports to customers in key markets including the United States.

Even though the volume of crude sent to the United States in July was larger than the previous month, it was 22% below the same month in 2016. The main US receiver of Venezuelan crude last month was refiner Valero Energy, followed by PDVSA's refining unit in the United States, Citgo Petroleum.

PDVSA earlier this year signed a refinancing agreement with Russian energy giant Rosneft that has diverted more oil to that firm, and fewer volumes to Citgo.

But Citgo has requested more upgraded crude from joint ventures between PDVSA and its foreign partners in the Orinoco Belt, which has partially compensated for lower supplies from its parent company. Upgraded oils are those that have been treated at special facilities built to process extra heavy crude from Venzeuela's largest oil-producing region.

Another prominent buyer of Venezuelan crude in the United States, refining firm Phillips 66, did not receive crude supplies from PDVSA last month, according to the data.

US-based PBF Energy, Marathon Petroleum, Valero and Phillips 66 have reduced their purchases of heavy oil in recent weeks due to less barrels available from Venezuela and other OPEC producers, which is narrowing spreads between heavy Latin American crudes and lighter grades.
MRC