International Maritime Associates (IMA) is a firm of business consultants specializing in market analysis and strategic planning for companies in the marine and offshore sectors.
April 15, 2017Jim McCaul -- Orders for production floaters have finally begun to flow. The break came early this year when contracts for a production semi for use in the GOM and an FPSO for use off Malaysia were awarded.
December 12, 2016Jim McCaul -- Donald Trump’s presidential win and Republican sweep of the US government in November – along with OPEC’s oil production cuts in December -- have injected new dynamics into the US energy
April 28, 2016Jim McCaul -- No question that the market for new floating production systems has taken a battering. The past 12 to 18 months have been a difficult period for everyone in the business sector. Absence of
The global oil market is tightening as excess crude inventory built up over the past several years disappears. This is the conclusion of the IEA in its January oil market report.
“The oil market is clearly tightening; in the three consecutive quarters 2Q17- 4Q17 OECD crude stocks fell by an average of 630 kb/d; such a threesome has happened rarely in modern history: examples include 1999 (prices doubled), 2009 (prices increased by nearly $20/bbl), and 2013 (prices increased by $6/bbl). Since the nadir for Brent crude in June when the price was $45/bbl, the 2017 OECD crude draws have coincided with a price increase for Brent of nearly $25/bbl.”
Solid indication of stock reduction is provided by the oil inventory survey conducted weekly by the US Energy Information Administration. The survey results provide clear evidence that crude inventory in the US has fallen over the past nine months. While US inventory data represent trends in only one area of the global oil market, estimates for global oil inventory are notoriously weak – and industry analysts heavily rely on the weekly US oil inventory data as a surrogate for global inventory movement.
EIA survey results (see below) indicate that crude oil inventory in the US peaked at end March 2017 – after increasing over the first thirteen weeks of the year. Since then US crude inventory has fallen 23% – from 535 million bbls at the end of March 2017 to 413 million bbls as of 12 January 2018 (excluding stocks in the Strategic Petroleum Reserve).
The increase in inventory in early/mid September 2017 was the result of Hurricane Harvey, which shut in production at several refineries and caused US refinery utilization to drop below 80%. As refinery production increased in early 4th quarter, crude inventory returned to its downward path into 2018. Crude inventory has fallen steadily over the past nine weeks.
In its latest weekly survey report, the EIA said "U.S. crude oil inventories are in the middle of the average range for this time of year". At the recent withdrawal pace, pretty soon inventory will likely be below the average range.
Jim is the founder and manager of IMA, a consulting firm providing market analysis, competitive benchmarking and business planning support in the maritime and offshore sectors. Over the past 40 years IMA has performed more than 350 business consulting assignments for 170+ clients in 40+ countries.
One of the firm’s specialties is analyzing requirements for floating production systems. IMA has published more than 60 reports since 1996 analyzing this business sector and has been engaged by numerous clients to assist in analyzing specific market opportunities in the floating production sector.
Jim is also the co-founder of IMA/World Energy Reports, a New York based business intelligence service for the floating production supply chain.