Category:

China Makes More Gasoline, Less Diesel as Auto Sales Rise

Prompted by accelerating auto sales , China’s oil refiners are ramping up gasoline output at the expense of diesel. The production shift away from the diesel used by trucks, power generators and farm vehicles in favor of the gasoline used by passenger autos coincides with a national drive to improve fuel standards and so curb vehicle emissions. Sharply higher motor-vehicle sales are one reason pollution is so bad in many of the Chinas cities. Vehicle emissions contribute as much as 30% of the fine particulate matter known as PM2.5—which is considered particularly hazardous—in urban air. Chinese motor-vehicle sales in 2013 were up 14% from 2012, the biggest increase in three years, according to the government-backed China Association of Automobile Manufacturers. Sales totaled nearly 22 million vehicles—including almost 18 million passenger cars, up 16%. Passenger-car sales have traditionally supported China’s gasoline demand, which was up 12% in the first 11 […]

Posted On : Published By : Tom Whipple
Category:

China Cites Lapses in Sinopec Pipeline Blasts

China’s work safety agency on Thursday blamed the country’s largest refining company and local officials in the city of Qingdao for pipeline explosions in November that killed 62 people and left 136 more injured. Huang Yi, a spokesman for the State Administration of Work Safety said at a news conference that the initial oil leak at the pipeline wasn’t properly inspected and that both the pipeline’s operator and local government departments bore responsibility for the explosions. Mr. Huang said the initial emergency response was "inadequate" and that workers on the scene failed to detect lingering oil and gas in the eight-hour period between the initial leak and the explosions. The pipeline is owned by China Petrochemical Corp., known as Sinopec Group. The transcript of the news conference released by the safety agency didn’t mention Sinopec by name, but the official Xinhua news agency said the regulator blamed both Sinopec […]

Posted On : Published By : Tom Whipple
Category:

Caribbean Oil-Tanker Rates Surge as Libya Seen Disrupting Trade

The cost of hauling Caribbean oil to the U.S. surged to a five-year high amid speculation the region’s vessel supply is being diminished by months of delays to Libyan crude exports that are altering trade flows. Aframaxes hauling 70,000 metric-ton cargoes on the route earned $83,205 a day yesterday, the most since December 2008, according to the Baltic Exchange in London . Larger Suezmaxes departed the region to meet rising demand for West African oil shipments to Europe , George Los, senior market analyst at Charles R. Weber Co., a shipbroker in Greenwich, Connecticut , said by phone. That trade-route expansion helped Europe’s refineries cover a shortfall in Libyan crude, he said. The rates surge shows how parts of the tanker market are recovering from a slump after the industry’s biggest vessels earned the most in 3 1/2 years at the end of 2013, according to Baltic Exchange data. […]

Posted On : Published By : Tom Whipple
Category:

Ethanol Discount Shrinks as Snow Delays Deliveries

Ethanol’s discount to gasoline narrowed as ice and snow are slow railroad deliveries across North America. The discount to the motor fuel tightened 2.57 cents to 71.76 cents as ethanol deliveries by rail are taking twice as long as normal, according to Chad Conn, a vice president of operations for Franklin, Tennessee-based Eco-Energy Inc. “Logistical issues are playing a role in the surprising firmness of the market,” said Sean Wever, a biofuels broker at Green Key Markets LLC in Chicago . Denatured ethanol for February delivery gained 1.2 cents, or 0.6 percent, to settle at $1.925 a gallon on the Chicago Board of Trade. Prices have dropped 14 percent in the past year. The cold snap pummeled energy infrastructure and prompted railroad companies BNSF Railway Co., Union Pacific Corp. and Norfolk Southern Corp. to warn customers earlier this week to expect delays. About 70 percent of U.S.’s ethanol is […]

Posted On : Published By : Tom Whipple
Category:

Oil-by-rail deliveries up for week ending Jan. 2, rail group says

U.S. rail delivery of petroleum and petroleum products was up 20.2 percent last week from the same period in 2013, the American Association of Railroads said. The AAR said Thursday 13,967 carloads of petroleum and petroleum products, or about 9.77 million barrels of oil, were delivered on the U.S. rail system for the week ending Jan. 2. An accelerating pace of oil production in the United States has placed a burden on pipeline capacity, industry officials say. U.S. oil production has increased, in part, because of gains from states including Texas and North Dakota. Last year, the U.S. Energy Information Administration said U.S. oil production was 7.5 million barrels per day, a 1 million bpd increase from the previous year. AAR Senior Vice President John Gray said a mixed report for the delivery of other commodity groups, including grain and non-metallic minerals, indicate the […]

Posted On : Published By : Tom Whipple
Category:

Critical energy concerns wane as arctic cold fades

– A call to conserve energy expired for U.S. consumers digging out after a severe winter blast strained the region’s energy grid, a utility company said. The Weather Channel forecast a steady warming trend beginning Thursday. That follows an arctic blast brought on by a weather phenomenon known as a polar vortex, which pushed temperatures well below the freezing point in U.S. states east of the Mississippi River. PJM Interconnection, a company operating the electric grid for more than a dozen Midwest and mid-Atlantic states, lifted a call for conservation Wednesday as the cold spell began to moderate. The company, which services more than 61 million people, said its grid was strained by the intense cold weather. Several natural gas-fired plants reported issues, though PJM said that represented a "relatively small percentage" of energy problems blamed on the extreme cold. The company said […]

Posted On : Published By : Tom Whipple
Category:

U.S. rig count increased in December

HOUSTON, Jan. 9 (UPI) — Oil service company Baker Hughes Inc. said the number of active drilling rigs working in the United States in December was up 15 from the previous month. Baker Hughes said in its monthly report on rig activity there were 1,771 rigs working in the United States. That’s an increase of 15 from November but down 13 from December 2012. The U.S. Energy Information Administration, a division of the Energy Department, said in a short-term market report Tuesday total U.S. crude oil production in 2013 averaged 7.5 million barrels per day, a 1 million bpd increase from the previous year. In 2014, the United States should produce 8.5 million bpd. The 9.5 million bpd expected in 2015 would break a record set in 1972, EIA said. New drilling technologies used in shale formations in the United States are credited with the increase in oil production. […]

Posted On : Published By : Tom Whipple
Category:

U.S. Gas Output at Record High, but Growth Pace Slows

Natural gas output in the U.S. is hitting record levels, but there is mounting evidence that the best days of the shale boom are over. Government data released Tuesday show production climbed to 70.21 billion cubic feet in 2013. Output grew by just 1.5% from 2012, the slowest rate since output fell in 2005, before widespread use of new drilling technologies began to unlock massive quantities of natural gas from shale rock formations. The EIA is projecting output to rise by 2.1% in 2014 and 1.3% in 2015. The slowdown has major implications for gas prices. As abundant supplies flooded the market, benchmark U.S. gas prices have fallen, averaging $3.20 per million British thermal units over the past five years, down from close to $9/mmBtu in 2008. Sustained bouts of cold weather this winter have eroded supplies, spiking prices to two-and- a-half-year highs near $4.50/mmBtu recently. […]

Posted On : Published By : Tom Whipple
Category:

Coal-related chemical spill prompts state of emergency in West Virginia

West Virginia Gov. Earl Ray Tomblin declared a state of emergency for nine counties Thursday night because of a chemical spill into the Elk River in Charleston, advising residents not to drink, bathe, cook or wash clothes in the water and to only use it for flushing. The chemical, used in the coal preparation process, leaked from a tank at Freedom Industries and overran a containment area on Thursday. Freedom Industries did not immediately respond for comment. The amount that spilled isn’t immediately known. West Virginia American Water has a treatment plant nearby. The company’s president, Jeff McIntyre, said the advisory affects up to 100,000 customers. "The water has been contaminated," said Tomblin, who didn’t know how long the emergency declaration would last. It includes includes West Virginia American Water customers in Boone, Cabell, Clay, Jackson, Kanawha, Lincoln, Logan, Putnam, and Roane counties. Tomblin said the advisory also extends to restaurants, hospitals, nursing homes and other […]

Posted On : Published By : Tom Whipple
Category:

Frozen US Midwest refineries find upside in stronger margins

US Midwest refining margins largely rebounded this week amid a surge in regional gasoline prices, after a cold snap cut production at some area refineries. Cracking margins for West Texas Intermediate were around $18.37/b Wednesday, up from just $12.86/b Friday. West Texas Sour cracking margins rose to $18.54/b Wednesday, up from $12.76/b. Coking margins for both crudes showed a similar increase. Article continues below… Request a free trial of: Oilgram News Oilgram News Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more Request a trial to Oilgram News Request More Information Platts’ margin calculations reflect the difference between a crude’s netback and its spot price. Netbacks are based on […]

Posted On : Published By : Tom Whipple