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One in all Rigzone’s common market watchers takes a have a look at a shutdown on the Kirkuk – Ceyhan crude oil pipeline, U.S. crude oil exports, world refinery demand and extra. Learn on for extra element.
Rigzone: What have been some market expectations that really occurred throughout the previous week – and which expectations didn’t?
Hillary Stevenson, Senior Director of Vitality Market Intelligence at IIR Vitality: U.S. crude oil exports averaged a record-high 3.6 million barrels per day in 2022, 640,000 bpd greater than 2021, in line with the EIA. Crude oil export flows have been on the rise because the export ban was lifted in 2015. This comes as no shock given rising U.S. crude oil manufacturing paired with adequate pipeline and dock capability, particularly in Corpus Christi the place the majority of the exports originate. As anticipated, releases from the U.S. SPR and better demand for U.S. barrels amid Russian sanctions elevated 2022 common export numbers above the earlier 2020 file excessive. Exports might attain one other record-high in 2023 with flows averaging 4 million bpd to this point this yr, in line with the EIA.
Rigzone: What have been some market surprises?
Stevenson: Nothing like a pipeline shutdown to refocus the market on the basics. Crude flows on the 450,000 bpd Kirkuk – Ceyhan Crude Oil Pipeline from Kirkuk oil fields in Iraq to a port in Ceyhan, Turkey, have been shut after a courtroom ruling. Manufacturing could also be impacted if service isn’t returned quickly as tank capability is proscribed. The pipeline was lately offline from February 5 to February 7, 2023, because of the earthquake and security causes, in line with IIR.
Rigzone: What developments/tendencies will you be looking out for subsequent week?
Stevenson: Can be looking out for world refinery demand to extend quickly within the near-term with the business start-up of world-scale tasks and unplanned outage resolutions. Dangote Industries Restricted is wrapping up test-runs at their 650,000 bpd Lekki Refinery in Nigeria with expectations to commercially begin the unit in early-April. The refinery has been in building since 2018 and can devour West African crude, decreasing the quantity out there for export. Kuwait Built-in Petroleum Industries Firm (KIPIC) lately began business manufacturing at their second 205,000 bpd crude prepare at its 615,000 bpd Mina Al Zour Refinery in Kuwait. The third and final 205,000 bpd crude prepare is predicted on-line later this yr. When it comes to unplanned outage returns, Cenovus is conducting preliminary restart actions at their 160,000 bpd Toledo, Ohio and 49,000 bpd Superior, Wisconsin refineries. In Denver, Suncor is getting ready for the restart of their 98,000 bpd Commerce Metropolis refinery. All three refineries have been shut down as a consequence of fireplace: Toledo in 2022, Superior in 2018, and Commerce Metropolis in 2022, in line with IIR Vitality. Elevated world refinery demand will assist greater crude costs and assist alleviate distillate tightness.
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