Wednesday, February 26, 2014

Saudi Aramco cuts March propane price to $855/T

State-run Saudi Aramco has cut its March contract price for propane to $855 a tonne, down $115 from the February level, an industry source said on Thursday. Butane prices for March 2014 were also cut to $870 a tonne, down $100 from February level of $970. The prices provide a benchmark against which Middle East sales of liquefied petroleum gas (LPG) to Asia are priced. Following is a table of Saudi Aramco's contract prices of propane and butane per tonne in U.S. dollars. 

Product  March 2014  -  February 2014  Change 
Propane  $855                          $970                  -115
Butane     $870                          $970                 -100


Saudi Arabia February CP Price
The key energy commodity price trends of U.S. in 2013
Japan Energy Report
Saudi Arabia Energy Report
India Energy Report

Tuesday, February 25, 2014

Saudi Arabia CP Propane futures dropped $12 to $868

Ten days left for Saudi Arabia to set the CP price. However propane futures dropped $12 amid Saudi Arabia data release. There is still $102 gap between the February propane CP price($970) and March Swap future($894).  US will export to the Japanese and South Korean LPG markets  2.3 million barrels of US-sourced LPG over March 2014. This is one of the key reasons regarding to this change. The other is colder weather is leaving Japan which will also put pressure on propane futures.

Saudi Arabia 2014 Propane CP Futures

CP Prices

Product  February 2014  -  January 2014  Change 
Propane  $970                          $1010                  -40
Butane     $970                           $1020                   -50


Saudi Aramco February CP Price
Saudi Aramco January CP Price

The key energy commodity price trends of U.S. in 2013

the key energy commodity price trends 2013

During 2013, the prices of various energy commodities increased from 2012 levels or were down modestly as prices of nonenergy commodities generally fell significantly. Average prices for natural gas, western coal, electricity, and WTI crude were all higher in 2013 than in 2012, while the price of North Sea Brent crude oil, various petroleum products, and eastern coal all dropped.

This article provides an overview of a series of related articles. To ensure comparability among commodities, the prices shown here reflect near-month contracts of futures prices. Most other articles in this series focused on spot market trends. Some key findings from these articles include:

Crude oil and petroleum products

Brent crude oil averaged $109 per barrel in 2013, declining for the first time in four years, but marking the third year in a row that the global oil benchmark averaged more than $100 per barrel. Brent prices came under downward pressure as rising U.S. light sweet crude oil production reduced the need for U.S. imports, thereby increasing supplies of Brent-quality crude oil available to the global market.
West Texas Intermediate (WTI) crude oil averaged $98 per barrel in 2013, up 4% from the 2012 and the highest annual average price since 2008. New pipeline and railroad infrastructure alleviated transportation constraints that had put downward pressure on WTI prices.
The national weekly average pump prices for gasoline and diesel fuel during 2013 averaged $3.50 per gallon (down 11 cents from 2012) and $3.92 per gallon (down 5 cents), respectively. For the third year in a row the average price in 2013 for gasoline and diesel failed to drop below $3 per gallon during any week.
The record for the highest gasoline price in EIA's weekly survey in 2013 was not a West Coast city, which is usually the case. Chicago's peak EIA survey price of $4.36 per gallon on June 10 exceeded Los Angeles, where prices reached $4.34 per gallon on February 25.

Average Annual spot prices for Brent and WTI oil

Rising crude oil production in the United States contributed to relatively stable global crude oil prices in 2013, at around the same annual average levels of the previous two years. West Texas Intermediate (WTI) spot prices averaged $98 per barrel (bbl) in 2013, up 4% from 2012 and the highest annual average since 2008. New pipeline and railroad infrastructure alleviated transportation constraints that had put downward pressure on WTI prices. The North Sea Brent spot price averaged $109/bbl, down 3% from 2012. Brent prices came under downward pressure as rising U.S. light sweet crude oil production reduced the need for U.S. imports, thereby increasing supplies of Brent-quality crude oil available to the global market.

wti price 5 year average vs 2013
brent  price 5 year average vs 2013

U.S. highlights

  • Domestic crude oil production increased 1.0 million bbl/d—rising more than the combined increases in the rest of the world—to reach its highest level in 24 years. This increase marked the largest observed annual increase in U.S. history.
  • Production exceeded imports during several weeks for the first time in nearly two decades.
  • Transportation infrastructure improvements enabled crude oil from Cushing, Oklahoma, and the Bakken, Permian, and Eagle Ford tight oil formations, to better reach refineries, reducing the need for foreign crude oil.

Global highlights
  • China accounted for almost one-third of growth in global demand and surpassed the United States to become the world's largest importer of crude oil.
  • EIA estimates that global unplanned supply disruptions averaged 2.6 million bbl/d in 2013, 0.7 million bbl/d higher than the previous year. OPEC (Organization of the Petroleum Exporting Countries) producers had the largest volume outages at 1.8 million bbl/d.
  • Despite significant production disruptions, international crude oil prices were relatively stable last year because higher U.S. production and seasonally elevated Saudi Arabian production (Saudi Arabia maintained peak summer production levels into the fall) offset outages elsewhere.
  • Total liquid fuels production from members of OPEC fell by 0.9 million bbl/d in 2013. Non-OPEC liquid fuels production, concentrated in the United States, grew by more than 1.4 million bbl/d in 2013, more than offsetting the decline in OPEC production.
Total liquid fuel supply capacity growth 2013

Natural Gas

Average wholesale (spot) prices for natural gas increased significantly throughout the United States in 2013 compared to 2012. The average price for natural gas at Henry Hub, the key benchmark location for pricing in the United States, rose 35% to $3.73 per million British thermal units (MMBtu) in 2013.
Spot prices rose at the beginning of 2013 and exceeded $4.00/MMBtu in March, a level not reached since September 2011.
Spot prices decreased beginning in May, and by August had declined to a monthly average of $3.40/MMBtu, before rising back above $4.00/MMBtu by year's end.

Spot natural gas prices US map december 31 2013


Wholesale, on-peak electricity prices across the nation were up from 2012 to 2013, driven largely by increases in spot natural gas prices. The Pacific Northwest and New England had the highest percentage increases in power prices, based on regional supply and demand issues in those markets.
The spring of 2013 was drier than the previous two springs in the Pacific Northwest, which kept wholesale power prices in the region from dropping to levels seen in 2012.
In New England, cold weather taxed the already strained natural gas pipeline infrastructure, leading to day-ahead power prices in excess of $200 per megawatt hour in January and February 2013. Cold weather in late November and early December led to a second spike in both the natural gas and power markets in New England.

Wholesale electricity price map of US

Central Appalachian coal prices trended downwards, Northern Appalachian and Powder River Basin coal prices trended upwards, and Illinois Basin and Rocky Mountain coal prices remained largely unchanged.
Coal exports in the first nine months of 2013 declined by nearly 8 million tons compared to the same period in 2012, following a few years of growth. A weak European economy, slower demand growth in Asia, increased output from other coal-exporting countries, and lower international coal prices all contributed to the decrease in U.S. coal exports.

US weekly spot steam coal prices by basin

Friday, February 21, 2014

Saudi Arabia March Propane futures dropped $30 to $894

Ten days left for Saudi Arabia to set the CP price. However propane futures dropped $30 amid Japanese stock build. There is still $76 gap between the February propane CP price($970) and March Swap future($894).  US will export to the Japanese and South Korean LPG markets  2.3 million barrels of US-sourced LPG over March 2014. This is one of the key reasons regarding to this change. The other is colder weather is leaving Japan which will also put pressure on propane futures.

Saudi Arabia 2014 Propane CP Futures

CP Prices

Product  February 2014  -  January 2014  Change 
Propane  $970                          $1010                  -40
Butane     $970                           $1020                   -50


Saudi Aramco February CP Price
Saudi Aramco January CP Price

Tuesday, February 18, 2014

Major Companies supplying the world oil market

The world oil market is complex. Governments as well as private companies play roles in moving oil from producers to consumers. Government-owned national oil companies (NOCs) control most of the proved oil reserves (85% in 2010) and current production (58% in 2010). International oil companies (IOCs), often well-known stockholder corporations, own the balance of the reserves and produce the remainder of the oil. Proved reserves are the amount of oil in a given area, known with reasonable certainty, that today’s technology can recover cost-effectively. Worldwide proved oil reserves are about 1.5 trillion barrels and production averages roughly 89 million barrels a day.

2012 World proved crude Oil reserves

There are three types of companies that supply crude oil to the world market. Each type has different operational strategies and production-related goals:

  • International oil companies (IOCs), including ExxonMobil, BP, and Royal Dutch Shell are entirely investor-owned and primarily seek to increase shareholder value and make investment decisions based on economic factors. These companies typically move quickly to develop and produce the oil resources available to them and sell their output in the global market. Although these producers are affected by the laws of the countries in which they produce oil, all decisions are ultimately made in the interest of the company, not a government.
  • National oil companies (NOCs) that operate as an extension of the government or a government agency: This category includes Saudi Aramco (Saudi Arabia), Pemex (Mexico), and PdVSA (Venezuela). These companies support their governments' programs financially and/or strategically. They often provide fuels to domestic consumers at prices lower than those in the international markets. These companies do not always have the incentive, means, or intention to develop their reserves at the same pace as the commercial companies. Due to the diverse situations and objectives of the governments of their countries, these NOCs pursue a wide variety of objectives that are not necessarily market-oriented. The objectives NOCs pursue, however, include employing citizens, furthering a government's domestic or foreign policy objectives, generating long-term revenue, and supplying inexpensive domestic energy. All NOCs of the Organization of the Petroleum Exporting Countries (OPEC) members fall into this category.
  • NOCs with strategic and operational autonomy: These NOCs function as corporate entities and do not operate as an extension of the government of their country. This third category includes Petrobras (Brazil) and Statoil (Norway). These companies often balance profit-oriented concerns and the objectives of their country with the development of their corporate strategy. While these companies may support their country's goals, they are primarily commercially driven.

In 2011, 100 companies produced 84% of the world's oil. National oil companies accounted for 58% of the world's production.

Share of world oil production by company

OPEC members seek to work together to influence world oil supplies

The Organization of the Petroleum Exporting Countries (OPEC) is a group of some of the world's most oil-rich countries (see OPEC member countries in the "Did you know?" box). Together, these countries controlled approximately 73% of the world's total proved oil reserves in 2012, and they produced more than 40% of the world's total oil supply that year. Each OPEC country has at least one NOC, but most also allow international oil companies to operate within their borders.

OPEC seeks to manage oil production of its member countries by setting crude oil production targets for each member except Iraq, for which there is no current target. The track record of compliance with OPEC quotas is mixed because production decisions are ultimately in the hands of the individual member countries. In general, there are three main factors that determine OPEC's market power, or how effectively the organization can influence oil prices: (1) how unwilling or unable consumers are to move away from using oil; (2) how competitive non-OPEC producers become as the price of oil increases; and, (3) how efficiently OPEC producers can supply oil compared with non-OPEC producers.

OPEC's oil exports represented about 60% of the total seaborne crude oil traded internationally in 2012, according to data from Lloyd's List Intelligence tanker tracking service. The difference between market demand and oil supplied by non-OPEC sources is often referred to as the call on OPEC. Saudi Arabia, the largest oil producer within OPEC and the world's largest oil exporter, historically has had the largest share of the world's spare production capacity. As a whole, OPEC maintains the world's entire spare capacity for oil production. It is generally not cost-effective for international oil companies to develop and maintain idle spare production capacity, because the IOC business model maximizes revenue by continuing to produce oil as long as the price is higher than the cost of getting an additional barrel of oil to market.

World oil market Spare Capacity and Call on OPEC

EIA defines spare capacity as the volume of oil production that can be brought on line within 30 days and sustained for at least 90 days. Spare capacity can also be thought of as the difference between a country's current production capacity and maximum production capacity. Should a disruption occur, oil producers can use spare capacity to moderate increases in world oil prices by boosting production to offset lost volumes.

Friday, February 14, 2014

WTI will be projected $11 less than Brent in 2014

In the February Short-Term Energy Outlook (STEO), EIA projects that the discount of West Texas Intermediate (WTI) to North Sea Brent crude oil, which averaged $11 per barrel (bbl) in 2013, will average $11/bbl and continue at the same level in 2014 and 2015 . This discount reflects the economics of transporting and processing the growing production of light sweet crude oil in U.S. and Canadian refineries. EIA expects this forecast WTI discount to represent the Light Louisiana Sweet (LLS) discount to Brent minus a pipeline transport cost of approximately $4/bbl from Cushing, Oklahoma to the Gulf Coast.

Brent WTI spread 2014 forecast

The WTI–Brent spread previously represented the cost of moving crude oil on marginal modes of transportation such as railroad and truck from the bottleneck at the Cushing, Oklahoma, hub. However, with adequate pipeline capacity to move crude from Cushing and growing tight oil plays to the Gulf Coast, Gulf Coast refiners have completely backed out imports of light sweet crude. As a result, lower crude prices, previously limited to the Midcontinent, have moved to the Gulf Coast, and they are reflected in the discount of LLS to Brent, which developed in the second half of 2013.

Continuing strong production growth combined with recent infrastructure adjustments will result in more light sweet crude flowing to the Gulf Coast in 2014 and 2015. EIA estimates U.S. crude oil production grew by more than 1 million barrels per day (bbl/d) in 2013, and the majority of this growth was light sweet crude oil from the Bakken, Permian, and Eagle Ford tight oil formations. In the latest STEO, EIA projects that U.S. crude oil production will grow by an additional 1.0 million bbl/d in 2014 and 0.8 million bbl/d in 2015 to reach an average production of 9.2 million bbl/d. Much of this production growth will be in the Gulf Coast or connected to the Gulf Coast region by pipeline.

There are three main recipients for incremental crude production that arrives on the Gulf Coast:• U.S. Gulf Coast refineries
• Canadian refineries via foreign–flagged vessel for holders of export permits
• U.S. East Coast refineries via U.S.–flagged vessels

While shipping additional crude to U.S. and Canadian East Coast refineries, which are better suited to run light sweet crude, will provide an outlet for some production growth, most additional production will be processed in Gulf Coast refineries. Minor capacity increases will help accommodate some of this production growth, notably Kinder Morgan's 100,000-bbl/d condensate splitter in Galena Park, Texas, 50,000 bbl/d of which is scheduled to start up this quarter and the rest in 2015. However, much of the increased production will replace imports of medium and heavy crude, lightening the crude slate of Gulf Coast refiners. The ability to reduce imports further, especially along the Gulf Coast, to offset the expected growth in U.S. supply over the next two years could be limited by refinery partnerships and long-term supply contracts.

With more crude expected to move to the East Coast, and with Gulf Coast refineries expected to increase processing of light sweet crude, the discount of WTI to Brent will reflect the economics of transporting and processing the growing production of light sweet crude oil in U.S. and Canadian refineries. The forecast WTI discounts should continue to encourage rail shipments of light sweet crude from the Bakken formation. Increased volumes of North American crude oil are already moving to refineries in PADD 1 and eastern Canada. Favorable crude oil transportation economics could provide incentive to continue expanding rail capacity to the U.S. East and West coasts and to expand exports from the U.S. Gulf Coast to Canada. These expansions would provide additional outlets for rising U.S. and western Canadian crude oil production. However, even with additional volumes of domestically produced crude oil moving to the East and West coasts, light sweet crude oil supply to the U.S. Gulf Coast will still exceed take-away capacity in the near future.

As a result, larger price discounts for U.S. crude oil production versus alternate world crudes, such as greater WTI and LLS discounts to Brent, may be needed to encourage Gulf Coast refiners to process the increased supplies. Additionally, the price spread between light and heavy crudes in the United States will need to narrow to encourage displacing heavier crudes with increasing volumes of light crude.

Longer term, there are refinery investments to process more light crude and to increase condensate splitter capacity. Some of these upgrades are expected online later this year and into 2015, and they could provide enough capacity to absorb some of the coming supply increase. However, in the short term, WTI's discount to Brent will likely have to widen from its current levels as refinery crude runs decline during the spring maintenance season.

Tuesday, February 4, 2014

New Solar Cell Efficency Record: 44.7%

Together with Soitec, CEA-Leti and the Helmholtz Center Berlin, Fraunhofer Institute for Solar Energy Systems ISE achieved a new world record for the conversion of sunlight into electricity. Record solar cell based on a new solar cell structure with four solar cell part. After little more than three years of research, a new record efficiency of 44.7 percent was measured at a 297-fold concentration of sunlight. This means that 44.7 percent of the total energy in the solar spectrum, is converted into electrical energy from ultraviolet light to longer wavelength thermal radiation. A significant step towards further cost reduction for solar power and on the way to 50 percent of the solar cell.
In May 2013, the Franco-German team of Fraunhofer ISE, Soitec, CEA-Leti and Helmholtz Zentrum Berlin had published a solar cell with 43.6 percent efficiency. Following up led more intensive research and the optimization steps for the present world record of 44.7 percent.
Such solar cells are used in concentrator photovoltaic (CPV), a technology that enables the sunny regions of the world twice as efficient as conventional solar power plants. Coming from space technology, the use of so-called III-V multijunction solar cells has established in order to realize maximum efficiency in the conversion of sunlight into electricity. At multijunction multiple cells from different III-V semiconductor materials are stacked. The individual solar cells absorb different spectral ranges of sunlight.
"We are very happy and proud of our team working on this four-junction solar cell has been working for three years," says Dr. Frank Dimroth - department and project manager for the development project at Fraunhofer ISE. "This four-junction solar cell includes our many years of accumulated knowledge. In addition to improved material and optimized structure plays especially a new method, the wafer bonding, a central role. With this method we combine two semiconductor crystals with one another, do not fit to each other due to different crystal lattice. So we can make the optimum semiconductor combination for highly efficient solar cells. "
"This world record, which allowed us to increase our value by one percentage point in less than four months, the tremendous potential of our quadruple solar cell designs, based on the bonding technique and the experience of Soitec," says AndrĂ© Auberton-HervĂ©, CEO and CEO of Soitec. "It confirms the acceleration of our roadmap to higher efficiencies, a key factor for the competitiveness of our own CPV systems. We are very proud of this result, a proof of a successful cooperation "
"This new record reinforces our approach of bonding technique that we have developed within our collaboration with Soitec and the Fraunhofer ISE. We are very proud of this new result that confirms the chosen path of development of advanced process technology for solar cells made of III-V compound semiconductors, "so Leti CEO Laurent Malians.
Concentrator are sold by Soitec (started in 2005 under the name Concentrix Solar as a spin-off of the Fraunhofer ISE) produces. This highly efficient technology is used in solar power plants in sunny areas of the world with high direct solar radiation. Soitec has, concentrator power plants built in 18 countries, including Italy, France, South Africa, and California.

Monday, February 3, 2014

Saudi Arabia Swap Propane futures drop %3 amid U.S. manufacturing data

Saudi Aramco Swap Futures Prices of Propane drop this week, thus the prices well below the March Propane Contract Price of Saudi Aramco. There is still $74 gap between the February propane CP price($970) and March Swap future($894).

Saudi Arabia 2014 Propane CP Futures

CP Prices

Product  February 2014  -  January 2014  Change 
Propane  $970                          $1010                  -40
Butane     $970                           $1020                   -50


Saudi Aramco February CP Price
Saudi Aramco January CP Price

Iraqi crude oil exports in January fell by 4.8%

Iraqi crude oil exports in January fell by 113,000 b / d or 4.8% from December to 2.228 million b / d , according to data from Iraqi oil wells received late Sunday . The latest export figures is 351,000 b / d reached under current export in August 2013 of 2.579 million b / d high . Exports from southern Iraq fell by 44,000 b / d in January to 2.036 million b / d , while North exports slumped to only 192,000 b / d from 261,000 b / d in December. There were no exports of trucks to Jordan in January because of unrest along the interstate route to Jordan. Iraq has in recent years sent several thousand barrels / day of crude oil to Jordan by truck. 

A recent decline in southern export capacity , connected by a long period of maintenance with a period of bad weather , which lasted eight days in January caused , led to long queues of trucks waiting . invite reports from shipping sources showed that on 1 February a total of 13 tankers waiting for total throughput of around 22 million barrels waiting to load . This represents one-third of the expected export volume in February. The first tankers have to queue , waiting for 17 days. To close this gap , Iraq SOMO has crude oil in February reduced lifting of the expected 70 million barrels to 62.3 million barrels , the nominations for Basra. 

Iraq Oil Exports

 The work on the Basra export terminal to remove dirt, how to delete part of the maintenance work. Show Gulf terminal status reports that one of the four piers in Basra was for the greater part of January inoperative. This led to a reduction in the southern oil export capacity , and by default , the need to be closed in some southern production, estimated by Platts to 450,000 b / d in January. The possible operation of all four fixed fins at Basra and two single point moorings, combined with the beginning of the storage and pumping of the Fao onshore terminal is increased to the southern export capacity of around 2.7 million b / before September to December period of great work, around 3 million b / d by March this year d this is enough to make the planned production and export growth in 2014 expected to handle, according to Iraqi oil experts. 

Production capacity amounted to 3.4 million b / d in December 2013 and will climb to around 3.8 million b / d by the end of this year , though b / d target is still far behind the 4.5 million 2014 laid the Iraq national energy strategy. In the second quarter it was 120,000 b / d of new production from the Lukoil -West Qurna 2 field operated and operated 30,000 b / d of Gazprom Neft Badra - . In addition, around 100,000 b / d incremental production from other producing oil fields in the south , mainly from Halfaya and Rumaila , and the national total should increase d to around 3.6 million b / by mid-2014 . 

Iraq Oil production 

 Based on the January export figures and taking into account the expected internal supply rates to the power plants and refineries , mixed residue rates and adjustment for a decrease in stocks in the South, but an increase in stocks in Ceyhan , estimates Platts Iraqi production in January around 2.95 million b / d This is 52,000 b / d or 1.7% lower than the actual production rate in December 3.002 million b / d , according to the Iraqi oil wells , the volume of crude oil storage tanks in southern stored at the end of January 5.9 million barrels nearby. the available capacity of around 7 million barrels of exports from northern fields through the Turkish Mediterranean port of Ceyhan on average 192,000 b / d in January. -