CRUDE OIL PRICING & RELATED / PART 2 - International In Scope
11/03 16:42 U.S. cash crudes rattled by imports, close lower
NEW YORK, Nov 3 - U.S. cash crude prices continued to retreat in the the face of a flood of foreign crude streaming toward the Gulf Coast, while a lower futures contract only steepened the market's overall losses on Tuesday.
"There is even more European and West African grades on the water now than there was last week," said one oil-company trader. "That is putting pressure on the LLS," he said, referring to Light Louisiana Sweet/St. James.
LLS/St. James opened Tuesday at around 40 cents under the U.S. cash crude benchmark West Texas Intermediate/Cushing. By the close of trade, however, it was reported done as low as 52 cents below WTI/Cushing.
It's sister grade wasn't affected in terms of differentials to the benchmark. Heavy Louisiana Sweet/Empire was said done at minus 73 and minus 75 cents to WTI/Cushing.
Cash crude prices witnessed losses across the board Tuesday because of a drop in futures on the New York Mercantile Exchange. The front-month December crude oil contract slipped 16 cents to settle at $14.20 a barrel and the January contract settled at $14.40 a barrel, down 12 cents.
Futures traders said predictions of a rise in U.S. crude oil stocks in this evening's American Petroleum Institute weekly report undercut confidence in the contract, while they downplayed the latest tensions between Iraq and the United Nations.
Meanwhile, cash market traders warned of an armada of imports pointing at the U.S. because of a wide spread between North Sea Brent and WTI/Cushing prices. WTI on the NYMEX was trading at a $1.35 premium to North Sea Brent on the International Petroleum Exchange on Tuesday.
The open arbitrage has recently battered LLS/St. James, which had been trading at 30 cents under the benchmark as recently as Friday.
In the trade, West Texas Intermediate/Midland changed hands at 33 and 34 cents under the benchmark, and West Texas Sour/Midland was done at $1.75 and $1.70 under.
Traders said WTI/Cushing postings-plus spent most of Tuesday between $2.36 and $2.38 a barrel.
11/03 16:57 U.S. spot products-Tight NYH jet fuel up a penny
NEW YORK, Nov 3 - New York Harbor jet fuel differentials edged up around a penny late Tuesday on tight supplies while gasoline differentials were held steady despite the sharp drop on NYMEX gasoline, traders said.
"It is short in supply," a trader said. "Demand was expected to drop off but it is holding firm."
U.S. Gulf Coast product cash differentials held gains in early post-scheduling talk while diesel in the Group Three extended its firm tone on late harvesting demand.
But afternoon trade was dull ahead of the weekly stock data due to be released by the American Petroleum Institute late Tuesday.
Traders and analysts polled by Reuters forecast higher stocks of distillates, and gasoline amid higher refinery runs. Gasoline rose 1.2 million barrels in the week ended Oct 30 to 197.3 million and distillates were 1.1 million at 147.8 million, they forecast.
Crude stocks were expected to be 4.0 million barrels higher at 336 million.
On the NYMEX, December gasoline settled 0.60 cents lower at 43.71 cents per gallon in line with the crude drop of 16 cents per barrel to $14.20.
December heating oil however was supported by crack spread trading, settling 0.01 cent per gallon higher at 39.37 cents.
NEW YORK HARBOR
Jet fuel differentials gained up to a penny a gallon, amid tight supplies, traders said.
The 54-grade traded at a 6.75 to 7.00 cents premium while the 55-grade was offered at a 8.00 cents premium. Gasoline and distillate held steady to firm. Prompt heating oil No.2 was pegged at a 1.00 cent discount and low sulphur diesel was at a 0.60 cent premium down.
Prompt regular conventional M5 gasoline traded at even with the December screen, premium conventional V5 was pegged at a 2.50 cents regrade.
On the reformulated grade, regular A5 traded was pegged at a 1.25 cent premium, A9 at a 1.80 cents premium and premium grades D5 at 3.50 and D9 at 5.50 cents.
GULF COAST
Regular gasoline held mornings gains after Monday's 0.75 cent losses that were made on scheduling, traders said.
Prompt front 32 cycle regular gasoline held the morning's 0.25 cent gain and was pegged at 5.00/4.75 cent under the December screen.
Low sulphur diesel firmed another 0.10 cent from the morning for front 32 cycle, and was pegged 0.60/0.40 cent under.
Jet fuel differentials rose on lack of supply. Jet 54 grade was pegged at 2.50/2.75 cents over the screen. Jet 55-grade was pegged at 3.50/3.75 cents over.
Heating oil was steady, and was pegged at 2.40/2.25 under the screen for front 32 cycle material.
Premium V4 conventional gasoline was at a 3.00 cent regrade to the M4, the reformulated A4 at a 2.40 cent regrade, and the premium D4 at 0.75/0.50 cent under the screen.
MIDCONTINENT
Group Three low sulphur diesel differentials firmed on harvesting demand, traders said.
Group low sulph was pegged about 0.40 cent higher at 2.85/3.00 cent over the screen for prompt and 2.50/2.75 cent over for the anys. Prompt material traded at 3.00 cents over.
November regular gasoline in Chicago was pegged at a 3.50/3.25 cents discount and the premium grade at a 3.00/3.25 regrade.
Chicago low sulphur diesel, was steady at 1.20/1.50 over while jet was at a 4.50/5.00 cents premium.
Group Three November regular gasoline was pegged at a 3.75/3.50 cents discount, trading at 3.75 cent under and premium gasoline steady at a 3.25 cent regrade, jet fuel slipped 0.25 cent to 3.25/3.75 cents premium.
11/03 17:22 North Sea Brent Gains Eight Cents In U.S. Trading
NEW YORK, Nov 3 - North Sea Brent gained eight cents in late U.S. trading on Tuesday.
December Brent was valued at $12.93 a barrel, up from its close at $12.85 earlier Tuesday on the International Petroleum Exchange.
Aftermarket trading included a full cargo of December cash Brent, sold at $12.90. Other deals involved 300 lots of December cash partial cargoes at $12.88, 100 lots at $12.95, 100 lots at $12.98, 200 lots at $12.99 and another 200 lots at $13.00.
Traders said the Brent December-January spread traded twice at minus 25 cents and twice at minus 26 cents.
11/03 18:29 U.S. Foreign Crude - Sloppy Market Awaits Cusiana
NEW YORK, Nov 3 - Sentiment was bearish for both sweet and sour crudes in the U.S. market for imported crudes, traders said on Tuesday.
"It's a sloppy market," one trader with a major said.
LATAM - VENEZUELA, COLOMBIA, ECUADOR, CHILE
-- Colombia's sweet crude, Cusiana was valued around $1.60-1.55 under West Texas Intermediate, about five cents weaker than Monday and there was some talk that there would be additional pressure on the grade from further tenders this week.
State-owned oil company Ecopetrol is accepting bids on four December loading cargoes of Cusiana till tomorrow. The cargoes load between December 8 and December 22.
One trader said he expected differentials for the sweet crude to slip to minus $1.70, and noted that demand for sweet grades was not particularly strong. Last week, Ecopetrol awarded three tenders for early December loading cargoes at differentials around $1.60-1.55 under WTI.
-- Pumping resumed on Tuesday along Colombia's second-largest pipeline, the line linking the Cano Limon field to the Caribbean loading port of Covenas. The 230,000 barrel per day (bpd) capacity pipeline was shut after it was bombed for the 68th time this year last Sunday.
-- Venezuela's sour crude Mesa/Furrial was valued at $2.70-2.65. The last deal for the grade was heard last week, at $2.65n under West Texas Intermediate, more than 30 cents weaker than the previous deal. Only one more November cargo of Mesa is said to be left, which traders expect to sell for around $2.70 under WTI. PDVSA's December program is expected to include 15 cargoes for spot sales, traders estimate.
-- Ecuador's sour crude is also under pressure. Oriente was said to be on offer in the U.S. Gulf at $2.60 under WTI, although buyers may be as far away as minus $2.80.
-- Traders said Chilean ENAP's buy-tender for 960,000 barrels for delivery December 15-19 was filled with Nigerian Escravos. Traders said the price was equivalent to a slight premium to Dated North Sea Brent.
NORTH SEA, WEST AFRICAN
-- North Sea Brent was on offer into the U.S. Gulf at a discount of $1.00 under December WTI, but buyers are said to be closer to $1.15-1.20. Several traders are said to be showing the Brent, whose movement has been facilitated by a relatively wide trans-Atlantic arbitrage, weak prices for prompt or Dated Brent and relatively cheap freight rates.
The arb settled at $1.35 a barrel, while Dated cargoes were valued at around $1.00 under December Brent.
-- West African crudes are also under pressure, as traders estimate that at least eight November-loading cargoes of African crude are still unsold. Most of the unsold crude is Nigerian Bonny Light, which is valued around 5-10 cents over Dated Brent, traders said. Other unsold grades include Nigerian Qua Iboe, Escravos, Forcados and Congolese Kitina.
Angolan Cabinda is valued around 95-90 cents under Dated Brent on an fob basis, and was also heard sold at around January WTI minus $1.50 on a U.S. Gulf delivered basis, traders said.
11/03 20:03 U.S West Coast ANS diffs flat Tuesday
LOS ANGELES, Nov 3 - U.S. West Coast crude oil differentials were steady Tuesday while absolute prices fell with broadly lower markets.
Trade was quiet and dealers said it was too early for refiners to buy December cargoes of Alaska North Slope (ANS), until they assessed their needs further.
The last cargo of ANS sold at the discount of $1.37 a barrel under December West Texas Intermediate/Cushing.
Traders dismissed any serious impact from an explosion and fire last week that shut in 10,000 barrels per day (bpd) of ANScrude oil for an indefinite period.
The fire occurred at a production platform on the western edge of the North Slope oil region midday Friday, BP said.
The lost output represents less than one percent of the North Slope's total output of 1.2 million bpd.
At least three buyers, meanwhile, were looking to push the December ANS differential as wide as $1.50 under WTI.
With the discount flat, pure ANS prices fell with cash crude oil, which settled 20 cents a barrel lower in daytime trade.
The notional price for West Coast ANS fell to $12.79/12.95 a barrel from $12.99/13.16.
West Coast spot crude markets were idle for other grades.
11/03 21:47 ACCESS U.S crude futures fall on inventory rise
LOS ANGELES, Nov 3 - U.S. December crude oil futures prices fell in the ACCESS after-hours market in response to a weekly supply report showing higher inventories of gasoline and crude oil.
The American Petroleum Institute (API) on Tuesday released weekly inventory numbers that showed an 8 million barrel rise in U.S. crude oil stocks, a 3.2 million barrel rise in unleaded gasoline stocks, and distillate stocks that fell by 946,000 barrels.
December crude oil traded at $14.01 a barrel in after-hours trade on ACCESS, down 19 cents a barrel from its NYMEX close where it finished 16 cents a barrel lower in anticipation of the API report.
Crude futures volume was a light 2,393 lots for all months and 1,695 lots for December on ACCESS.
December unleaded gasoline traded 43.20 cent a gallon on ACCESS, down 0.51 cent with 160 lots exchanged for all months and 90 for the front month.
December heating oil traded 125 lots total. The contract fell 0.12 cent a gallon to 39.25 cents on ACCESS.
11/04 04:38 US Crude Outlook -Iraq gives boost despite imports
NEW YORK, Nov 2 - U.S. crude oil traders were cautiously optimistic about oil prices on Monday, after crude futures began the week on a high note, supported the growing tension between Iraq and the international community.
"I think we've been making a bottom in crude," said Warren Tashnek, of FIMAT USA Futures. "Obviously, the Iraqi news is helping the market," he continued, but added that he was bullish about crude prices even before Iraq's Parliament decided to halt cooperation with arms inspectors.
On Monday, Iraq's Parliament voted to halt cooperation with U.N. inspectors until the U.N. Security Council reviews lifting the sanctions imposed on Iraq after the Gulf War.
U.S. President Bill Clinton demanded that Iraq allow United Nations weapons inspectors to finish their work, and warned that all options were open until the inspectors returned to their duties.
Front-month crude oil futures gained up to 32 cents on the news, touching an intraday high of $14.74 a barrel. But the December contract ran into stiff resistance at those levels, and retreated into negative territory later in the day, settling at $14.36 a barrel, down six cents.
"It's going to take a while to improve these fundamentals," Tashnek said.
Although the futures market permits some optimism, cash traders point to less supportive fundamentals, both domestically and on the foreign side.
Imported crude continues to be amply offered into U.S. markets, as traders point to several players offering North Sea Brent into the Gulf Coast.
"There is a ton of foreign crude coming this way. The arbitrage is so wide open, it looks like the Grand Canyon," said one cash trader for a major oil company. The arbitrage, which settled at $1.29 on Monday, and is made even more attractive by the relatively cheap price of prompt, or Dated Brent around $1.04 under December Brent.
Light Louisiana Sweet, the main domestic sweet crude, will likely face the sharpest threat from foreign supplies, traders said. LLS weakened by 25 cents to trade at nearly a 40-cent discount to WTI/Cushing last week as a result, then lost several more cents in listless trade on Monday.
In addition to one U.S. refiner's several large vessels carrying Brent, traders were talking about several smaller vessels being fixed by other players. Brent was on offer at around 90 cents under January West Texas Intermediate, Gulf Coast traders said.
Colombia's main sweet, Cusiana, is also weaker, and is valued around $1.55-1.50 under WTI, although details about state oil company Ecopetrol's latest tenders were not available on Monday. Differentials for Cusiana have widened by almost 30 cents since last month.
Cash traders note that sour crudes are also under pressure, especially after last week's news that Chevron's 295,000 barrel per day (bpd) Pascagoula, Miss., refinery will only become fullyoperational at the end of the year. The refinery, which was damaged when Hurricane Georges hit the Gulf Coast in September, runs mostly sour crude, and its problems have eaten into U.S. demand for sour crude.
Venezuela's Mesa/Furrial reportedly traded at $2.65 under WTI last week, having slipped by more than 30 cents in two weeks.
Similarly, Ecuador's sour crude, Oriente is said to be on offer at $2.60 off WTI into the U.S. Gulf, although there is some talk that buyers are as far away as minus $2.80.
The main domestic sour grade, West Texas Sour/Midland has also weakened, and was talked around $1.70 under U.S. benchmark WTI. Last week, WTS was trading around minus $1.48, after Mexico's state oil company Petroleos Mexicanos briefly suspended830,0000 barrels per day of its offshore crude production last week as a precaution against Hurricane Mitch. But the storm has lost much of its strength since then, and traders don't expect any further interruptions to sour crude imports from Mexico.
11/04 04:38 US Products Outlook-Imports, restarts pound prods
NEW YORK, Nov 2 - Bearish pressure from imports and from last week's return of two U.S. refineries from fall turnarounds should dominate oil products this week, traders said.
"You think gasoline is cheap here? The price is desperately cheap in Asia and Europe," said one Gulf trader about the situation cracking open the arbitrage window in the New York Harbor.
While traders said at least 12 cargoes of gasoline were in the water on their way to the New York Harbor, one Gulf trader said six cargoes were fixed to ports all over the U.S. on Monday alone.
Those six included cargoes from Europe, where the Rhine River, a major route to the Rotterdam refining hub, is flooded and partially closed to barges, and a cargo from St. Croix in the U.S. Virgin Islands.
Also adding pressure on products is the fact the scheduled maintenance season is over, with no more major turnarounds on the slate until the spring.
Last week Sun Co. <SUN.N> restarted its 177,000 barrel-per-day (bpd) crude distillation unit at its Philadelphia refinery which was just part of around 430,000 bpd of production to return from maintenance shutdowns that week.
The Sun turnaround came just Tosco's Bayway turnaround, and the two combined helped knock East Coast crude runs to their lowest level in five years.
The low level of crude runs caught some New York traders short last week after a small draw on gasoline brought about in part by short supplies of blending stocks. This week traders said prices should be beaten down.
"Gasoline has been unusually strong with a number of turnarounds in the northeast - i expect it will soften," said one New York trader with a major refining company.
"On the distillates, it is the same type of situation -- there will be a bit more pressure until the we see colder weather," he added.
Distillates in the northeast were supported last week as traders with storage took advantage of the contango in the market to buy the cheaper prompt supplies of the heating fuel, lifting outright prices by over a penny to around 38 cents per gallon.
Now Gulf traders say the additional storing of heating oil in the New York Habor leaves little room for Gulf gasoline to be sold to up North. In addition, adding further pressure, traders said that gasoline storage was high in the Midcontinent trading hub and the Caribbean.
"Nothing looks bullish here all week," said one Gulf trader.
In the Harbor, traders said jet fuel was the only thing looking up, still in short supply from refinery problems in the Gulf. "There is not a whole lot of jet around...there is a lot of demand but very low stocks," said a Northeast trader.
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