Venezuela close to declaring force majeure on crude exports

Venezuela could be about to declare force majeure on contracts with some of its major crude buyers.

This is due to falling output from its oil fields and tanker bottlenecks at its ports, according to a Reuters report.

 

There were more than 70 tankers off the coast of Venezuela earlier this week, according to Thomson Reuters vessel tracking data.

 

State-owned oil company PDVSA was believed to have told some customers that vessels should be equipped for ship-to-ship cargo transfers instead of loading at jetties in ports. If they do not accept this, PDVSA will consider declaring force majeure, sources told Reuters.

 

It was later reported that PDVSA has completed the first ship-to-ship (STS) transfer involving the Suezmax ‘Sonangol Kalandula’, which was believed bound for Tipco Asphalt's refinery in Kemaman, Malaysia.

 

According to the Reuters data, the vessel has not yet sailed and has been waiting since February to load Venezuelan Boscan heavy crude.

 

PDVSA had separately begun to notify all of its customers that it will no longer receive tankers for loading at Jose or Paraguana, its main export terminals, until ships already waiting are loaded.

 

Most customers have so far refused the ship-to-ship transfer request, due to the lack of  third party supervision for the operations, according to shippers and traders. Additional costs for completing the transfer have also contributed to the refusals.

 

PDVSA has been using sanctions imposed on the company by the US as a rationale for the change, according to one source.

 

Venezuela's export terminals have become congested as last month, US oil major ConocoPhillips won a court orders freezing PDVSA's key Caribbean assets, from where the Venezuelan company used to ship large cargoes to Asia.

 

Traders and shippers were sceptical that the transfers would succeed in easing the bottlenecks, as PDVSA will still have to load vessels at Jose to ship the cargo to the proposed offshore transfer sites, and production declines are not expected to ease.

 

Venezuela's crude exports declined by 28% in the first four months of this year to 1.19 mill barrels per day, compared with 1.65 mill barrels per day in the same period last year, according to Reuters trade flows data.

 

In January to April, crude output fell to 1.62 mill barrels per day, the lowest annual average in over three decades.

 

As mentioned above, aggravating the export problems, last month ConocoPhillips started to seize PDVSA's terminals, oil inventories and cargoes in the Caribbean to enforce a $2 bill arbitration award in a dispute over the socialist government's nationalisation of the US oil major's Venezuelan assets.

http://www.tankeroperator.com/ViewNews.aspx?NewsID=9783 

CryptoMarket360 is your one-stop shop for cryptocurrency information.

 

https://cryptomarket360.com/press-release-first-major-cryptocurrency-media-merger/

Long-standing thought-leader and blogger “The Crypto Curator” merges with currency news platform CryptoMarket360

Establishing a Comprehensive Bitcoin, Altcoin and digital currency knowledge base and curation platform. 

CryptoMarket360.com and TheCryptoCurator.com announced today they are joining forces to create a unified cryptocurrency curation platform that is slated to release multiple products to address market demands, and aimed at helping subscribers develop a unique view of the world’s landscape through the lens of Crypto and Blockchain technology. 

CM360 will consist of, but not limited to, a daily briefing (CM360B), designed for the busy person who needs a clean cut of the most impactful news of the day. The CM360 readers are those who desire a 360 degree look at the market each day.A weekly recap (CM360R), designed for the casual reader that isn’t concerned with the daily action but still desires to be in the know.  

A robust database (CM360D), designed for those who want to dig deeper and analyze, uncover trends, and find statistical information. 

Live Reports (CM360L), designed to provide ongoing live updates on specific topics, companies, people, etc. Instead of getting a one time report which in the world of Crypto is dated the moment it is published, CM360 Live will be updated constantly. 

It is our belief and we’ve received empirical validation from market leaders that this platform will be instrumental for those who are interested in the world of Crypto and Blockchain Technology.

CryptoMarket360 was created by Alan Percal, a credentialed actuary and WSOP champion, with a long history of entrepreneurship, and The Crypto Curator was created by Paul McNeal, who have been involved with Crypto since 2011, a former United States Navy Veteran, Serial Entrepreneur, and Young Entrepreneur Mentor.

 

Alan Percal, ASA, MAAA / Co-Founder and CEO 

Alan Percal, creator of CryptoMarket360, said, “I believe crypto currencies and related blockchain projects are still very much so in their infancy. I became involved with the crypto media sphere in order to boil down the oftentimes complex crypto news so that the everyday, non-technical person could stay informed. I’m excited to be partnering up with Paul to provide an even more robust platform in which we can deliver content to casual investors as well as high tech companies.” 

Alan Percal is a credentialed actuary and WSOP champion. He spent his first three post-collegiate years working at a Fortune 100 company and has since developed an extensive background in entrepreneurship and tech startups. Alan stumbled into the crypto world early on and is now working hard to bring value to the next wave of digital asset adopters.

 

Co-Founder and President

Paul McNeal, creator of The Crypto Curator, said, “I spent nearly a decade providing curated news information to Fortune 500 C-Suite Executives and leaders on Capitol Hill, if there is one thing I learned is that you need to pay attention to the news because there is much you can monitor and discover to help you take action.”

Paul McNeal is a seasoned serial entrepreneur and Veteran of the United States Navy Submarine Force. He spent 8 years building an information curation company that served Congress and Fortune 500 companies. Paul became aware of Bitcoin back in 2011 and immediately knew this was the future and that he must help others become aware as well.

The two have determined to remain with the CryptoMarket360 branding due to the brand awareness that exists in the current market.

Contact:

CM360 : Email: paul@cryptomarket360.com or alan@cryptomarket360.com

Website: www.cryptomarket360.com

Oil Boom Bottlenecks Are Costing U.S. Investors $1 Billion a Day

https://www.bloomberg.com/news/articles/2018-06-06/oil-boom-bottlenecks-are-costing-u-s-investors-1-billion-a-day

• Permian woes drill stocks for Parsley, Pioneer, Concho
• Diverse drillers, refiners are beneficiaries in pipe shortage

More than $1 billion a day. That’s the price tag for a Permian Basin pipeline crunch that’s increasingly affecting investors as much as it is West Texas oil drillers.

Eight of the top explorers focused on the booming U.S. shale region have lost $15.6 billion in combined market value in about two weeks, as shipping constraints devour the profit they can fetch for a barrel of crude. Parsley Energy Inc. shares have wilted 16 percent in that time; Diamondback Energy Inc. has been defanged, down 18 percent.

Even as production soars, dwindling pipeline space and a rail and trucking shortage have raised shipping costs, boosting the discount Permian producers take to offload their oil. The bottleneck benefits refiners who can buy cheaper crude and pipeline owners with extra space, but it’s dragging down explorers.

“You just don’t want to touch these Permian names," said Gabriele Sorbara, a Williams Capital Group analyst in New York. "They are falling off a cliff."

Relief may not come until 2020, when new pipelines are expected to be up and running. For now, here’s a rundown of winners and losers amid the space crunch:

Permian Explorers

Being a “pure-play" shale producer, even a Permian stalwart, is no longer the ticket to success for energy equities.

Since May 21, the price of benchmark West Texas Intermediate crude has fallen about 10 percent and companies focused primarily on the Permian have been shunned. The hardest fall: Concho Resources Inc, which had lost $4.1 billion off its market capitalization as of Tuesday.

As of Wednesday, oil in Midland, Texas, was trading for about $19 a barrel below Brent crude, the global benchmark price.

Even Pioneer Natural Resources Co., with relatively strong finances and secure pipeline contracts, has been swept up, Williams Capital’s Sorbara said by telephone. It’s lost $3.2 billion in market value, or 9 percent, since May 21.

While the shortages are real, he deems much of the market selloff “overblown," since even discounted Permian crude is selling for well above where many producers set their budgets earlier this year.

Diverse Portfolios

Investors, though, are fleeing to the relative safety of larger names with more diverse portfolios such as Occidental Petroleum Corp., whose shares are flat over the past couple weeks. The Permian’s biggest oil producer also pumps in the Middle East and Colombia, with roughly 40 percent of its output this year based on higher international crude pricing, Capital One Securities said in an analyst note.

The company also operates pipelines and a Gulf Coast export terminal that will benefit from cheaper U.S. crude prices. “The largest companies or companies with diverse portfolios can rotate capital around,” Sorbara said. “If you’re a pure play, the only thing you can do is step on the brakes.”

Inland Refiners

With bottlenecks between the Permian and major Gulf Coast refiners, operators in other parts of the country served by less congested pipelines have a relative advantage, analysts say.

That includes Delek US Holdings Inc., CVR Refining LP and HollyFrontier Corp. -- with refineries in New Mexico, Arkansas and northeastern Texas, among other locations, according to Barclays Plc. Delek gets about 78 percent of its crude from the Permian, HollyFrontier gets 39 percent and CVR gets 14 percent, the bank said in a June 5 analyst report.

Delek shares have climbed 7.5 percent in the past two weeks while CVR is up 3.3 percent and HollyFrontier is up 1 percent.

"Simply put, we think U.S. refiners win big with lower input costs," analysts including Justin Jenkins at Raymond James & Associates said in a June 4 note.

Pipeline Demand

Enterprise Products Partners LP and Magellan Midstream Partners LP also stand to benefit from the blow out in Midland prices as they own crucial pipelines in the Permian and dock space on the Gulf used for exports -- and have plans to add more.

“The very idea of congestion is beneficial," said Sandy Fielden, director of oil research at Chicago-based Morningstar Inc. “If I’m going to pitch my new pipeline or expand my pipeline, and I’m going to hold my open season, I can expect to see a full crowd there anxious to sign up quickly."

Enterprise started full service in April on its 416-mile Midland-to-Sealy pipeline, which can carry some 575,000 barrels per day of crude from the heart of the Permian to key export facilities in Houston. They also own the lion’s share of crude storage tanks and docks along the Gulf.

Magellan operates and owns part of the 400,000 barrel-a-day BridgeTex pipeline, transporting oil from the Permian to Corpus Christi, Texas. That route is scheduled for expansion in early 2019 because of added interest. The company said last month that almost all existing customers on its Longhorn pipeline, connecting the Permian to Houston, have renewed their contracts for two years.

— With assistance by Catherine Ngai

Oil prices move higher as Venezuela supply crisis intensifies

 

Nicolas Maduro together with Socialist Party Vice-President Diosdado Cabello (R) next to a portrait of Hugo Chávez. 

https://www.marketwatch.com/story/oil-prices-move-higher-as-venezuela-supply-crisis-intensifies-2018-06-06

Oil prices moved a leg higher on Wednesday, extending the prior day’s gains after reports Venezuela may not deliver some of its contracted crude oil exports amid political upheaval. 

Production and exports in Venezuela have recently been hit hard by political instability. That in turn has limited global supply, helping the Organization of the Petroleum Exporting Countries hit its target for reduced output faster than expected. 

Venezuela’s state-owned PDVSA is now reportedly considering declaring force majeure on some contracts with crude oil buyers, essentially declaring they cannot be fulfilled as output from its oil fields has tanked and bottlenecks are slowing down exports at the ports. 

“As things stand, the situation is clearly reaching crisis point and has left the embattled Latin American producer staring into the abyss. The end game for Venezuela’s oil troubles is fast approaching, and when it does, price fireworks will be the order of the day,” said Stephen Brennock, oil analyst at ‎PVM Oil Associates, in a note. 

West Texas Intermediate crude CLN8, -0.99%  for July rose 11 cents, or 0.2%, to $65.62 a barrel, adding to a 1.2% gain from Tuesday that ended a three-session skid. August Brent crude LCOQ8, -0.36%  , the global oil benchmark, added 52 cents, or 0.7%, to $75.90 a barrel. 

Concerns about the Venezuelan supply drop, and about potential export disruption in Iran, have sparked speculation that oil demand will significantly outstrip supply and create a spike in prices. 

The threatened shortfall has added pressure on OPEC and its partners, led by Russia, to increase production targets when they gather for a meeting in Vienna on June 22-23. In an unusual demand, the U.S. government has reportedly asked OPEC kingpin Saudi Arabia and other cartel members to increase their oil flow by around 1 million barrels a day, to keep a lid on rising oil prices. 

Reuters reported in late May that the major oil producers were considering increasing output by 1 million barrels to plug the gap from Venezuela. That sparked a selloff in the oil market, with Brent losing sight of the $80 handle and WTI moving back below $65 a barrel. 

However, traders shouldn’t be so discouraged by the prospect of a rise in OPEC production, according to Jeff Currie, head of commodities research at Goldman Sachs. 

“Everybody is all bearish about the recent announcement of a million barrels per day extra supply, but the market needed it. It not only needs it, it is mandatory. Otherwise you just drive the bus off a cliff,” he said at the S&P Global Platts’ annual crude oil summit in London on Tuesday.

On Wednesday, traders were also waiting for the weekly supply data from the U.S. Energy Information Administration, due for release at 10:30 a.m. Eastern Time. 

In other energy products on Wednesday, July gasoline RBN8, -1.61%  climbed 0.3% to $2.11 a gallon, while heating oil for the same month HON8, -0.59%  added 0.7% to $2.16 a gallon. 

Natural gas for July NGN18, -0.21%  rose 0.5% to $2.90 per million British thermal units.

U.S. to ask OPEC for 1 million barrel a day output hike

https://www.chron.com/business/energy/article/U-S-Said-to-Ask-OPEC-for-1-Million-Barrel-a-Day-12968163.php

The U.S. government has quietly asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, according to people familiar with the matter.

The rare request came after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices on Twitter. It also follows Washington’s decision to reimpose sanctions on Iran’s crude exports that had previously displaced about 1 million barrels a day, or just over 1 percent of global production.

While U.S. lawmakers have habitually criticized the Organization of Petroleum Exporting Countries at times of high oil prices, and the government has on occasion encouraged the cartel to pump more, it’s unusual for Washington to ask for a specific output hike, the same people said, asking not to be named discussing private conversations. It’s not clear precisely how the request was communicated.

The American request was debated at a meeting of some Arab oil ministers over the weekend in Kuwait City, the people said. A statement published after the talks pledged to “ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world.” Saudi Arabia and Russia last month proposed a gradual production increase, although other members of the group have yet to agree.

Benchmark Brent oil futures dropped as much as 1.5 percent to $74.16 a barrel in London trading after the U.S. request was reported.

"Looks like OPEC is at it again," Trump wrote in mid-April in a post on Twitter. "Oil prices are artificially Very High! No good and will not be accepted!"

The White House declined to comment on specific conversations, but a spokesperson for the U.S. National Security Council said access to affordable and reliable energy underpins global economic growth and the nation’s security.

"We welcome any market-based action that increases energy access and fosters a healthy global economy," the spokesperson said.

U.S. Treasury Secretary Steven Mnuchin last month disclosed Washington had "various conversations with various parties about different parties that would be willing to increase oil supply to offset" the impact of U.S. sanctions on Iranian oil output.

Although Mnuchin declined to provide specifics, only four countries among OPEC and its allies hold enough spare production capacity to offset that impact: Saudi Arabia, Russia, the United Arab Emirates and Kuwait.

OPEC and a group of non-OPEC countries including Russia, Mexico and Kazakhstan agreed in late 2016 to cut oil output by a combined 1.8 million barrels a day in an effort to boost oil prices. Brent crude, the global benchmark, has risen from less than $45 a barrel before the deal was signed to more than $80 a barrel last month.

Consumer Anxiety

The OPEC deal removed more crude than originally intended from the market because of the collapse of the Venezuelan energy industry. With oil inventories in developed countries back to their five-year average and fuel prices approaching painful levels for consumers, Saudi Arabia and Russia have started talking about boosting output again, prompting Brent to slide back toward $75.

OPEC and its allies will discuss their production policy for the second half of the year in meetings scheduled on June 22 and 23 in Vienna. Saudi Oil Minister Khalid Al-Falih last month said the kingdom shared the "anxiety" of consuming nations about high oil prices and added that OPEC and its allies were "likely" to boost output.

The most recent comments by Trump and the request for extra oil are among the most forceful U.S. intervention in OPEC affairs since Bill Richardson, the energy secretary during the second administration of Bill Clinton, phoned the Saudi minister in the middle of an OPEC meeting in 2000 asking for a production increase. The intervention enraged other members of the cartel, exacerbating a schism between Saudi Arabia and Iran.

--With assistance from Javier Blas.

©2018 Bloomberg L.P.

Oil slips as U.S. supply grows, OPEC mulls higher output

Pipelines run to Enbridge Inc.'s crude oil storage tanks at their tank farm in Cushing, Oklahoma, U.S., March 24, 2016. REUTERS/Nick Oxford/File Photo 

https://www.yahoo.com/finance/news/u-crude-eases-third-day-expectations-higher-supplies-000822641--finance.html 

Oil prices slipped on Monday as U.S. production hit a record high and OPEC members considered boosting supply.

Benchmark Brent crude oil lost $1.26 a barrel, or 1.6 percent, reaching a low of $75.53 before recovering to $76.29, down 50 cents, by 1330 GMT.

U.S. light crude was unchanged at 65.81 a barrel. The U.S. contract lost about 3 percent last week after a decline of nearly 5 percent the previous week.

"A sea of red is washing over the energy complex as rising U.S. production coupled with a looming relaxation in OPEC-led cuts sends bulls scurrying for the exits," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

U.S. crude production climbed in March to 10.47 million barrels per day (bpd), a monthly record, data from the Energy Information Administration showed last week.

U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, energy services company Baker Hughes said on Friday. That was the eighth time drillers have added rigs in the past nine weeks.

Arab oil ministers agreed over the weekend on the need for continued cooperation between members of the Organization of the Petroleum Exporting Countries (OPEC) and other big producers to balance global supply, Kuwait's state news agency KUNA reported on Sunday.

OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria, along with their counterpart from non-OPEC Oman, met unofficially in Kuwait on Saturday.

OPEC meets formally on June 22 to set oil policy. It is expected to agree to raise output to cool the market amid worries over Iranian and Venezuelan supply and after Washington raised concerns that the oil rally was going too far, OPEC sources familiar with the discussions told Reuters last month. 

Saudi Arabia, the effective OPEC leader, and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.

Russia's largest oil producer, Rosneft , will be able to restore 70,000 bpd of oil output in only two days if global production limits are lifted, Renaissance Capital wrote in a client note.

Hedge funds and other money managers have cut their bullish wagers on U.S. crude futures and options, according to data released on Friday, as oil prices slumped on oversupply fears.

(Additional reporting by Naveen Thukral in Singapore; Editing by David Goodman and Mark Potter)

IMO takes autonomous ships on board

http://www.tankeroperator.com/ViewNews.aspx?NewsID=9760

The IMO has started work on how safe, secure and environmentally sound maritime autonomous surface ships (MASS) operations may be addressed the organisations instruments.

 

The Maritime Safety Committee (MSC) recently endorsed a framework for a regulatory scoping exercise, as work in progress, including preliminary definitions of MASS and degrees of autonomy, as well as a methodology for conducting the exercise and a work plan.

For the purpose of the regulatory scoping exercise, MASS is defined as a ship which, to a varying degree, can operate independently of human interaction.

To facilitate its progress, the degrees of autonomy were organised (non-hierarchically) as follows - it was noted that MASS could be operating at one or more degrees of autonomy for the duration of a single voyage:

•             Ship with automated processes and decision support: Seafarers are on board to operate and control shipboard systems and functions. Some operations may be automated.

•             Remotely controlled ship with seafarers on board: The ship is controlled and operated from another location, but seafarers are on board.

•             Remotely controlled ship without seafarers on board: The ship is controlled and operated from another location. There are no seafarers on board.

•             Fully autonomous ship: The operating system of the ship is able to make decisions and determine actions by itself.

The first step involves a correspondence group, which will identify current provisions in an agreed list of IMO instruments and assess how they may or may not be applicable to ships with varying degrees of autonomy and/or whether they may preclude MASS operations.

A second step will include an analysis conducted to determine the most appropriate way of addressing MASS operations, taking into account, inter alia, the human element, technology and operational factors.

IMO’s MSC, which met for its 99th session (16th-25th May), established the MASS correspondence group to test the framework of the regulatory scoping exercise agreed and, in particular, the methodology, and will report back to MSC100 (3rd-7th December, 2018).  

The group will test the methodology by conducting an initial assessment of SOLAS regulation III/17-1 (recovery of persons from the water), which requires all ships to have ship-specific plans and procedures for recovery of persons from the water; SOLAS regulation V/19.2 (carriage requirements for carriage of shipborne navigational equipment and systems); and Load Lines regulation 10 (information to be supplied to the Master).

If time allows, it will also consider SOLAS regulations II-1/3-4 (emergency towing arrangements and procedures) and V/22 (navigation bridge visibility).

The committee also asked for proposals from member states and international organisations relating to the development of interim guidelines for MASS trials to be ready for MSC100.

The list of instruments to be covered in the MSC’s exercise includes safety (SOLAS); collision regulations (COLREG); loading and stability (Load Lines); training of seafarers and fishers (STCW, STCW-F); search and rescue (SAR); tonnage measurement (Tonnage Convention); and special trade passenger ship instruments (SPACE STP, STP).

Speaking at the opening of MSC99, IMO secretary general, Kitack Lim, highlighted the importance of remaining flexible to accommodate new technologies, and so improve shipping’s efficiency, “while at the same time keeping in mind the role of the human element and the need to maintain safe navigation, further reducing the number of marine casualties and incidents.”