(Bloomberg) — The outlook for oil prices and Chinese demand, the longevity of OPEC+ supply curbs, and rising flows of Iranian crude are among the key topics at Asia’s biggest gathering of the industry’s traders and executives, which entered its second day in Singapore.
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Attendees at APPEC by S&P Global Commodity Insights will also have an opportunity to reflect on Russia’s war in Ukraine, and the transition away from fossil fuels in the transport sector. Meanwhile, the Gastech 2023 conference also kicked off in the city-state on Tuesday. All times are local.
50 Million Tons of LNG Diverted to Europe (4:01 p.m.)
Vitol Group Chief Executive Officer Russell Hardy said 50 million tons of liquefied natural gas will be diverted to Europe in 2023, meaning demand in Asia is still far from recovering to 2021 levels.
LNG spot prices will be at $13-$15 per million British thermal units this winter, which is still relatively expensive compared to coal, he said at Gastech. “Europe is going to pay for that gas,” he added.
Shell Says Calcasieu Pass Delay ‘Not Credible’ (3:58 p.m.)
It’s “not credible” for Venture Global LNG Inc. to operate its Calcasieu Pass liquefied natural gas export plant in the US for over a year above nameplate capacity and not start commercial operations, Steve Hill, an executive vice-president at Shell Plc, said at Gastech.
“If contracts are seen as options, then buyers simply won’t sign them,” he said. Venture Global hasn’t supplied cargoes to foundation buyers, Hill added.
BPCL Can Pay for Russian Crude in Dirhams (1:51 p.m.)
India’s Bharat Petroleum Corp. has flexibility in making payments for Russian crude in currencies other than US dollars, including dirhams, should prices fluctuate, Manoj Heda, the company’s executive director of international trade, said on the sidelines of APPEC by S&P Global Commodity Insights.
Russian crude prices have risen alongside oil benchmarks like Brent, although Heda didn’t elaborate on exact levels. Most of the payments for imports of Russian oil are still done in US dollars, he said.
Gunvor Says Oil Rally at Risk on Weak Demand (1:28 p.m.)
Oil’s sharp rally since late June could be erased in the next six months as weakening demand takes over from supply cuts as the main market driver, according to Gunvor Group Ltd.
There’s a risk of a “significant correction” in the fourth quarter or first three months of next year and Brent crude could test $71 to $72 a barrel in the next six months, Frederic Lasserre, global head of research and analysis at the energy trader, said in an interview on the sidelines of APPEC. “It’s very possible even without much change in fundamentals or balances.”
Chevron Sees More Volatility Ahead in LNG Market (1:18 p.m.)
Liquefied natural gas markets face a few more years of volatility until new production projects begin meaningfully adding to seaborne volumes, Colin Parfitt, Chevron Corp. vice president of midstream, said on the sidelines of the Gastech conference.
The industry’s latest export projects in the US Gulf coast and Qatar are likely to be delivering to market from around 2026 to 2027 onwards, Parfitt said Tuesday in a Bloomberg Television interview. “You probably have to go two or three years down the line from here to get more supply into the market,” he said in Singapore.
Though Europe’s gas storage is at record levels and mild winters in key regions have cooled demand, Chevron remains cautious on the short-term outlook. “We set ourselves up this year — depending on what winter is like — for more volatility,” Parfitt said.
Phillips 66: Refining ‘Crying Out’ for Investment (12:10 p.m.)
The refining system is “crying out” for fresh investments with oil demand still growing, especially in Asia, Sri Paravaikkarasu, the director of market analysis for Phillips 66 International Trading Pte, said at APPEC.
Demand growth for traditional liquid fuels is still happening and refiners need to cater to it, while also accounting for the green energy transition, she said, adding that there’s been a lot of unplanned outages this year.
PetroChina Moves Into Power, Carbon Trade (11:33 a.m.)
PetroChina Co. has begun trading electricity and carbon emissions as it seeks to build on surging profits from its merchant arm. In addition to its entry into the new markets, the company is trying to enhance its automation and digital capabilities to create more value, Zhang Yaoyu, the firm’s head of LNG trading, said in an interview with Bloomberg TV on the sidelines of Gastech.
China’s gas demand will likely increase about 3% to 6% this year, Zhang said. Last year consumption slipped for the first time in decades amid Covid-19 lockdowns and high global prices. “China needs more gas,” he said.
Iran’s Exports Likely Peaked (9:28 p.m., Monday)
Iran’s oil exports, which have been rising following secret diplomacy with the US, are likely to have peaked for this year as demand in Asia wanes with the end of summer, according to people with knowledge of the country’s sales.
The Islamic Republic has found new buyers in smaller private refiners in China looking for supply following OPEC+ production cuts, the people said, asking not to be identified because the information is private. But seasonal maintenance at plants is likely to crimp demand, they said.
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