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INSIDE OIL
Wednesday, December 24, 2014
Futures (Front month)
Price
Net Change Pct change
Asia Cash Prices
NYMEX light crude
$57.12
$1.86
3.3%
Dubai Crude
NYMEX RBOB gasoline
$1.5704
$0.0354
2.3%
Tokyo Naphtha (Ts)
2.0%
Gasoline (92 RON)
NYMEX heating oil
$1.9907
$0.0393
ICE Brent crude
$61.69
$1.58
2.6%
Diesel (0.5 pct)
ICE gas oil
$550.50
$2.50
0.5%
Jet-Kerosene
DME Oman crude
NYMEX Natgas
$58.42
$3.171
$0.77
$0.027
1.3%
0.9%
CHART OF THE DAY
Click on the chart for full-size image
Fuel Oil (180 cst)
Fuel Oil (380 cst)
Price
$56.00
$487.50
$66.40
$72.32
$74.65
$326.10
$318.50
Net Change Differential
Diff Change
-$2.60
2.37
$0.46
-$24.50
-5.00
$0.00
-$2.60
14.46
$0.12
-$1.92
-0.80
$0.05
-$1.99
-0.35
$0.05
-$16.55
2.85
$0.00
-$19.65
3.05
$0.05
OIL ANALYTICS:JANUARY FUEL OIL FLOWS
ASSESSMENT; 5.13 MILLION MT
Arbitrage Weekly: Jan vols pegged 14.4% higher on month at 5.13
mln mt
Thomson Reuters Oil Research and Forecasts have provisionally
assessed January fuel oil flows into East Asia at 5.13 million mt, up
14.4% from December arrivals and well above the 2014 monthly average of 4.18 million mt.
To read more click here
TODAY’S MARKETS
MARKET NEWS
 Third-quarter U.S. economic growth strongest in 11
years
 EXCLUSIVE-Arab OPEC sources see oil back above
$70 by end
 Iraq's oil exports rise in December towards record
 Oil drop a mixed blessing for U.S. corporate results
 Crude oil seen stored on tankers in 2015 as contango
widens
 POLL-U.S. crude and distillate stocks likely fell last
week, gasoline up
 Lower oil price "double-edged sword" for energy-hungry
Egypt
 Russian sees 2014 crude oil exports down 4.3 pct
OIL: Oil rose by more than $2 a barrel on Tuesday, rallying for a second time in three days, after data showing the fastest rate of U.S. economic growth in 11 years bolstered expectations for crude demand."I
was kind of surprised that we rose that much, though the GDP data
was good, as fundamentally, nothing has changed much in the oil supply situation," said Joseph Posillico, senior vice president of energy
futures at Jefferies in New York.
FOREX: The dollar hovered at its highest in nearly nine years against a
basket of major currencies after stunningly strong U.S. economic
growth spurred markets to bring forward the timing of a likely hike in
interest rates. The dollar index reached highs not seen since April 2006
as the greenback popped up to 120.82 yen and the euro sank to a fresh
28-month low of $1.2165.
GLOBAL MARKETS: Japanese stocks rallied and the dollar stood tall
thanks to surprisingly robust U.S. economic growth, helping investors
head into the Christmas holidays in a more relaxed mood after the
global markets turbulence of the past two weeks. Risk appetite got a
helping hand from revised data showing the U.S. economy grew at a
5.0 percent clip in the third quarter, its quickest pace in 11 years and
the strongest sign yet that growth has decisively shifted into higher
gear.
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE
CLICK HERE FOR TECHNICAL CHARTS
EVENTS TO WATCH TODAY (GMT)
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U.S. MORTGAGE MARKET INDEX WEEKLY (1200)
U.S. MBA PURCHASE INDEX WEEKLY (1200)
U.S. INITIAL JOBLESS CLAIMS WEEKLY (1330)
U.S. EIA WEEKLY CRUDE STOCKS WEEKLY (1530)
U.S. EIA WEEKLY DIST. STOCKS WEEKLY (1530)
U.S. EIA WEEKLY GASOLINE STK WEEKLY (1530)
U.S. NAT GAS-EIA, CHANGE BCF WEEKLY (1700)
INSIDE OIL
December 24, 2014
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE (1630 UKT)
ICE BRENT FUTURES FORWARD
ICE Brent Fut. Fwd Curve
DUBAI SWAPS FORWARD CURVE
1M - 1Y 1M
Yield
68.38
68.00
Dubai Swaps Fwd Curve
1M - 1Y 1M
Yield
65.40
63.00
66.00
64.00
60.00
62.00
60.00
.12
1M 2M
3M
4M
5M
6M
7M
8M
9M
10M
57.00
.12
1Y 1M
1M 2M
FO180 FOB CARGO SG FWD CURVE
FO180 FOB Cargo SG Fwd Curve
3M
4M
5M
6M
7M
8M
9M
10M
1Y 1M
FO3.5% BARGES ARA FORWARD CURVE
2M - 2M
Yield
345.75
345.00
FO3.5% Barges ARA Fwd Curve
1M - 1Y 1M
Yield
315.75
315.00
340.00
310.00
335.00
305.00
330.00
300.00
295.00
325.00
.12
.12
2M
1M 2M
FO380 FOB CARGO SG FORWARD CURVE
FO380 FOB Cargo SG Fwd Curve
3M
4M
5M
1M - 1Y 1M
Yield
338.00
335.00
6M
7M
8M
9M
10M
4M
5M
6M
7M
8M
9M
10M
1Y 1M
NAPHTHA CFR JAPAN FORWARD CURVE
Naphtha CFR Japan Fwd Curve
2M - 2M
Yield
532.00
530.00
330.00
520.00
325.00
510.00
320.00
500.00
.12
1M 2M
3M
.12
1Y 1M
2M
2
INSIDE OIL
December 24, 2014
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE (1630 UKT)
NAPHTHA CIF NWE FORWARD CURVE
Naphtha CIF NWE Fwd Curve
NAPHTHA FOB SG FWD CURVE
1M - 1Y 1M
Yield
509.25
510.00
Naphtha FOB SG Fwd Curve
500.00
56.00
490.00
55.00
480.00
54.00
470.00
.12
1M 2M
3M
4M
5M
6M
7M
8M
9M
10M
53.00
.12
1Y 1M
2M
ICE GO FUT. FWD CURVE
ICE GO Fut. Fwd Curve
3M
GO FOB CARGO SG FORWARD CURVE
2M - 2M
Yield
561.00
560.00
GO FOB Cargo SG Fwd Curve
2M - 3M
Yield
78.66
78.00
77.00
556.00
76.00
75.00
552.00
74.00
.12
.12
2M
2M
JET FUEL FOB CARGO SG FWD CURVE
Jet Fuel FOB Cargo SG Fwd Curve
2M - 3M
Yield
57.13
57.00
7M - 7M
Yield
80.61
80.00
78.00
76.00
.12
7M
3
3M
INSIDE OIL
December 24, 2014
MARKET NEWS
EXCLUSIVE-Arab OPEC sources see oil back above $70 by
end
Third-quarter U.S. economic growth strongest in 11 years
The U.S. economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that
growth has decisively shifted into higher gear.
Some of the strength appears to have been sustained, with
other data on Tuesday showing consumer spending rising solidly in November, offsetting surprisingly weak durable goods
orders.
The reports further set the U.S. economy apart from the rest of
the world, where growth is sputtering or activity shrinking.
"Our economy is firing on most cylinders, whereas the global
economy is essentially in dire need of a spark," said Ryan
Sweet, a senior economist at Moody's Analytics in West Chester Pennsylvania.
In revising up its third-quarter gross domestic product estimate,
the Commerce Department cited stronger consumer and business spending than previously assumed. It was the fastest
pace since the third quarter of 2003.
Arab OPEC producers expect global oil prices to rebound to
between $70 and $80 a barrel by the end of next year as a
global economic recovery revives demand, OPEC delegates
said this week in the first indication of where the group expects
oil markets to stabilise in the medium term.
The delegates, some of which are from core Gulf OPEC producing countries, said they may not see - and some may not even
welcome now - a return to $100 any time soon. Once deemed a
“fair” price by many major producers, $100 a barrel crude is
encouraging too much new production from high cost producers
outside the exporting group, some sources say.
But they believe that once the breakneck growth of high cost
producers such as U.S. shale patch slows and lower prices begin to stimulate demand, oil prices could begin finding a new
equilibrium by the end of 2015 – even in the absence of any
production cuts by OPEC, something that has been repeatedly
ruled out.
Iraq's oil exports rise in December towards record
Oil drop a mixed blessing for U.S. corporate results
Iraq's oil exports are rising in December towards a record high,
according to loading data and industry sources, as OPEC's
second-largest producer pumps more despite oil prices trading
near a five-year low.
The increase will add to ample supplies and may worry other
members of the Organization of the Petroleum Exporting Countries unable to expand exports and suffering a drop in oil income after a near 50 percent drop in prices since June.
Exports from Iraq's southern terminals have averaged at least
2.60 million barrels per day (bpd), according to shipping data
for the first 23 days of December tracked by Reuters. Two industry sources who monitor the exports had similar estimates.
"This is looking very strong - massive volumes," said an industry source, who saw southern flows rise as high as 2.80 million
bpd for part of the month.
The sharp decline in oil prices has taken a toll on earnings estimates for the U.S. energy sector, but investors expecting a
benefit to other sectors of the market may be disappointed,
Thomson Reuters research shows.
Certain retailers have shown improvement in results as fuel
costs have declined, while industrials and materials companies
tend to show their results decline even as energy prices fall.
Airlines, generally thought of as a possible beneficiary of lower
fuel costs, show little correlation between that decline and their
results, Thomson found.
The oil rout has been responsible for the sharp fall in energy
sector estimates. S&P energy earnings are seen shrinking by
19.5 percent, while on Oct. 1, a rise of 6.4 percent was expected.
POLL-U.S. crude and distillate stocks likely fell last week,
gasoline up
Crude oil seen stored on tankers in 2015 as contango
widens
U.S. commercial crude oil and distillate inventories were forecast to have fallen in the week ended Dec. 19, while gasoline
stocks inched up, an expanded Reuters survey showed on
Tuesday.
The poll of seven analysts - taken ahead of weekly inventory
reports from the American Petroleum Institute (API), an industry
group, and the U.S. Department of Energy's Energy Information
Administration (EIA) - forecast crude stocks fell 2.3 million barrels, on average, last week.
Stocks of distillates, which include heating oil and diesel fuel,
dropped 900,000 barrels last week, and gasoline inventories
inched up 600,000 million barrels.
U.S. crude stocks fell less than expected in the week ended
Dec. 12, while gasoline stocks increased and distillate inventories declined, data from the Energy Information Administration
showed.
Global oil traders are likely to store crude in tankers next year,
as a widening contango makes large-scale storage at sea profitable for the first time since the financial crisis more than five
years ago, industry sources said.
Oil prices have plunged nearly 50 percent since June due to a
global supply glut, but the economics for storing crude at sea
have mostly remained unfavourable.
However, with Brent for prompt delivery dropping sharply versus later contracts in the past week, traders are increasingly
requesting to lease vessels for storage.
This market structure, known as contango, allows traders to
lock-in profits by buying oil now and selling it forward for later
delivery, as long as the costs of storage are low enough.
4
INSIDE OIL
December 24, 2014
MARKET NEWS
Russian sees 2014 crude oil exports down 4.3 pct
Lower oil price "double-edged sword" for energy-hungry
Egypt
Russia's oil exports are expected to fall by 4.3 percent this year,
Energy Minister Alexander Novak said on Tuesday, citing preliminary data.
He said oil exports will be 229 million tonnes (4.6 million barrels
per day), while natural gas production will fall by 4 percent to
641 billion cubic metres (bcm) and exports by 6.7 percent to
183.3 bcm.
Russia, one of the world's top oil producers, has been cutting
crude exports in recent years due to rising domestic demand
and refining volumes.
Novak said that crude oil output will edge up 0.6 percent to
526.6 million tonnes, in what would be a post-Soviet record
high. Output may edge down to 525 million tonnes next year, he
added.
The fall in global oil prices will cut Egypt's fuel subsidy bill but
could hit the finances of oil-exporting Gulf allies who have
showered it with billions of dollars in aid.
Oil has dropped dramatically over the past six months, with
Brent crude trading at $60.87 a barrel on Tuesday, down 47
percent from this year's peak just over $115 in June.
If it stays at that level, the government expects to save 30 billion Egyptian pounds($4.2 billion) on fuel subsidies for its 86
million people in the 2014-15 fiscal year. But that is less than
half the total Gulf aid it received in the last fiscal year alone.
"This is a double-edged sword," said Justin Dargin, a Middle
East energy expert at the Oxford Institute for Energy Studies.
5
INSIDE OIL
December 24, 2014
ANALYTIC CHARTS
Daily NYMEX Crude - 30 Min
Daily ICE Brent Crude - 30 Min
Daily ICE Gas Oil - 30 Min
Daily NYMEX RBOB Gasoline - 30 Min
Daily ICE Heating Oil - 30 Min
Daily NYMEX Heating Oil - 30 Min
(Inside Oil is compiled by Atiqul Habib in Bangalore)
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