Go with the Flow

Today we take a look at what's moving

Let’s briefly take a look at some crude and products flows, trying to identify if anything stands out. Crude and product seaborne trades have been following a slight but constant decrease in terms of volumes, ton miles and number of liftings. China weakness explains this partially, Europe, OPEC, Russia… they are all pointing to a contraction YTD, but the Atlantic basin was providing some support, until a couple of months ago.

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Crude Oil

Starting with a snapshot of barrels in transit, is pretty stable but we are still in the 1000s levels.. the same as in summer, where by now we should be in the 1100s Mb floating, by year end, if Saudis & co start pumping 200kbd more we should be there by mid December. For now, as it has been for much of the year we are at the mercy of the Arbs, if they remain shut or briefly open all trade will be kept regional.

Oil in transit by Region - Kpler

Starting with the obvious, China is not picking up pace. I thought they would be back on the buying side for end of year deliveries, with Yulong refinery starting up, the taxation scheme on fuel oils for feedstock, etc.. and for the most part there was some heptic activity in late September from Unipec and friends but then they went on holiday for the Golden Week and it looks like they never came back. I saw Unipec and Petrochina flipping term cargoes in Dubai, reduced allocations from Aramco, the picture looks very gloomy.. if we have October below 10Mnbbl/d of monthly crude imports that would send an horrific message to the market. Not liking this at all

Daily Crude oil imports China

This whole thing in the Middle East proved to be just a glitch for Iran, they are back loading and waiting for the strike.

Iran crude and condensate exports

USGC is back above 4Mnbpd, with Europe taking 200kbd more than last month. This look counterintuitive because the arb is completely closed right now, but most of these cargoes were traded 20 days to a month ago, when the arb was permissive. This is also what is pressing down North Sea differentials. What’s different is that the mix includes more heavier sours (Mars, Canadian) those grades were (and still are) cheap.