U.S. crude stockpiles rise unexpectedly as imports soar

MOSCOW (MRC) -- U.S. crude oil stockpiles rose last week after nearly two months of declines as imports jumped to their highest since January, while gasoline and distillate inventories also grew as refiners ramped up production to their highest rate this year so far, the Energy Information Administration said, as per Finance.

Crude inventories rose 2.4 million barrels in the week to Aug. 2, compared with analysts’ expectations for a decrease of 2.8 million barrels. At 438.9 million barrels, U.S. crude oil inventories were about 2% above the five-year average for this time of year, the EIA said.

Net U.S. crude imports rose last week by 1.2 million barrels per day to 5.3 million bpd, their highest since January, as exports alone fell their lowest since October 2018 at 1.9 million bpd.

Crude production grew 100,000 bpd to 12.3 million bpd, just under its weekly record high at 12.4 million hit in May. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell 1.5 million barrels, EIA said.

The oil markets extended losses after the data. U.S. crude futures were down USD2.82, or 5.3%, at $50.76 a barrel at 11:39 a.m. EDT (1539 GMT), while Brent crude fell USD2.58, or 4.5% to $56.34 a barrel.

“The first build to oil inventories in eight weeks puts further downward pressure on prices amid an already strong sell-off,” said Matthew Smith, director of commodity research at ClipperData. "The big jump in refinery runs - to the highest point since the last week of 2018 - has not surprisingly translated into builds across the products, further greasing the wheels for today’s sell-off."

Refinery crude runs rose 786,000 bpd, EIA data showed. Refinery utilization rates rose by 3.4 percentage points to 96.4% of total capacity. Gasoline stocks rose 4.4 million barrels, compared with analysts’ expectations in a Reuters poll for a 722,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose 1.5 million barrels, versus expectations for a 482,000 barrels increase, the EIA data showed.
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MOSCOW (MRC) -- BP and Mukesh Ambani’s Reliance Industries have agreed to form a fuels joint venture in India as the UK oil and gas major seeks expansion in the fastest-growing energy consumer, said the Financial Times.

Building on an offshore gas exploration and production partnership which began in 2011, BP and Reliance will jointly form a petrol station network and aviation fuels business. Foreign companies, from BP to Saudi Aramco, are trying to secure a foothold the Indian market as they bank on the country’s rising oil demand in the years to come.

The companies did not disclose financial details but the deal would see BP take a big stake in Reliance’s retail and aviation fuels business. The new joint venture would be 49 per cent owned by BP and 51 per cent by Reliance. The deal is expected to formally close in the first half of 2020.

BP will help nearly quadruple Reliance’s retail fuels sites to 5,500 and will gain access to the company’s aviation fuels business, which currently operates at over 30 airports across India.

Government figures show well over 230m vehicles clog up India’s roads, up threefold since 2001, but this is seen as a hugely under-developed market. A boom in fuel retail networks is expected with a greater role for the private sector, which is trying to stake its claim over the Indian energy sector.

Rapid fossil fuel demand growth in India is set to support the global energy industry at a time consumption is set to stagnate in the west. A shift towards Asia also comes at a time when western public sentiment against oil and gas companies is rising for their role in enabling climate change.

Bob Dudley, chief executive of BP and Mukesh Ambani, chairman and managing director of Reliance Industries, signed a preliminary agreement in Mumbai on Tuesday. Mr Dudley said: “India is set to be the world’s largest growth market for energy by the mid-2020s."

Mr Ambani said the deal would enable Reliance to “deepen our engagement” with consumers. BP also hopes to deliver mobility services, such as electric vehicle charging, in certain markets.

The Reliance announcement comes a week after BP said it would build an electric vehicle charging network in China with Didi Chuxing, the ride-hailing group.

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MOSCOW (MRC) -- Polish oil refiner PKN Orlen’s bid for rival Lotos may reduce competition in Poland and neighboring countries and push up prices, EU antitrust regulators said as they opened a full-scale investigation, said Hydrocarbonprocessing.

State-run PKN wants to buy at least a 53% of Lotos, in which the government holds a 53.19% stake. The companies own the only two refineries in Poland and are also present in the Czech Republic, Estonia, Latvia, Lithuania and Slovakia.

The European Commission said the deal may lead to higher prices and curb competition, confirming a Reuters report on July 4.

In the wholesale supply of fuels, the combined company would be a quasi-monopoly facing limited competition from imports, the EU antitrust enforcer said.

It said in the retail market, the merged company would be four times bigger than the next rival while airports would have only one jet fuel supplier.

The deal would also eliminate the only competitor to PKN in bitumen supply in the Czech Republic, Estonia, Latvia, Lithuania and Slovakia. The combined company would have a dominant share of the provision of mandatory storage facilities in Poland.

The Commission also expressed concerns about downstream rivals being shut out of the market because of the volumes of fuels held by both companies. It set a Dec. 13 deadline for its decision.

Rival BP, with 550 petrol stations in Poland versus PKN’s 1,783 and Lotos’ 493, has criticised the deal.
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MOSCOW (MRC) -- Huntsman will sell its chemical intermediates and surfactants units to Asian rival Thailand-based Indorama Ventures.

The purchase price includes US$2 bln of cash, in addition to the transfer of US$76 mln in net underfunded pension and other retirement-benefit liabilities.

As part of the deal, Indorama will acquire Huntsman manufacturing facilities in Texas, India and Australia. Under the deal terms, Indorama Ventures would acquire Hunstman's manufacturing facilities located in Port Neches, Tex., Dayton, Tex., Chocolate Bayou, Tex., Ankleshwar, India, and Botany, Australia.

The move allows Huntsman to exit one of its slowest growing businesses and obtain cash to expand its core polyurethane business as well as accelerate a USD1bln stock buyback program.

Chemical intermediates and surfactants are used in a range of products, including lubricants and cleaning supplies. Indorama, founded by Indian businessman Aloke Lohia, has been looking to expand in the U.S., and the purchase would initiate that goal. Peter Huntsman, the US group’s chief executive, said that the deal “further transforms Huntsman’s balance sheet and future”, and was in line with its strategy of focusing more on its downstream and specialty businesses.
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MOSCOW (MRC) -- KBR announced that it has acquired isomerization technologies from RRT Global that will enable KBR to offer expanded octane and clean fuel technology solutions to customers, said the company.

KBR, in alliance with RRT Global, has been offering MAX-ISOM™ catalytic distillation technology for the isomerization of C5 and C6 n-paraffins to boost gasoline pool octane since 2015. Isomerization of C5 and C6 streams is practiced to improve the octane rating of light straight run naphtha.

Now, KBR has acquired the patented technology with intellectual property rights to offer MAX-ISOM globally and to offer isomerization technologies for C4 and C7 streams.

Isomerization of C4 streams produces a more desirable feedstock for alkylation units such as KBR's Solid Acid Alkylation Technology (K-SAAT). C7 isomerization can be applied to upgrade low octane C7 streams to produce isomerate that can be blended directly in the gasoline pool.

Unlike conventional fixed-bed isomerization process technologies, MAX-ISOM can accommodate high benzene content in the feed, due to its unique catalytic distillation column design. MAX-ISOM offers significant energy reduction, much smaller footprint and lower CapEx compared to traditional units.

"With the acquisition of these technologies, KBR now offers expanded Octane solutions including isomerization of C4, C5, C6 and C7 streams in refineries," said John Derbyshire, President, KBR Technology Solutions. "MAX-ISOM is the technology of choice for the low-cost production of high octane isomerate, in a highly flexible and compact design with minimum energy requirements."

Globally, fuel specifications have been tightening on the sulfur, benzene, olefins and total aromatics content of gasoline. Isomerization offers refiners a higher octane gasoline blend stock that is free from benzene, aromatics, oxygenates and olefins.

KBR is a global provider of differentiated professional services and technologies across the asset and program lifecycle within the Government Solutions and Energy sectors. KBR employs approximately 38,000 people worldwide (including our joint ventures), with customers in more than 80 countries, and operations in 40 countries, across three synergistic global businesses.
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