Articolo_Petrolio

Friday

Jan. 30, 2015

www.bloombergbriefs.com

UBS Sees Risk of Oil Super-Contango as Storage Fills BY GRANT SMITH

The highest U.S. crude production and stockpiles in more than 30 years helped push

oil prices down for the most consecutive months on record.

With little sign of rapid production cut backs from the word's largest producers, Commercial crude stocks in OECD countries are set to rise further and could reach on-

land capacity limits at the end of 1H15, UBS wrote in an e-mailed report.

Once storage tanks filled "more-expensive storage options such as oil tankers would

be needed to store excess supplies. In such a case, the forward curve would move into "supercontago," UBS said in the report, published today.

Brent futures have slumped 13 percent in January, a seventh monthly drop that caps

the longest slide since the contract began trading in 1988. U.S. crude inventories and

production both rose last week to the highest level since the Energy Information Administration began collecting weekly data in the early 1980s.

Weve seen continued, massive stock builds, Torbjoern Kjus, an analyst at DNB

ASA in Oslo, said. The market is still oversupplied and people are very insecure on

whats going to happen. People have realized now that Saudi Arabia and core OPEC are

not going to step in by cutting back their own production.

OIL WATCHKen Cohen @KenPCohen

Despite numerous reviews & clean

bills-of-health, there's still no

indication #KXL will be approvedif

at all. exxonmobil.co/1BA1OBTDetails

"As five studies and 17,000 pages of scientific review have led the U.S. State Department to conclude, Keystone XL can be built and operated with minimal environmental impact."

Russ Girling, CEO, Transcanada, after the

U.S. Senate voted to approve his company's

$8 billion pipeline project

QUOTE OF THE DAY

1:00 p.m.: Baker Hughes rig count

3:30 p.m.: CFTC Commitments of

Traders report All times eastern

TODAY'S EVENTS

62-36 Result of the Keystone XL

Senate vote held on Jan. 29

NUMBER OF THE DAY

MARKET CALLS. U.S. crude

production is to peak at 9.6 million

barrels a day in 1H 2015: Macquarie

INSIGHT. Oil production in Nigeria

and Iraq is safe from insurgencies

TODAY'S NEWS. Chevron indicates

its Capex for 2015 will be $35 billion,

down from $40.3 billion in 2014

INSIDE

TWEET OF THE DAY

Mediterranean Offshore Oil Storage Growth Outpacing China

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Pagina 1 di 10Bloomberg Briefs

30/01/2015http://newsletters.briefs.blpprofessional.com/document/Q-pb3Uqs6iRQ1wuYXuwpPQ--_48z...

INSIGHT - GEOPOLITICS BY CHRISTOPHER SELL, BLOOMBERG BRIEF EDITOR

Oil Safe From Islamist Insurgencies in Nigeria and Iraq

Output in Iraq and Nigeria, totaling

around 5.6 million barrels a day, will

remain unaffected by violent extremist fighting that has so far been confined well

outside oil production facilities. Militants

are unlikely to make inroads to major oil

centers where they have little support, according to Julian Lee, Bloomberg Oil

Strategist.

Iraq, OPECs second-largest producer, is scaling up output to record levels

despite skirmishes in northern Kirkuk

region.Islamic State Iraqi HQ at Mosul is 485-

miles from the heart of Iraqs oil

operations at Basra.The two countries face similar internal

armed conflict. Islamic State declared a

caliphate in northern Iraq and Syria, and Boko Haram has done the same in

northern Nigeria.

Nigeria, Africas largest oil producer,

goes to the polls next month to elect a

new president. Boko Haram HQ at Gwoza is around 625 miles from the center of

Nigerias oil production at Port Harcourt.

Like Iraq, Nigeria is ethnically and

religiously divided, said Lee. Iraq is predominantly Shia Islamic in the south,

Sunni Islamic in the north and the west

and Kurdish in the north-east. Nigeria is mostly Christian in the south and Muslim

in the north.

Iraq Is OPEC's Second Largest Producer

Source: Bloomberg

Nigeria is Africa's Largest Oil Producer

Source: Bloomberg



INSIGHT - U.S. IMPORTS BY VINCENT G. PIAZZA & SYARIFA GALEB, BLOOMBERG INTELLIGENCE ANALYSTS

Saudi Arabia Cedes U.S. Oil Import Share as Neighbors GainU.S. crude oil imports averaged 7.4

million barrels a day in the week ended Jan. 23, up 204,000 from the prior week.

Mexican, Venezuelan and Columbian oil

blends temporarily gained share while Canadian imports dropped to about 2.9

million barrels and Saudi Arabian flows

fell to 669,000 from more than 1 million.

Oil net imports are expected to average 6.4 million a day in 2015. The average fell

400,000 barrels to 7.4 million in 2014 as

U.S. output rose by 1 million.

Saudi Tonnes Are Being Replaced By Local Product



REFINERY OUTAGES

South Koreas S-Oil plans 2015

maintenance at No. 2 and 3 crude-

distillation units, and No. 1 and 2 residue-hydro desulferisation units. The refiners

crude units operated at an average of

92.8 percent in 4Q, up from 92.6 percent

in 3Q, according to an earnings statement on the company's website.

Heesu Lee

Phillips 66's refinery in southern

California is running a hydrocracker at

reduced rates and slowing operations at a

fluid catalytic cracker, a person familiar with operations at the plant said.

Lynn Doan and Jessica Summers

Chevron is to shut its Cape Town

refinery from Feb.13 to March 31 for

annual maintenance and safety

inspection, the company said in a statement.

Kevin Crowley

PDVSA said this year it will conduct

general maintenance on processing units,

flare headers, boilers, docks and storage

tanks at the Paraguana refining complex,

citing companys refining vice president

Jesus Luongo. The maintenance will require 4,300 workers.

Jose Orozco

The BP-Husky Toledo refinery is said

to have remained down through to at

least late Friday for repairs. The 135,000

barrel-a-day refinery was forced to shut the fluid catalytic cracker after a valve

broke, according to a person familiar with

repairs. Lynn Doan

Current and Planned Refinery Outages



TODAY'S OIL NEWS

Libyas oil refineries are processing around 150,000 barrels a day, Mashallah Zwai, oil

minister for Libyas Islamist-backed govervment, said in an interview late Thursday in

Tripoli. The Zawiya facility is processing 110,000 barrels a day while Tobruk is handling 20,000 and Brega and Sarir are both at 9,000. Libyas largest refinery at Ras Lanuf is

closed. Es Sider oil port has 2.5 million barrels in storage tanks, and Ras Lanuf has 2

million barrels, he added.

Saleh Sarrar

Chevron indicates its Capex for 2015 will be $35 billion, down from $40.3 billion in

2014.

Brad Skillman

Arbitrage flow from the Atlantic Basin to U.S., which picked up momentum two weeks ago, has slowed amid the widening Brent-WTI spread, according to a survey of five

traders and analysis of tanker fixtures. The Brent-WTI spread blowing out to more than

$4 is making it difficult for the transAtlantic arb to work, said Bloomberg oil strategist Julian Lee.

Sherry Su

OPEC shipments, excluding cargoes from Ecuador and Angola, are to increase

350,000 barrels a day to 24.4 million barrels in the four weeks to Feb. 14, Oil

Movements said in a report. The levels were boosted by the final stage of winter

demand, Oil Movements founder Roy Mason said.

Grant Smith

Iraq is to boost Kirkuk February crude exports to 271,429 barrels a day, according to a preliminary loading program obtained by Bloomberg News. January exports stood at

2511,613 barrel.

Sherry Su

Statoil, Norways biggest oil company, isnt planning any wells in the Barents Sea this

year, another sign explorers are turning away from the Arctic region after a plunge in

crude prices. No exploration drilling is planned so far in the Barents Sea in 2015 from our side, Morten Eek, a spokesman for the Stavanger-based company, said in an

e-mail. Statoil will spend this year looking at data assembled during a record 12-well

campaign in the Barents Sea in 2013 and 2014, he said.

Mikael Holter

The plunge in crude prices to below $50 a barrel has curbed oil and gas explorers plans for drilling in Namibia next year, the countrys petroleum commissioner said. We

have at least three majors which have indicated to us that they will be drilling in 2016,

Immanuel Mulunga said by phone on Thursday from the capital, Windhoek. I am more

confident of three instead of five or six announced last year, he said. While Namibia was

interesting to explorers way before oil rose to $100 a barrel, the current trend is worrying, Mulunga said.

Felix Njini

Russia's January oil output is unaffected by sanctions, or oil prices. Crude condensate

production is set to reach 45.12 million metric tonnes, or 10.67 million barrels a day this month, according to CDU TEK, for the first 29 days. This compares with 10.66 million

barrels a day in December.

Julian Lee

OPEC output fell to 30.175 million barrels a day in January from 30.32 million in

December, according to JBC Energy. Libya was the main cause of lower OPEC output,

declining 100,000 barrels a day to 300,000 barrel, it said.

Grant Smith

The Republican-controlled U.S.

Senate passed a bill to approve the Keystone XL pipeline, setting up a

conflict with President Barack Obama

who has promised a veto.

The Senate voted 62-36 Thursday for the measure that would circumvent

the administration review in progress

for six years. Nine Democrats joined Republicans who backed the

measure. Obama has said he wants

to wait until the review is completed before deciding on whether to

approve construction of the pipeline.

Differences with a version passed 266-153 by the House on Jan. 9 must

be resolved before the legislation is

sent to Obama, but supporters pledged to work through those quickly

and send a final version to the

president.

This is about energy, jobs, economic activity, national security

and building the right kind of

infrastructure we need, Senator

Hoeven, a North Dakota Republican

and bill sponsor, said after the vote.

The bill was the first taken up by the new, Republican-led Senate.

Lawmakers who back Keystone have

sought for years to force Obamas hand only to be turned away in the

Senate when Democrats were in

control. The Thursday vote was less than two-thirds majority needed to

override a presidential veto.

Backers say the project would create jobs and increase U.S. energy

security by tightening ties with

Canada, where the proposed

TransCanada Corp. pipeline would originate.

TransCanada is encouraged by

the strong bipartisan support for

Keystone XL by U.S. lawmakers, Russ Girling, the chief executive of

the Calgary-based pipeline company, said in a statement.

White House press secretary Josh

Earnest Thursday reiterated that Obama would veto the Keystone

legislation. Jim Snyder and Kathleen Hunter

Senate Republicans Pass

Keystone Bill



OIL SPEAK

MARKET CALLS

U.S. crude production is to peak at 9.6 million barrels a day in 1H 2015, then stabilize

for rest of year, falling short of the previous forecast of 10.1 million barrels a day, Vikas

Dwivedi, global oil and gas strategist with Macquarie Group, said at the Argus

Americas Crude Summit 2015 conference in Houston. No growth is likely in November

and December.

Sheela Tobben

WAF to Asia crude arbitrage window is to widen on better economics. February loading WAF exports to Asia fell to a four-month low of 1.73 million barrels a day but

should increase to more than 1.8 million barrels in the next two months, as arbitrage

economics have improved by around $2.37 a barrel.

Bernard Leung, Bloomber oil strategist

WHAT TO READ

Iraq failed to capitalize on a period of

relative stability and growing oil reserves, according to a new report by the World

Bank. Between 2007-2012, Iraq experienced rapid economic growth

fueled by an expansion of oil reserves

and the restoration of relative peace in

many parts of the country. In The

Unfulfilled Promise of Oil and Growth

World Bank argues that fundamental

developmental challenges remained

largely unaddressed during this period. Instead oil revenues were redistributed

through public sector employment and

earnings.

TECHNICAL ANALYSIS

West Texas Intermediate Crude Seen Falling in Analyst Survey

WTI crude futures may fall next week, according to a Bloomberg survey.Twenty-three of 42 analysts, or 55 percent, forecast WTI will decline

through Feb. 6; eight respondents, or 19 percent, predict a gain; 11 see prices little changed. WTI -$1.06, or 2.3 percent, to $44.53 a barrel in

the first four days this week on Nymex.

Mark Shenk



ENERGY WATCH GUEST COMMENTARY BY RINEESH BANSAL AND STUART KIRK, DEUTSCHE BANK

Forget Oil Supply and Demand Fundamentals, It's all About the WeatherWhat explains last years 45 percent

rout in the oil price the second worst annual decline in 30 years? Global output

growth around 3.5 percent should have

added around 1.5 million barrels per day to demand which is in-line with last years

production increase. A rising dollar had

an impact but oil priced in other

currencies also fell. Nor are the themes of U.S. shale, weaker Chinese growth or

Middle-East politics particularly new.

Going beyond the usual reasons a more radical hypothesis is presented here: the

weather is to blame.

Last year was the hottest ever recorded. Moreover China and the U.S.,

accounting for half the planets carbon

dioxide emissions, agreed to a climate deal in November raising hopes for a

global agreement at the United Nations

conference in Paris this year. And a deal with stringent emission limits will mean

the entirety of the worlds known fossil

fuel reserves cannot be extracted and

burned. Such a conclusion changes the nature of oil from being a scarce

commodity that increases in value with

time, to a perishable good governed by use it or lose it dynamics. Peak carbon

rather than peak oil becomes the primary

driver of oil prices. The 2010 UN Climate Conference

agreed to restrict global warming to 2

degrees Celsius relative to the pre-industrial period. The Intergovernmental

Panel on Climate Change estimates that

to achieve this with two-thirds probability, CO2 emissions need to be restricted

below 1,000 gigatonnes. The current

emission rate of 55 gigatonne per annum

exhausts this limit in two decades well before the world runs out of fossil fuels.

Any number of unforeseen factors may

prevent this scenario from unfolding but

investors should at least consider the

implications of peak carbon. One is clear: oil demand has to come

down over time. By International Energy

Agency estimates oil consumption needs

to decline 0.5 percent a year, compared

with a 1.5 percent annual increase of the

last two decades. The recent U.S.-China climate deal also requires a similar

reduction in their oil demand. A lot of the

billion new cars coming on road by 2035

will have to be electric!

While oil has seen

volatility in the past, its

defining characteristic

of being a supply-

constrained scarce

commodity has

remained unchanged.

Secondly, consider fossil-fuel reserves.

The world is sitting on over 50 years of

reserves for both oil and gas and over a centurys production of coal. Oil reserves

have doubled in the last 30 years as the

industry replenishes them faster than production. Burning all these reserves

would release CO2 emissions amounting

to 2.5-times the available budget of 1,000 Gt. To meet climate change targets over

half the proven fossil-fuel reserves have

to stay where they are underground.Under this use it or lose it dynamic,

OPECs refusal to cut production seems

perfectly rational. With much less flexibility to shift revenue over time,

maximizing production before the peak-

carbon deadline is what matters. Expect OPEC taps to stay fully turned on as

members rush to monetize their reserves

worth over a centurys production. The

bonanza of lower oil prices for the West comes at the expense of renewed over-

reliance on Middle East oil.

What about oil companies? The industry spent $650 billion on exploration

and development last year two-thirds

of total upstream spending. That number has increased six fold since 2000 after

adjusting for inflation and is producing

diminishing marginal returns. The finding and development costs for the big-seven

oil majors trebled over a decade to $30 a

barrel of oil equivalent. In comparison, their operating production cost (excluding

taxes and royalties) is just $10 a barrel. If

climate change puts an end to exploring,

marginal costs are closer to the latter number, with obvious implications for oil

prices. And oil left in the ground means a

big chunk of the industrys current net asset value goes with it.

From 2011 to 2013 five percent of

global output was spent on oil, up from just one percent in the late 1990s. While

oil has seen volatility in the past, its

defining characteristic of being a supply-constrained scarce commodity has

remained unchanged. If the world takes

climate change seriously, oil becomes constrained by the demand allowed under

CO2 limits with implications for countries,

companies and consumers alike. Perhaps

last years fall was the first rumbling of this upcoming profound change.



SPOT PRICES

Spreads Benchmarks

Prices as of end of day Jan. 29



Futures Based Swaps

PERIOD WTI BRNT WTI BRNT NYULSD NYULSDWTI NYULSD BRNT NYRB NYRB WTI NYRBBR NYRB ULSD

Bal Mo 44.96 49.38 -4.42 162.12 23.13 18.71 135.97 12.15 7.73

FEB 15 45.16 49.94 -4.78 160.66 22.32 17.54 139.32 13.35 8.58

MAR 15 46.07 50.88 -4.81 158.88 20.66 15.85 160.77 21.46 16.65

APR 15 47.18 51.96 -4.77 159.16 19.67 14.89 162.37 21.01 16.24

Bal Qt 45.40 50.07 -4.67 160.55 22.04 17.37 145.35 15.65 10.98

Q2 15 48.28 52.98 -4.70 160.63 19.18 14.49 162.32 19.89 15.20

Q3 15 51.37 55.72 -4.35 166.85 18.71 14.36 155.63 13.99 9.65

Q4 15 53.75 57.98 -4.23 172.78 18.82 14.59 145.38 7.31 3.08

Bal Yr 49.70 54.19 -4.49 165.20 19.69 15.20 152.17 14.21 9.73

Cal 16 57.77 62.42 -4.65 181.07 18.28 13.63 163.95 11.09 6.44

Cal 17 62.25 67.03 -4.77 192.08 18.42 13.65 165.48 7.25 2.47

Updated 7:30 a.m. New York Time

FUTURES

Swap Curves

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NBP Prompt (GB Pence/Therm)

KEY PRICES TICKER LAST PRICE CHG FROM OPEN LAST TRADE TIME TRADE SOURCE FAIR VALUE

Day Ahead NBPGDAHD Index 47.70 -0.80 13:16:28 ICAS

Feb 15 NBPG1MON Index 46.95 -0.55 13:14:51 EGFI

Sum 15 NBPGS1 Index 42.70 -0.30 09:44:46 SPEC

TTF Dutch Gas (EUR/MWH)

KEY PRICES TICKER LAST PRICE CHG FROM OPEN LAST TRADE TIME TRADE SOURCE FAIR VALUE

Day Ahead TTFGDAHD Index 20.57 -0.43 13:18:26 SPEC

Feb 15 TTFG1MON Index 20.43 -0.32 13:18:44 TNRG

2016 TTFGCY1 Index 20.35 -0.20 13:15:37 SPEC

Supply and Demand

INDICATOR TICKER VALUE 1-DAY CHG

GIE Total EU Gas Storage (MCM) GIEDSTTL Index 50,681.68 -291.31

GIE Total EU Gas Storage (% Full) GIEDFTTL Index 64.55 -0.37

Yesterday UK gas demand (MCM) UGASDEMD Index 289.36 0.00

Dayahead UK forecast gas demand (MCM) UGASFD1D Index 304.70 -16.91

Henry Hub ($/MMBTU)

KEY PRICES TICKER LAST PRICE CHG FROM OPEN LAST TRADE

Spot price NGUSHHUB Index 2.88

MAR 15 NG1 Comdty 2.67 -0.05 13:09:17

APR 15 NG2 Comdty 2.67 -0.04 13:08:39

MAY 15 NG3 Comdty 2.70 -0.05 13:08:16

Supply and Demand

INDICATOR TICKER MMCF/D CHANGE FROM PREVIOUS DAY

Change in total gas storage NAGSTSTO Index -16,801.00 -462.00

Total gas demand NAGSTOTC Index 97,429.00 -1,060.00

INDICATOR TICKER LAST CHANGE

Mont Belvieu LST Propane LPGSMBPP Index 47.13 0.00

Mont Belvieu Non-LST Ethane LPGSMBPE Index 18.50 0.00

Naphtha fob Singapore NAPHSINF Index 48.17 1.39

Source: Bloomberg

GAS PRICES: EUROPE

GAS PRICES: U.S.

GLOBAL LPG PRICING DATA



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