Oil up more than 8 percent as OPEC finalizes output cut deal

http://www.reuters.com/article/us-global-oil-idUSKBN13O06N

Oil prices soared more than 8 percent on Wednesday as some of the world's largest oil producers agreed to curb oil output for the first time since 2008 in a last-ditch bid to support prices.

Crude prices, however, are unlikely to skyrocket in reaction to the deal, but will instead take measured steps higher, traders and analysts said. 

The Organization of the Petroleum Exporting Countries agreed to cut production to 32.5 million barrels per day, Kuwait's oil minister said. The cuts include Iraq reducing output by 200,000 bpd to 4.351 million bpd beginning in January. The country had previously resisted cuts, providing a hurdle to an agreement.

The cut was at the low end of production of a preliminary agreement struck in Algiers in September, and reduces production from a current 33.64 million bpd. 

Non-OPEC member Russia has agreed to cut output by 300,000 bpd. OPEC will meet with non-OPEC producers on Dec. 9.

U.S. West Texas Intermediate crude futures CLc1 for January delivery rose $3.93 to $49.16 a barrel, a 8.7 percent gain at 12:09 p.m. Eastern. The move was the largest one-day gain since February. 

An employee holds a gas pump at a petrol station in Sao Paulo, Brazil, November 8, 2016. REUTERS/Paulo Whitaker

 

Brent crude LCOc1 futures for January delivery rose $3.73 to $50.11 a barrel, a 8.0 percent gain. That contract expires Wednesday. Brent futures for February LCOc2 rose 8.8 percent, or $4.16 to $51.48 a barrel.

"It's going to take time to see whose going to abide by those rules," said Oliver Sloup, director of managed futures at IITrader.com. In the past, not all producers have complied with agreements on supply cuts, Sloup said. As a result, there is skepticism about how closely the production caps will be adhered to.

Kuwait, Venezuela and Algeria have agreed to monitor compliance with the OPEC agreement.

The market will grow in a measured way because traders with short positions have already exited crude futures, according to Dominic Chirichella, senior partner at the Energy Management Institute.

"There's going to be an air of cautiousness and rightfully so," he said. "I think the market is going to move to the upside, but in a metered, cautious manner over a period of time."

The oil rally ricocheted through the market, with stocks and bond prices reaction to the move.

U.S.-listed oil companies including Exxon Mobil Corp (XOM.N), Chevron Corp (CVX.N) and Schlumberger (SLB.N) saw shares rise as crude prices climbed. Some U.S. producers saw shares spike more than 10 percent, including Pioneer Natural Resources (PXD.N), Hess Corp (HES.N) and Anadarko Petroleum (APC.N).

Deferred spreads for U.S. and Brent crude futures also rallied on the OPEC deal.

The WTI Dec 2017 to Dec 2018 CLZ7-Z8 spread rallied to as much as negative 39 cents from negative $1.26 a barrel on Tuesday. Meanwhile, the Brent Dec 2017 to Dec 2018 LCOZ7-Z8 spread rallied to as much as negative $1.04 a barrel from negative $1.87 a barrel on Tuesday.

A weekly government report on U.S. crude oil stockpiles had little sway in the market, which remained focused on the OPEC deal. U.S. crude stockpiles unexpectedly fell 884,000 barrels in the week, compared with forecasts of a 636,000-barrel increase.

(Additional reporting by Amanda Cooper and Karolin Schaps in London, Henning Gloystein in Singapore; Editing by Marguerita Choy and Chizu Nomiyama)

Oil futures drop as doubts grow OPEC meeting will produce a deal

 Iraq's Oil Minister Jabar Ali al-Luaibi arrived in Vienna on Monday.

http://www.marketwatch.com/story/crude-falls-as-doubts-grow-opec-meeting-will-produce-a-deal-2016-11-29 

Crude-oil futures dropped Tuesday, with U.S. prices aiming for their lowest finish in two weeks, pressured by growing doubts that the world’s biggest oil producers will reach a deal to cut global output. 

All eyes are on the Organization of the Petroleum Exporting Countries meeting on Wednesday in Vienna. Internal discord could derail producers’ plans to reach an agreement limiting output, which has outpaced demand for more than two years. 

Read: OPEC oil meeting: 7 things you need to know

 

In September, OPEC agreed on targets that would have translated into production cuts of 200,000 to 700,000 barrels a day. Analysts say if the Wednesday meeting ends inconclusively, oil prices could fall as low as $35 a barrel. 

On the New York Mercantile Exchange, January West Texas Intermediate crude CLF7, -3.82%   fell $1.78, or 3.8%, to $45.30 a barrel. A settlement around this level would be the lowest since Nov. 14. January Brent crude LCOF7, -3.83% which expires at Wednesday’s settlement, declined $1.78, or 3.7%, to $46.46 a barrel on London’s ICE Futures exchange.

The meeting is expected to begin at 10 a.m. Central European Time on Wednesday. OPEC’s secretary-general is scheduled to hold a news conference in the afternoon.

“The whole concept is so silly. If one part of the world cuts, supply will come online in other parts of the world...and it will come on very quickly.”

Hamza Khan, ING Bank.

“With member delegations already gathered in Vienna ahead of [Wednesday’s] formal meeting, it is increasingly clear that key divisions still remain,” said Robbie Fraser, commodity analyst at Schneider Electric.

Oil prices edged up overnight after Iran and Iraq signaled they were willing to hold output steady. Both countries had previously said they wanted to increase output.

But a Tuesday Reuters report, citing OPEC sources, said a meeting of technical experts on Monday couldn’t resolve differences between Saudi Arabia and Iran and Iraq over the mechanics of implementing output reductions. 

One of the key hurdles for the production accord is Russia, which isn’t a member of OPEC. Russia has indicated it is only interested in holding production at 11.2 million barrels a day. A freeze, it said, is essentially a reduction because it planned to increase output next year. 

“Participation from non-OPEC producers, such as Russia and Kazakhstan, appears to have encountered roadblocks, with several planned discussions already cancelled,” said Fraser. “The net result is a fairly bearish picture for the oil market.”

OPEC will also struggle to nail down production quotas for member nations as several countries — such as Nigeria and Libya — have requested exemptions because their oil production and exports have been hurt by militant attacks. In addition, OPEC doesn’t have the authority to make members comply with their production assignments. 

“A production cut talk is likely to see a deadlock, especially with intransigence from various OPEC members,” said Barnabas Gan, an economist at the Singapore-based bank OCBC. 

On top of that, some market participants say a collective production cut will have the opposite effect globally in the long run. 

“Higher oil prices means non-OPEC producers will be more encouraged to drill for more oil, which will increase global supply and prices will be depressed again,” said Gao Jian, an energy analyst at SCI International. 

In the U.S., where many oil producers were forced out of the market when prices dropped below $40 a barrel, there are signs of resilience. The latest forecasts from the U.S. Energy Department show domestic crude production is likely to hit 8.7 million barrels a day in 2017, which is 100,000 barrels a day higher than the previous estimate. 

Read: How an OPEC output deal could catapult U.S. producers back to stardom

 

Production elsewhere is also climbing. North Sea producers, who have been troubled by rising costs and high taxes, recently increased output to a three-year high. That shows that any OPEC agreement would have a limited impact on the global crude glut, said Hamza Khan, head of commodity strategy at ING Bank. 

“The whole concept is so silly,” Khan added. “If one part of the world cuts, supply will come online in other parts of the world...and it will come on very quickly.” 

Back on Nymex, December gasoline RBZ6, -2.35%  fell 3.6 cents, or 2.6%, to $1.376 a gallon and December heating oil HOZ6, -2.54%  lost 4.4 cents, or 2.9%, to $1.469 a gallon.

January natural gas NGF17, -0.15%  edged down by a penny to $3.31 per million British thermal units. 

The Energy Information Administration will release its weekly data on U.S. crude oil and petroleum product supplies early Wednesday. The American Petroleum Institute is set to issue its own data later Tuesday.

Analysts polled by S&P Global Platts expect to see a decline of 250,000 barrels in crude stockpiles.

— Carla Mozee and Timothy Puko contributed to this article.

Nigeria Reaches $5.1 Billion Settlement with Operators

Nigeria Reaches $5.1 Billion Settlement with Operators

The government of Nigeria has worked out a settlement with foreign operators it owes money to. The government, through NNPC, owes firms like Chevron, ENI, ExxonMobil, and Shell for operating costs incurred over a five-year period from 2010-2015.

According to the government, it worked out a deal that has it paying $5.1 billion to the foreign operators. The amount, less than the $6.8 billion previously discussed, will be settled through crude oil sales over five years and will be interest free.

Nigeria still owes the companies $2.6 billion from 2016 operations.

Sheriff on pipeline protests: 'My job is to enforce the law'

 

https://www.yahoo.com/news/sheriff-pipeline-protests-job-enforce-law-152352492.html

MANDAN, N.D. (AP) -- Don't look for apologies from the North Dakota sheriff leading the response to the Dakota Access oil pipeline protests, especially for the recent — and, in some circles, controversial — action against demonstrators who he believes have become increasingly aggressive.

"We are just not going to allow people to become unlawful," said Morton County Sheriff Kyle Kirchmeier, a veteran of the North Dakota Highway Patrol and National Guard who was elected to his first term as sheriff about two years ago. "It's just not going to happen."

More than 525 people from across the country have been arrested during months of protests over the four-state, $3.8 billion pipeline, all here in support of the Standing Rock Sioux tribe that's fighting the project because it believes it threatens drinking water and cultural sites on their nearby reservation.

His department's job of policing the protesters — the vast majority who've been camping on federal land that the U.S. Army Corps of Engineers says it'll close in December for safety concerns — has cost the county more than $8 million, even with help from the state Highway Patrol and officers from various states. Their tactics, however, have drawn criticism from Standing Rock's tribal leader as well as protest organizers and celebrities.

Standing Rock Sioux Chairman Dave Archambault said he and Kirchmeier have met many times and each meeting has been tense and unproductive. "I don't think aggressive force is necessary and he thinks it's necessary," Archambault said.

In the most recent clash between police and protesters, which was near the path of the pipeline and spanned Sunday night into Monday morning, officers used tear gas, rubber bullets and large water hoses in freezing weather. Organizers said at least 17 protesters were taken to the hospital, some for hypothermia and one for a serious arm injury, and one officer was injured.

Archambault called the confrontation an act of terror against unarmed protesters that was sanctioned by Kirchmeier.

"His job is to protect and serve, not to inflict harm and hurt," Archambault said.

But Kirchmeier, who has the backing of the state's Republican governor and attorney general, defended officers' actions. He and other authorities said officers were assaulted with rocks, bottles and burning logs.

Kirchmeier, a 53-year-old married father, grew up in this county, which has a population of fewer than 30,000 people — about 15 residents per square mile. He retired from the North Dakota Highway Patrol as a captain after 29 years, and had served in the National Guard for four years.

The protests are demanding: Kirchmeier hasn't had a day off since August, routinely working more than 12 hours a day. The 34 deputies in his department are pulling similar shifts, he said, even with help from more than 1,200 officers from North Dakota and nine other states.

Some officers have been targeted online by protesters, Kirchmeier included. He said someone recently posted the location of his father's grave, which he took as an effort to intimidate.

"Social media has been very bad and it has turned out like law enforcement is building the pipeline," he said. "I can't stop the pipeline. My job is to enforce the law."

President Barack Obama raised the possibility of rerouting the pipeline earlier this month, and construction on the last remaining large chunk, which is on federal land near the reservation, was halted by the Corps for the time being. But Kelcy Warren, CEO of pipeline developer Energy Transfer Partners, told The Associated Press the company won't do any rerouting.

Kirchmeier, like many other of the state's elected officials, blame the Obama administration for not stepping in.

"The issue of the pipeline is not going to get solved with protesters and cops looking at each other," Kirchmeier said. "This is bigger and takes way more political clout than what the county has to offer."

Attorney General Wayne Stenehjem said Kirchmeier is in "an incredibly difficult position."

"He has the responsibility to allow people to lawfully exercise their First Amendment rights and he has the obligation to stop it when there is violence contrary to the law," Stenehjem said. "And now there are a significant number or lawless people and the citizens are worried."

Gov. Jack Dalrymple said Kirchmeier "has done a remarkable job dealing with all the issues brought about by these protests. He has been totally professional in what is not a typical law enforcement challenge in North Dakota."

With winter looming, the Corps has decided to close the land north of the Cannonball River where the Oceti Sakowin protest encampment have flourished on Dec. 5, also citing the confrontations between protesters and authorities, according to a letter Archambault said he received.

"To be clear, this means that no member of the general public, to include Dakota Access pipeline protesters, can be on these Corps lands," the letter provided by the tribe said.

But protest organizers said Saturday that they don't intend to leave or stop their acts of civil disobedience.

Kirchmeier said before the Corps' move that North Dakota residents who have grown tired — and increasingly afraid — of the protests are backing law enforcement.

"People don't want their livelihoods disrupted," he said. "They are not taking this lightly."

First large ethane carriers delivered

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8176

This month, the ABS-classed 87,000 cu m ‘Ethane Crystal’, the world’s first Very Large Ethane Carrier (VLEC), was delivered to India’s Reliance Industries by Samsung Heavy Industries (SHI).

 

‘Ethane Crystal’ is the first of six VLECs to be delivered with ABS Class through 2017. This liquefied gas carrier is able to carry ethane and/or LPG.

This vessel was the first of its type to be built with a specially designed GTT Mark III membrane cargo containment system and represents a significant step up from the largest LEGs delivered to date – the 37,000 cu m ABS-classed ‘Navigator Aurora’ and ‘Navigator Eclipse’.

“Delivering the ‘Ethane Crystal’ is truly a landmark achievement that has created an entirely new market of shipping liquefied ethane. It is a testament to all stakeholders involved in bringing the project to fruition,” said ABS chairman, president and CEO, Christopher Wiernicki. “ABS is proud to have been chosen to class this vessel and to be included as a trusted technical advisor, working alongside the owners, shipyard, designer and port and flag state teams to advance safety throughout the development of the world’s largest, purpose-built ethane carrier.”

Demand for this vessel and others currently on order is driven by the surplus of ethane produced as a byproduct of shale oil and gas in North America. ‘Ethane Crystal’ is to trade between North America and India, carrying ethane that will be used as feedstock for petrochemical production.

Elsewhere, on 11^th November, the first vessel in the ECO STAR 36k type series of ethane carriers, ‘GasChem Beluga’, was delivered to Ocean Yield.

The ECO STAR 36K design was developed by German shipowner Hartmann Reederei together with its long-term partners HB Hunte Engineering for the ship and AC Inox who was responsible for the gas plant and equipment.

“We are very happy to see the first vessel of this new design hitting the water with only a month delay”, said Jan-Lars Kruse, Hartmann Reederei managing director. “It is a remarkable achievement in these challenging times and we are very grateful to all our partners and friends involved in this project. Every party involved pushed this project into the same direction and we could not have done it without each other.”

Reducing fuel consumption, the hull design is claimed to be unique and highly efficient. The vessel’s superstructure is located at the bow, the engine at the stern, resulting in an excellent distribution of weight and a significant reduction of ballast water. In combination with the new ‘Svelte’ bow design invented by Hartmann, this hull type leads to reduced, more efficient fuel consumption, the company claimed.  

The vessel is also fitted with a 2-stroke dual fuel MAN main engine capable of burning gas and/or traditional fuel. It is also the first 2-stroke engine to operate on ethane and LNG with negligible methane slip − due to the diesel principle. 

The cargo tanks have been built to the new Star-Trilobe design developed by Hartmann and Stargas. This type of tank enables higher cargo flexibility and faster loading operations and provides an increase in cargo capacity of about 30% and therefore significantly increases  economies of scale. 

Upon her delivery, ‘GasChem Beluga’ entered into a long term bareboat charter between Ocean Yield and Hartmann and will be sublet back-to-back under a maximum 15-year long timecharter to Saudi Arabian petrochemical company Sabic.

She sailed for Houston to load her first ethane cargo destined for delivery in Europe before the end of this year.

Hartmann Gas Carriers conducts her technical/nautical operations and GasChem Services manages the commercial operations.

The second vessel in this series is scheduled for delivery in July, 2017.

Russia says not yet invited to OPEC meeting on November 30

Russian Energy Minister Alexander Novak attends the 18th Ministerial Meeting of Gas Exporting Countries Forum (GECF) in Doha, Qatar November 17, 2016. REUTERS/Naseem Zeitoon

http://www.reuters.com/article/us-opec-meeting-russia-novak-idUSKBN13I0HQ?il=0

Russia has not yet received an invitation to attend an OPEC meeting on Nov. 30, but will take part in expert-level consultations with the organization on November 28, Russian Energy Minister Alexander Novak said on Wednesday.
Asked if Russia had received an invitation to the Nov. 30 meeting, Novak told reporters: "After the consultations the situation will be more or less clear. For now it's premature to receive them (invitations) until the countries have conducted expert-level consultations."

(Reporting by Oksana Kobzeva, Olesya Astakhova and Vladimir Soldatkin; Writing by Christian Lowe; Editing by Maria Kiselyova)

Stock Futures Set Up for Record Open as Crude Oil Levels Off

https://www.thestreet.com/story/13901405/3/stock-futures-set-up-for-record-open-as-crude-oil-levels-off.html

Stock futures were higher Tuesday morning, setting up equities for further record gains, as crude oil slipped after a massive surge. 

S&P 500 futures were up 0.22%, Dow Jones Industrial Average futures added 0.26%, and Nasdaq futures rose 0.4%. 

Wall Street scored a trifecta of record closes on Monday as a crude oil rally gave stocks an across-the-board boost. The S&P 500, Dow, and Nasdaq each scored their own record close, the first time all have done so on the same day since mid-August. The three had previously closed at records simultaneously back in 1999.

Crude oil prices surged on Monday after Russian President Vladimir Putin suggested a willingness to agree to a production freeze deal with Organization of Petroleum Exporting Countries. OPEC officials are currently meeting in Vienna to discuss terms of a deal. Members will meet again in Vienna on Nov. 30 to vote on the deal. A Nigerian delegate told The Wall Street Journal that members should be on board with the terms "by the end of the day."

Oil prices have fluctuated on renewed hopes for an OPEC deal that would rein in record production from the world's largest oil producers. OPEC aims to limit production to 32.5 million to 33 million barrels a day. The bloc reached a record 33.83 million barrels a day last month.

West Texas Intermediate crude for January was trading at $47.90 a barrel, down 0.7%.

DSW (DSW) increased 4% after lifting its full-year outlook on the back of tighter cost controls and improved sales. The shoe retailer anticipates full-year adjusted profit between $1.35 and $1.45 a share, up from its previous range of $1.32 to $1.42.

Campbell Soup (CPB) moved higher before the bell following a better-than-expected quarter. Net income rose to 94 cents a share from 62 cents in the year-ago quarter. Adjusted earnings of $1 came in a dime above estimates. The canned-goods company anticipates full-year sales flat to up 1% and for adjusted earnings to increase by 2% to 5%. 

Burlington Stores (BURL) increased 8% after same-store sales and revenue topped analysts' consensus estimates. The discount retailer reported a 3.7% increase in same-store sales over its recent quarter, higher than anticipated 3.3% growth. Sales increased 8.9% to $1.35 billion, higher than $1.32 billion consensus.

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Barnes & Noble (BKS) climbed 5% after narrowing its second-quarter loss and reporting better-than-expected sales. The book retailer reported a loss of 29 cents a share, narrower than a loss of 36 cents in the year-ago quarter and better than an estimated loss of 39 cents. Sales declined 4% to $858.5 million, a result blamed on sluggish sales tied to the election cycle. Analysts anticipated sales of $845 million. 

Hormel Foods (HRL) rose 3% in premarket trading after reporting a solid outlook for its fiscal 2017. The owner of Skippy peanut butter expects full-year profit between $1.68 and $1.74 a share, higher than consensus of $1.68. Fiscal organic sales are expected to grow 5%, driven by growth in its grocery products unit and its Jennie-O Turkey Store business. 

Palo Alto Networks (PANW) fell more than 10% in premarket trading after reporting a mixed first quarter. The tech company earned 55 cents a share, 2 cents above estimates. Sales surged 34% to $398.1 million, though fell short of consensus by $2.1 million. The security software developer also issued weaker-than-expected guidance, targeting current-quarter sales no higher than $432 million. Analysts anticipated sales of $439 million. 

Jack in the Box (JACK)  fell 3% despite topping quarterly earnings estimates. The fast food chain earned $1.03 a share over its fourth quarter, 15 cents higher than expected. Revenue climbed 12.5% to $398.42 million, in-line with consensus.

Gunvor Secures 1-Year Credit Facility to Back ARA Refining Operations

Commodities trader Gunvor has secured a one-year $725 million credit facility from 13 banks to provide working capital for its refining operations in the Amsterdam-Rotterdam-Antwerp (ARA) area, the company said Tuesday.

The "borrowing base" facility, which reflects the amount lenders will loan based on the value of the collateral, will back Gunvor's refineries at Antwerp (107,500 b/d, with 1.1-million-cbm storage capacity) and at Rotterdam (88,000 b/d).

It will also aid its involvement in the 1.09-million-cbm Maasvlakte oil terminal at Rotterdam, operated by Vopak, in which it acquired a share through the takeover of Kuwait Petroleum International's Europoort refinery in early 2016.

The latest financing deal was coordinated by ING Bank and will run for 364 days

 

https://www.tankterminals.com/news_detail.php?id=4093&utm_medium=email&utm_campaign=Subscribers%20-%20Week%2047&utm_content=Subscribers%20-%20Week%2047+CID_e0cce6152112609869414e23385bd8ec&utm_source=Weekly&utm_term=Gunvor%20Secures%201-Year%20Credit%20Facility%20to%20Back%20ARA%20Refining%20Operations 

Markets – And the winners are - Aframaxes!

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8149

The VLCC market ended last week at a slow pace.

 

Charterers had basically finished for November ex MEG and the market players focused more on the forthcoming ‘Bahri function’ in Dubai this week. 

 

Charterers continued to drip feed the market, but nevertheless owners managed to turn the recent soft/quiet trend around by forcing charterers to pay up, Fearnleys reported. 

 

Thus far, only BOT stems have emerged. Owners were looking for increased activity when the parties in Dubai were over and the outstanding stems are released. 

 

In the Atlantic, both West Africa and North Sea strengthened, as steady demand was recorded. 

 

Suezmaxes found some relief in a batch of West Africa east cargoes entering the market simultaneously on early Dec loading dates, but they received very limited interest from owners who did not want to commit vessels for low returns on long voyages. 

 

As a result, TD20 spiked at WS82.5 but had slipped earlier this week. 

 

The Black Sea and Med areas are currently stable being propped up by the rampant Aframax market. 

 

While the West Africa outlook will remain steady, we could see fallout if there is a reaction going forward on the Black Sea and Med rates, if Aframaxes become uneconomical. 

 

The North Sea and Baltic strengthened strongly last week, but have seen a slow start to this week. At the time of writing (Wednesday), North Sea and Baltic December dates could firm, as high activity in the Med and Black Sea drive momentum. 

 

In the Med and Black Sea, the market is going through the roof. With only a couple of ships to choose from, owners have been on the ascendancy, Fearnleys said. 

 

A couple of end-month Black Sea cargoes did not manage to find a ship last week, and as Turkish Straits delays kept increasing over the weekend, owners showed no mercy. 

 

For example, WS170 was on subs ex Black Sea, and there are still a couple of cargoes left in a tight window, so more high numbers will be paid this week, Fearnleys concluded. 

 

What is causing the strength in Cross-Med Aframax rates? 

 

Aframax Cross-Med freight rates saw a sharp spike last Friday, nearly doubling from WS80 to WS140 in a day, Ocean Freight Exchange (OFE), said.  

 

Rates have remained firm at WS140 since on the back of a combination of factors, including surging production in the region, which boosted exports, lending support to the tanker market as more barrels looked for homes. 

 

Key exporters in the region pumped more oil than ever, with Russian production setting a new post-Soviet record at 11.2 mill barrels per day in October and Libya returning to the market, OFE said. 

 

The start-up of Kazakhstan’s huge Kashagan oil field has led to an increase in CPC Blend exports, up from 600.000 barrels per day to 1 mill barrels per day in October. 

 

With exports from Kashagan and Filanovsky oil fields ramping up and Libya’s largest port, Es Sider, poised to resume exports in days, the Med crude market is likely to remain vastly oversupplied.   

 

As excess volumes in the region fill up onshore storage sites, oil companies have turned to floating storage as an option. There are up to 20 Aframaxes storing crude in the region, potentially adding up to 12 mill barrels at sea, which has reduced the list of tonnage available. 

 

The steep contango in ICE Brent prices may further induce charterers to book more vessels for floating storage, despite the spike in freight rates. The Brent M1-M2 spread widened to $1.18 per barrel last week, currently holding at $1 per barrel.  

 

Recent storms in the Black Sea have caused longer vessel delays of up to four to five days, further boosting freight rates, OFE concluded. 

 

Meanwhile, in Libya, a tanker reportedly sailed from Ras Lanuf with 600,000 barrels of oil last Monday, the first newly produced crude oil to be exported since the terminal reopened in September, a port official said, according to Reuters. A second tanker was due to berth at Ras Lanuf shortly. 

 

Ras Lanuf is one of four ports that forces loyal to eastern commander Khalifa Haftar seized in September. Three had been blockaded by a rival faction.

 

One of the ports, Es Sider, remains shut. At, Zueitina, an official said three tankers had loaded this month with a fourth expected, compared to about 20 tankers per month when the port was operating normally, Reuters reported.

 

In the charter market recent fixtures reported by broking sources included Frontline taking the 2011-built VLCC ‘Oceanis’ for 12 months at $32,000 per day.

 

Koch reportedly took the 2004-built VLCC ‘Xin Jin Yang’ for six months at $32,000 per day, while Staoil was thought to have fixed the 2004-built VLCC ‘DHT Condor’ for four option six months at $28,000 per day, plus the 2006-built Aframax ‘Affinity’ for three, option three months at $17,000 per day. 

 

Navig8 was said to have fixed the 2004-built Suezmax ‘Astro Polaris’ for 12 months at $21,000 per day, while Petro Barbero was said to have taken the 2007-built MR ‘Nave Equinox’ for 12 months at $11,750 per day.

 

In the S&P market, Indian-based AZA Shipping was reported as the buyer of the 2001-built Aframax ‘Thera’ for $16.5 mill, while the 2015-built MR ‘Amor’ was believed to have changed hands for $32.8 mill.

The Petroleum Industry Revived; Largest Oil Deposit Discovered in Texas

Oil Reserve found in America

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http://www.natureworldnews.com/articles/32097/20161117/texas-petroleum-permian-basin-petroleum-industry-oil-discovered-in-america-america-oil-petroleum-in-texas-texas-oil-deposit-permian-basin-oil-deposit-oil-and-gas-industry-oil-oil-news-wolf.htm 

What is claimed to be the largest deposit of untapped oil was discovered in the US, according to the US Geological Survey (USGS). Found in the Midland Basin part of the famous Permian Basin in Texas, not only does it have recoverable natural oil, it could also provide massive amounts of natural gas. The discovery could not only generate roughly 20 billion barrels of oil but also provide an average of 1.6 billion barrels of natural gas liquids.

Though this untapped reserve may be recoverable, it will take very intricate measures to extract it. According to the USGS, a process called slant drilling and hydraulic fracturing are the probable means of recovery, both of which are advanced.

The Permian Basin, home to the Wolfcamp Shale, includes a variety of geological formations in West Texas and Southern New Mexico. In 2013, another petroleum reserve has also been discovered in this area.

Business Insider reported that this is historic news as continuous discoveries of enormous petroleum deposits indicates that there may be more yet to be uncovered. With the petroleum industry expected to boom once again, this might as well be very good news for America as they could become exporters to their neighbouring countries.

Discovery of the largest oil deposit in America may be their most economic game-changer. This year, the world has seen an incredible decline in the prices of petrol, and economists have warned that there are possibilities for it to soar once again. Having an impressively large recoverable field of natural gas and recoverable oil in Texas will lessen oil exports and thus further reduce the price of petrol for consumers.  

However, since it has only been discovered, there will be time consumed to extract and process these oil. It might take years before the actual benefits may be realized. Federal authorities hope that this would bring about the resurgence of the oil and gas industry, providing the jobs lost when the industry once tumbled.

Ghana’s daily oil production to reach 240,000 barrels by 2020

 

http://www.businessghana.com/site/news/business/137848/Ghana%E2%80%99s-daily-oil-production-to-reach-240,000 

Ghana’s daily oil production will reach 240,000 barrels by 2020, Mr Michael Aryeetey, Chief Operating Officer of Ghana National Petroleum Corporation (GNPC) Exploration and Production Company Limited (Explorco) has said.

He said this would be attained, when the three oil fields would then be at their apex production; adding: "This is good news for all stakeholders including the people of Ghana."“However, this trend will not last if investment into the industry stalls, pace of exploration reduces, we do not find more oil and gas, and we do not commercialise our finds,” Mr Aryeetey stated in Accra at the Seventh College of Basic and Applied Sciences, University of Ghana, Public Lecture.

He said currently about 50 per cent of the sedimentary basin offshore was open with very little activity; adding that the Voltaian basin with a size of about 103,000 square kilometres, and currently undergoing some level of exploration, led by GNPC.

Mr Aryeetey said the basin would also be available for licensing to investors in the next two years or so.“Offshore Ghana still host a number of stranded or captured resources which cannot be commercialised on their own. It is important that going forward, all stakeholders come together and find ways through which these resources can be commercialized either together or in clusters,” he said.

He said: “Ghana’s oil reserves currently stand at 1.27 billion oil equivalent. This is relatively small compared to Nigeria’s 40 billion barrels of oil equivalent.“With almost 200 million barrels already produced, we must all work together to improve our replacement ratio by finding and developing more resources.”

He said it was the expectation that even though oil prices generally continue the downward pressure in response to higher supply against lower demand, when the problem was resolved in the country’s favour, Ghana would continue to attract serious and well established oil companies who would work with GNPC and Explorco to ensure that an aggressive exploration and development activities in the basins were sustained.

“This is key for us because increased exploration, development and production activities will lead to increased work load and demand for local participation and use of local goods and services,” Mr Aryeetey said.

“Increased industry activities in Ghana also present opportunities for improving infrastructure and facilitate continuous operations thereby ensuring that our government revenues are sustained and citizens remain in jobs to promote economic growth,” he stated.The GNPC was established by the GNPC Law 1983 (PNDC Law 64), with the primary object of undertaking the exploration, development, production and disposal of petroleum.

GNPC started operations in 1985.

The Corporation is an anchor partner in all upstream operations and currently has stakes in 18 Petroleum Blocks and is the Operator of the Voltaian Basin.GNPC is also the National Gas Aggregator.

Oil Trader Andurand Says OPEC Cut Likely, $70 in Sight for 2017

Pierre Andurand

http://www.bloomberg.com/news/articles/2016-11-14/oil-trader-andurand-says-opec-cut-likely-70-in-sight-for-2017

• Supply glut that hammered prices is gone, trader says in note
• ‘The noise surrounding negotiations is often misinterpreted’

Hedge fund manager Pierre Andurand says OPEC is still likely to agree on an output freeze this month and prompt a sharp rally in oil prices, despite disputes among its members.

The years-long supply glut that hammered oil prices is gone with no sign that production will grow next year, Andurand said in a note to investors obtained by Bloomberg News. The founder Andurand Capital Management, which oversees $1.4 billion in its main strategy, put the chance of an agreement by the Organization of Petroleum Exporting Countries at 70 percent.

“History has demonstrated that OPEC typically never reaches an agreement before the headlines," wrote Andurand, who won big by predicting the oil market’s downturn in 2014. “Unfortunately, the noise surrounding negotiations is often misinterpreted by the media and most analysts who perceive bargaining techniques as a sign of a deal falling apart."

Oil retreated the past three weeks amid skepticism about OPEC’s ability to implement a freeze at its Nov. 30 meeting in Vienna. Prices closed at an eight-week low of $43.32 a barrel on Monday after Iran said it had increased production at three fields. Failure to reach a deal may drive down prices further amid “relentless global supply growth,” the International Energy Agency said Nov. 10.

Saudi Arabia, OPEC’s biggest producer, wants a deal to boost prices and head off a long-term shortage in supply, Andurand said. A freeze could bump up prices to $55 to $60 a barrel by year’s end, he said. Even without an agreement, prices will “slowly trend upward" towards $60 to $70 by the end of 2017.

The firm’s main fund lost 3 percent in October but is still up 7.8 percent for the year, according to the letter, with both numbers beating returns for the S&P GSCI crude-oil index.

Russia Asserts Role as Germany's Top Oil Supplier in Q1-Q3 With Larger Share

Russian producers have aggressively stepped up their crude oil sales into Germany this year, cementing their pole position with a nearly two-fifth share of import supplies, initial third-quarter data from the Federal Office for Economic Affairs and Export Control (BAFA) indicate.

The European Union's biggest consumer nation bought over January-September 68.03 million mt (close to 500 million bbl) of crude oil from more than 30 other countries, a marginal 0.5% less than a year ago, although the latest available refining data hints to a mild increase in refining activity over the first eight months.

With Russian field operators pumping at their highest rates ever, their deliveries to Germany rose 11.4% (2.71 million mt) year-on-year to 26.52 million mt, aided by equity stakes in several refineries.
Their share in the country's total import portfolio grew by 4.1 percentage points on-year to 39%, in defiance of E.U. sanctions -- triple the share of the second-largest supplier Norway.

Measured against Russia's overall oil liquids production in the first nine months, which the federation's energy ministry put at almost 408 million mt as of Oct. 1, sales into Germany made up 6.5%, a touch above the prior year's 6.1%.

Also grabbing larger market shares in Germany were Kazakhstan and Iraq, which delivered 6.35 million mt (+41% on-year) and 2.38 million mt (+79%) respectively, making up 9.3% and 3.5% of the total.

Volumes also visibly picked up from the United States, with arrivals of 496,000 mt marking a nearly tenfold increase, while Mexico sent 579,000 mt (+46%), Brazil provided 208,000 mt, after a mere 10,000 mt a year earlier, and Turkmenistan delivered 159,000 mt, versus none in 2015.

Although British and Azeri crude oil continued to rank among the fifth-largest sources, deliveries were slightly lower. They eased from Britain by 1% to 7.66 million mt and from Azerbaijan by 3.3% to 4.06 million mt.

The main losers in Germany's purchasing portfolio reshuffle were Norway, Nigeria and North Africa.
Purchases from Norway dropped by a sharp 16% (1.61 million mt) to 8.35 million mt, squeezing its share to 12.3% from 14.6% a year before, even though the Norwegian Petroleum Directorate reported rising crude oil output over the first nine months.

Nigerian arrivals plummeted to 2.84 million mt from over 5.0 million mt in the prior year, after several unplanned disruptions dented Bonny Light, Forcados and Qua Iboe exports in the reporting period. As a result, Nigeria's share shrank to 4.2% from 7.3%.

The fragile nature of North African production meant that inflows from Egypt nearly halved to 1.27 million mt, from Libya slumped by 44% to 1.1 million mt and from Algeria plunged one-fifth to 2.12 million mt.

Arrivals from Saudi Arabia continued to trend downward, falling nearly one-quarter to 694,000 mt.
Among smaller-volume providers, more cargoes were shipped from Angola (+35% to 436,000 mt), the Ivory Coast (+31% to 424,000 mt), Italy (+76% to 179,000 mt), Kuwait (+52% to 153,000 mt) and Canada, which supplied 32,000 mt after none in the prior year.

Conversely, volumes were reduced from Colombia (halved to 228,000 mt), Venezuela (9,000 mt from 109,000 mt) and, more locally, from Denmark (-17% to 449,000 mt), the Netherlands (-28% to 234,000 mt) and Estonia (-73% to 39,000 mt).

The average crude oil import price for delivery to the German border came in the first three quarters of the year to 271.52 euros/mt, down from 374.94 euros/mt a year ago, according to BAFA data. Buyers paid 301.34 euros/mt on average in September.

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Markets - VLCCs rates peaked

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8126

After the rush of activity last week, the market appeared to have peaked as MEG activity slowed. 

 

The November loading programme is almost finished with only a handful of cargoes possibly left for the very end of the month, Fearnleys reported.

Charterers were in no rush to fix their requirements and those that are trying to conclude business are attempting to shave off last done levels.

Most were waiting for the BOT stem confirmations, due at the end this week and volumes in the first decade will probably determining the market’s further direction.

The Atlantic remained steady, with vessels being fixed ex West Africa, UK/Cont and Caribs at basically last done levels.

Suezmaxes trading in West Africa experienced another week of weaker sentiment and more available tonnage was added to the list.

The recent attacks on the Forcados pipeline, in combination with the already difficult supply situation in Nigeria, did not help rates in the area.

In addition, the Med/Black Sea Suezmax list of available ships grew longer last week and with few cargoes left to cover in the 3rd decade and Turkish straits delays at a minimum, rates softened.

Aframaxes in the North Sea and Baltic experienced a sudden upswing in rates. This firm momentum will continue into 3rd decade November, due to a very tight tonnage list.

Both North Sea and Baltic cargoes were seeking the same vessels and this, coupled with a continued floating storage scenario, added to the upward pressure on rates.

In line with their northern counterparts, the Med and Black Sea are gearing up for a rate party, Fearnleys said.

The firmer market started with tonnage ballasting north and transatlantic for better returns, resulting in a day of high activity with 19 ships fixed on subs.

The first major hike was a WS7.5 point rise from last done ex Black Sea. However, at the time of writing (Wednesday), another rate boost was on the cards and a jump of a minimum of WS15 points by the end of this week, is probable, Fearnleys concluded.

In other chartering news, Teekay Offshore has signed a new three-year firm shuttle tanker contract of affreighment (CoA) with BP for North Sea operations.

BP is the operator of the new FPSO ‘Glen Lyon’, which will be positioned on the redeveloped Schiehallion oil field, west of Shetland in the UK sector of the North Sea.

A consortium called Schiehallion co-venturers, consisting of BP, Shell and OMV Group, is the owner of the new FPSO and the Schiehallion and Loyal fields.

Once fully operational, the ‘Glen Lyon’ FPSO will have a production capacity of up to 130,000 barrels per day with storage capacity of up to 800,000 barrels. The overall volumes expected to be lifted equal to 50-70 round trip voyages per year.

The three-year contract, plus extension options, is expected to commence in the first quarter of 2017 and is estimated to keep two vessels from Teekay Offshore’s existing North Sea shuttle tanker fleet fully utilised.

“These contracts further enhance our CoA contract portfolio and are expected to add future cash flow through higher shuttle tanker fleet utilisation without the need for incremental capital expenditures,” said Peter Evensen, Teekay’s outgoing president and CEO.

Meanwhile, brokers have reported that Trafigura had fixed the 1999-built VLCC ‘Ashna’ for three, option three months at $34,000 per day.

The 2008-built MRs ‘Hellas Explorer’ and ‘Hellas Enterprise’ were believed fixed for $11,500 per day each for six months, plus an option for a further six months, at $12,250 per day.  

Another MR, the 2006-built ‘Advance II’ was reported as relet to Maersk for six months at $12,500per day.

Newbuilding order continued to trickle in. Among the latest reported was Vision Shipping’s contract at Sungdong for one, option one, LR2 for around $45 mill.

Japanese interests were believed to have ordered two LR1s at Tsuneishi for 2018-2019 deliveries. Not other details were available.

Furetank and Älvtank have extend their orders for intermediate product/chemical tankers fitted with LNG propulsion units by one each at Avic Dingheng Shipbuilding. The latest vessels will be delivered during 2018/2019.

Together with the previous order, Gothia Tanker Alliance now has six tankers on order - Furetank has three, Älvtank two and Thun Tankers one vessel.      

The vessels will be commercially managed by Furetank Chartering in the Gothia Tanker Alliance. 

In the S&P market, Ship Finance has confirmed the sale of the 1998-built VLCC ‘Front Century’ to Hong Kong Chinese interests, identified at Kunlun, for $18.7 mill probably for conversion purposes and has cancelled the charter with Frontline.

The charter is due to terminate in the first quarter of next year and Frontline has agreed a compensation payment to Ship Finance of about $4 mill for the charter’s termination.

"Fleet renewal is an important part of Frontline's long-term strategy, due to the fact that older vessels are becoming increasingly difficult to trade," explained Robert Hvide Macleod, Frontline Management CEO.

Following this transaction, the number of vessels on charter from Ship Finance will be reduced to 12 vessels, including 10 VLCCs and two Suezmaxes.

In other news, brokers reported that the 2000-built Aframax ‘Seafaith II’ had been sold to Indonesian interests for $12 mill.

Great Eastern was said to have purchased two 2011-2012 Aframaxes - ‘Phoenix Beacon’ and ‘Phoenix Concord’.

Chilean interests were thought to have purchased the Ice Class 1A LR1 ‘Ice Base’ for $18 mill, while Middle East buyers were thought to be behind the purchase of the 1994-built Handysize ‘Santrina’ for $5.2 mill.

IEA Raises Forecast for Non-OPEC Oil Output Growth Next Year

http://www.bloomberg.com/news/articles/2016-11-10/iea-raises-forecast-for-non-opec-oil-production-growth-next-year

• Estimate increased by 110,000 barrels a day to almost 500,000
• Agency cites improved outlook for Russian production

The International Energy Agency increased its estimate of oil production from countries outside OPEC next year, citing an improved outlook for Russia.

Supply growth from nations outside the Organization of Petroleum Exporting Countries will be “just shy” of 500,000 barrels a day, an increase of 110,000 from the agency’s forecast last month, it said Thursday. Russian production is likely to grow by 190,000 barrels a day, building on a 230,000-barrel increase in 2016.

Swelling output from non-OPEC countries including Russia, Brazil and Kazakhstan presents a challenge for the 14-member exporters’ group, which meets at the end of November to hammer out the details of a production cut to buoy prices. While Russia has said it will consider joining an OPEC agreement, its own output has climbed to a post-Soviet record.

Brazil is set to increase production by 280,000 barrels a day next year, while Canadian output will rise by 225,000 barrels and Kazakh supply by 160,000, the Paris-based IEA forecast in its monthly report. Non-OPEC supply will total 57.2 million barrels a day.

“This means that 2017 could be another year of relentless global supply growth similar to that seen in 2016,” IEA said.

While non-OPEC production is likely to drop by 900,000 barrels a day this year, it rose by almost 500,000 a day last month as new fields started, according to the agency. Maintenance and unscheduled shutdowns, especially in the North Sea, had curbed production in September. Kazakhstan’s giant Kashagan field boosted output in October after coming online the previous month, and oil-loading schedules suggest North Sea production also rebounded.

OPEC Policy

OPEC, led by Saudi Arabia, decided in November 2014 against curtailing production to support oil prices and instead pump at capacity to increase market share. This drove crude to a 12-year low in January this year and pushed high-cost U.S. production down. Following more than two years of low prices, OPEC reversed its policy in September, saying it would cut production for the first time in eight years.

 

The consequent rally in prices brought back some U.S. drilling. In October, 14 out of a total 25 oil rigs returning to service were added in the Permian shale basin, where production rates are beating expectations, the IEA said. Output in the Bakken and Eagle Ford shales isn’t as strong, and the IEA sees U.S. crude supply declining “modestly” in 2017.

Total U.S. oil and natural-gas liquids production will shrink by 465,000 barrels a day this year to 12.5 million barrels, and stay around this level in 2017, the agency forecasts.

Congrats President Elect - Donald J Trump!

Election Day jitters send oil prices slightly lower

http://www.upi.com/Election-Day-jitters-send-oil-prices-slightly-lower/8861478614273/?spt=slh&or=6

Crude oil prices drifted lower in early Tuesday trading as investors fled to safe-haven assets on a U.S. Election Day marked by OPEC market factors.

Crude oil prices, along with major stock indices, moved sharply higher in Monday trading as investors grew confident that former U.S. Secretary of State Hillary Clinton, the Democrats' candidate for president, would beat rival Republican Donald Trump.

Early polling data Tuesday show Clinton with an advantage, though this year's election season has surprised many analysts because of the campaign tenor and the high degree of frustration among American voters.

Trump is politically untested and analysis from S&P Global Platts found crude oil prices lost 15 percent in the days following the first election of Bill Clinton to the White House in the 1990s because he was untested economically. Trump strongly favors increased U.S. oil production and his policies could favor the supply-side trends that helped push crude oil prices below $30 per barrel early this year.

Though U.S. oil production has declined in recent months, suppliers like those in the Organization of Petroleum Exporting Countries are producing at or near record levels. In its global outlook report, OPEC said Tuesday demand for its crude oil should improve as the economy stabilizes.

"The demand for OPEC crude expands to 41 million barrels per day by 2040, with the estimated share of OPEC crude in total liquids supply increasing to 37 percent, from 34 percent in 2015," the report said.

The 14-member production group said there should be a relative balance between supply and demand over next two years, but supplies could rebound after 2018.

The price for Brent crude oil was down 0.6 percent in early trading Tuesday to $45.85 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was off 0.6 percent from the previous close to $44.61 per barrel.

Speaking from Abu Dhabi, OPEC Secretary General Mohammad Sanusi Barkindo offered somewhat competing statements on the market outlook. OPEC members are working to coordinate around a production ceiling proposed in September and he said Thursday that commitments were firm so far.

On the supply side, he said output from non-OPEC members could build through the 2030s, but then start to decline.

"It means that in the long-term it is OPEC that will be required to meet much of the expected additional demand," he said.

Energy Giant Shell Says Oil Demand Could Peak in Just Five Years

Royal Dutch Shell Plc, the world’s second-biggest energy company by market value, thinks demand for oil could peak in as little as five years, a rare statement in an industry that commonly forecasts decades of growth.

“We’ve long been of the opinion that demand will peak before supply,” Chief Financial Officer Simon Henry said on a conference call on Tuesday. “And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.”

Shell’s view puts it at odds with some of its biggest competitors. Exxon Mobil Corp., the largest publicly traded oil company, said in its annual outlook that “global demand for oil and other liquids is projected to rise by about 20 percent from 2014 to 2040.” Saudi Arabia, the biggest producer, with enough reserves to last it 70 years, has said demand will continue to grow, boosted by consumption in emerging markets.

If renewable energy and other disruptive technologies such as electric cars continue their rapid advance, petroleum use will reach its maximum level in 2030, the World Energy Council has forecast. Michael Liebreich, founder of Bloomberg New Energy Finance, predicts a peak in 2025 and decline in the 2030s.

“For the first time, oil companies have to think seriously about the future,” Alastair Syme, an oil analyst at Citigroup Inc. in London, said by phone. Drillers that even a couple of years ago believed “every molecule of oil we produce will have a market,” have come to realize they “can afford to bring on only the most competitive assets.”

Gas, Biofuels

Shell will be in business for “many decades to come” because it is focusing more on natural gas and expanding its new-energy businesses including biofuels and hydrogen, Henry said.

“Even if oil demand declines, its replacements will be in products that we are very well placed to supply one way or the other, so we need to be the energy major of the 2050s,” Henry said. “That underpins our strategic thinking. It’s part of the switch to gas, it’s part of what we do in biofuels, both now and in the future.”

Shell sees “oil and gas as being part of the energy mix for many decades to come,” it said in a statement Wednesday.

The Anglo-Dutch company bought BG Group Plc for $54 billion this year in a move it said was partly aimed at increasing its gas business. Gas made up about 48 percent of the company’s total production in the third quarter ended Sept. 30, according to data compiled by Bloomberg. U.K. competitor BP Plc had 38 percent gas, including from units, in the period.

The anticipated increase in oil demand of about 20 million barrels a day over the next two decades will probably be big enough to overwhelm the impact of the electric car, Spencer Dale, chief economist for BP, said Oct. 11. Those vehicles will have a bigger impact in 30 to 50 years, although there’s a chance it could happen sooner, he said.

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Active week for VLCCs

http://www.tankeroperator.com/ViewNews.aspx?NewsID=8109

A very active week for VLCCs, mainly in the MEG. Rates edged up ex MEG for both East and West but not to the extent some had expected, due to the high activity. 

 

Charterers stretched well forward on dates, anticipating near term firming rates.

Ships are still plentiful, hence competition is strong for new business and it appeared that rates were flattening, as some owners chose to secure present levels, Fearnleys reported.

West Africa/East was not as active as the MEG, but December dates are now in play and here rates may also have reached a peak for now.

Suezmaxes found little respite in West Africa as tonnage built up with East ballasters swelling the list. TD20 flirted with mid WS50s before stabilising at the WS57.5 level. Even replacement cargoes comfortably achieved last done levels.

The Black Sea retreated from its recent highs as a quiet Med market added tonnage to the list. TD6 rates fell by almost 10 points to WS70. Owners will be looking to the third decade in West Africa for much needed momentum, but with a quiet Med market this coming week, they have little to grip onto.

The Black Sea has yet to find its bottom level but charterers were aggressively pulling it towards the mid WS60’s. As predicted last week, the North Sea and Baltic experienced softer rates. However, for the time being it seems like the bottom has been reached.

Going forward, we believe rates will stabilise around current levels, before firming up again for third decade fixing. In the Med and Black Sea, we saw some lower rates fixed cross-Med at the beginning of the week.

However, a busy Black Sea programme helped shorten the position list during the last couple of days, and as owners are feeling they have the momentum on their side, we expect rates to move towards mid WS70s by the end of this week, Fearnleys concluded. 

Elsewhere, Petrobras has said it plans to cancel orders for 17 vessels, including tankers.  

“We decided to revoke the contracts for those ships,” Antonio Silvino, head of Petrobras’ shipping operation -Transpetro - told the media during a presentation at the recent Rio Oil & Gas Conference.

The cancellations mark the unravelling of Brazil’s PROMEF project, which was designed to revive the country’s shipbuilding industry and replace Petrobras rather elderly fleet, during the country’s oil and commodities boom, which has since ground to a halt.

The cancellations are believed to represent more than a third of the 46 ships ordered by Transpetro under the programme, starting in 2003.

Silvino said this move to cancel contracts does not necessarily mean it will operate with a reduced fleet. He said the company is evaluating options to increase the number of ships chartered to Petrobras. Transpetro also plans to offer services for other companies, he said.

In the newbuilding sector, there were a few more orders reported.

These included Maersk Tankers reportedly contracting six, option six, Aframaxes at Dalian for $42 mill each for 2018-2019 delivery. According to brokers’ reports, the deal is subject to board approval expected to be given by early next year.

Bihar Navigation was said to have ordered two,option two Aframaxes for $41 mill each at New Times, plus two, option two MRs from the same yard at $35 mill each, all for 2018 delivery.

Odfjell has confirmed an order for what are claimed to be the world’s largest stainless steel chemical tankers.

An earlier LOI for four 49,000 dwt vessels at China Shipbuilding Trading and Hudong-Zonghua Shipbuilding has now been turned into a firm order, which now also includes a further four options.

They will have a cargo capacity of 54,600 cu m. The first vessel is expected to be delivered in June, 2019 and the following vessels at three months intervals. The capital commitments will be $60 mill per vessel, Odfjell said.

Kristian Mørch, Odfjell CEO, commented; "We are very happy with the agreement we have signed today, which is a significant step in solving our tonnage replacement needs.

“The vessels will be the most efficient stainless steel chemical tankers available and the vessels are designed to be good for the environment, good for our customers and a good investment for our shareholders," he said.

Concordia Maritime is to sell a second tanker on a sale and leaseback basis.

The Suezmax ‘Stena Supreme’ is to be sold to one of Japan’s largest shipowning companies and senior debt funding will be provided by one of Japan’s mega banks. The transaction is scheduled to be completed later this month.

‘Stena Supreme’ will be chartered back on a bareboat basis for 12 years, with annual re-purchase options from year three onwards.

The sale will give an accounting profit of about $1.8 mill and a positive liquidity effect of around $22 mill, Concordia said.

“We are very happy with the agreement. It’s a good price, while the leaseback arrangement means that we can continue employing ‘Stena Supreme’ in the successful Stena Sonangol Suezmax pool for many years to come.

“Just as with ‘Stena Image’, the transaction is a way of preparing ourselves for a subdued market situation and good business opportunities that may arise. We are not sitting still, but are actively working on the fleet’s structure and disposition,” explained Kim Ullman,  Concordia Maritime CEO.

“With the agreement, we are taking a further step into the Japanese financing market. Once again, the terms of the transaction are highly competitive and the agreement will have a substantial positive cash effect for us. We have now conducted two transactions in a short space of time and we are continuously evaluating the possibility of similar arrangements,” said Ola Helgesson, Concordia Maritime CFO.

Fearnley Securities has acted as financial advisor to Concordia Maritime for the transaction.

Capital Product Partners has purchased the MR ‘Amor’ from its sponsor, Capital Maritime & Trading Corp.

The 2015-built tanker, built by Samsung Heavy Industries, was acquired for $32.8 mill on 24^th October, Capital said.

‘Amor’ is currently operating under a under a two year timecharter to Cargill at a gross daily rate of $17,500. The Cargill charter commenced in October, 2015.

Capital Product Partners said that the aggregate price was met by a $15.8 mill term loan under a new credit facility with ING Bank, $16 mill in cash and an issuance of new common units to Capital Maritime.

Euronav has confirmed it is to buy out its 50% joint venture partner to take full control of the 2005-built VLCC ‘VK Eddie’.

Euronav will buy the vessel from the joint venture company Oak Maritime (Canada) for $39 mill and will receive back 50% of the proceeds.

The Antwerp-based company was also rumoured to have bought the converted VLCC ‘Madison Orca’ for an undisclosed sum. She was built as a VLOC in 2010 and converted to a tanker in China.

Teekay Tankers was believed to have sold the 2002-built Suezmaxes ‘Ganges Spirit’ and ’Yamuna Spirit’ to Greece-based New Shipping for $16.2 mill each.

Two Aframaxes reportedly changed hands. The 2002-built ‘Siena’ was believed sold to Bakri Navigation for $15 mill, while the 2002-built ‘Morning.

In other transactions reported by broking sources, the 2010-built MR ‘Pacific Marchioness’ was sold to Kasuga Shipping for $19.7 mill, while her near sister ‘Pacific Duchess’ was thought taken by Waikoh Kisen for $18.3 mill. A previous sale was believed to have failed.

Reported to be leaving the fleet was the US-controlled 1983-built MR ‘Charleston’ thought sold to Indian breakers.

In the charter market, ENI was believed to have taken the 2000-built VLCC ‘New Diamond’ for six, option six months at $31,500 per day.

ExxonMobil was said to have fixed the 2006-built LR2 ‘Donegal Spirit’ for 12 months at $17,250 per day.

In the MR segment, Navig8 was said to have fixed the 2008-built sisters ‘Ocean Breeze’ and ‘Ocean Princess 1’ for six, option six, months for $10,500 per day each.

Finally, Asahi Tankers reportedly fixed the MRs ‘FPMC 26’ (built 2011); ‘Axel’ (built 2010) and ‘Orient Sunshine’ (built 2008) on subs for two years at $13,000 per day each.