4 mins read

Market Analysis

Crude Oil

• Brent closed at $53.61/bbl, increase by 5.34% from last Friday closing price.
• Market remained bullish primarily due to news of Saudi Arabia and Russia on extending the production cut by 9 months.
• As per BHI, US rig count increase by 8 and now stand at 901, with oil rigs standing at 720, increase by 8.
• 18^th consecutive week for oil rig number increase, which means increase in production from US.
• In our opinion extending production cut may be short lived due to US production increase, market may again expect deeper cut for crude price sustainability.
• EIA recorded a draw of 1.75 million barrels, a smaller draw. Overall inventories declined for the 6th successive week to the lowest level for 10 weeks.

Natural Gas

• Henry Hub prices moved south by 4.79% during the week.
• Price plunged on Tuesday as investor responded to updated mild weather forecast.
• EIA reported natural gas supplies increased by 65 BCD whereas market was expecting an increase of 61 BCF.
• Limited demand is expected in US due to mild temperature.
• European hub gas prices have made marginal gains, however NBP gained 5.79% on strong demand.
• Germany awarded 870 MW on onshore wind capacity with average price of Euro Cents 5.71/KWH

Currency

• US dollar face pressure on political news and DXY, The US Dollar Index DXY closed at 97.12, down by 0.78%.
• Coming week is important for Dollar as political uncertainty still hovering in US.
• Euro USD soared to $1.119 up by 1.87% from Monday when it closed at $1.098.
• GBP rose by 0.76% since Monday and closed at $1.301 on Friday.

Weather

• Spring season in full swing in North America.
• Asia has entered into summer season, where Indian Subcontinent is ranging between 35^o – 40^o
• India will be entering Monsoon by end May 2017.
• South East Asia and North East Asia around 25^o – 30^o
• Summer in Middle East with temperature soaring to high 30^o
• Europe temperature remained mild from 15^o-20^oC, however cold weather in UK, Norway around 10^o-15^oC.

LNG

• LNG prices remain stable around $5.50/MMBTU mark throughout the week in Asian markets of Japan, Korea and Taiwan.
• Prices in India facing pressure as inventories are high, along with depressed coal prices and arrival of Monsoon season, which will restrict vessel arrival at Dabhol terminal.
• FOB Singapore remained around $5.30/MMBTU level.
• US gulf cost prices remain at $4.70/MMBTU level based upon $5.70/MMBTU Asian market prices.
• Price in North West Europe was offered at discount to NBP UK.
• Whereas in SW Europe prices remained at low $5.00/MMBTU level corresponding to Hub prices increase, TRS France increased by 13 cents since Monday and MIBGas increase by 17 cents.
• US-China LNG trade discussion still considered as bargaining tool by China for Middle Eastern suppliers.
• South Korea new president Moon Jae-in is focused on reducing reliance on coal and nuclear power generation, which constitutes 70% of total power generation.
• BP will be supplying 16 LNG cargoes annually to PLN from Tangguh project from 2020.
• Australian GLNG shut a train for a month, the eighth outage in last 14 months.
• Japan, Korea and Taiwan demand is increasing for summer re-stocking.
• Gazprom signed MOU with two Chinese companies CNPC and CHG at Belt and road Forum in Beijing focusing on joining effort in gas sector and power generation.
• China gas consumption increased to 16.9 BCM in April 2017, with first 4 months total consumption at 80.5 BCM, portraying Chinese commitment on climate control

 

LNG Merchant Activity

• This week 40 vessels carrying 2.51 million tons (131.51 BCF) loaded from various supply centres. A decrease by 27% week on week basis.
• Six vessels carrying 20.97 BCF departed from Nigerian port for European and Indian ports.
• One vessel left from Equatorial Guinea carrying 3.20 BCF.
• Pont Fortin, Trinidad & Tobago loaded three vessels with 8.43 BCF.
• 3 vessels loaded this week from Sabine Pass, USA with 9.88 BCF.
• Two vessels departed from Russia carrying 5.98 BCF.
• 10 vessels left from Australian export terminals at Darwin, Dampier and Gladstone ports for Japan, China and Singapore carrying 30.61 BCF.
• Middle Eastern terminals at Das Island (UAE), Qalhat (Oman) and Ras Lafan (Qatar) loaded 13 vessels carrying 44.37 BCF for Asian destinations.