Wednesday , June 19 2019
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Emma Slawinski



Articles by Emma Slawinski

Energy and commodity highlights: Tanker attacks, biofuels and oil, spiraling naphtha prices

5 days ago

Global oil markets were jolted late in the week by reports of attacks on two oil tankers near the Strait of Hormuz on June 13.
Brent crude futures climbed almost 4% immediately after the attacks. ICE Brent eventually settled $1.34 higher at $61.31/b, and was trading higher the morning of June 14.

The US was quick to blame the attack on Iran, saying it was orchestrated by the country’s Islamic Revolutionary Guard Corps, in response to US economic sanctions on Iran.
Click for full-size infographic
Go deeper: S&P Global Platts’ Factbox on the latest attack in the Gulf of Oman
It remains to be seen whether the current risks to oil supply in the Middle East will offer sustained support to oil prices. However, Platts Analytics pointed to potential for higher Brent crude levels in the second

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Energy and commodities highlights: Oil price and politics, Permian pipelines, batteries and tariffs

12 days ago

As world leaders and oil company executives gathered at the St Petersburg Economic Forum from June 6, major figures in the world of oil staked out their position on issues of pricing and supply.
Russian President Vladimir Putin put the onus on Saudi Arabia to make the case for continuing a supply cut agreement set to expire at month’s end, saying that Russia could do fine with an oil price in the range of $60-65/b.

Lukoil CEO Vagit Alekperov said at the forum that $60-$70/b was a “comfortable” price and that he saw no need for the OPEC/non-OPEC pact to raise output.
Their comments come following a sharp decline in oil prices, with Brent crude futures shedding around $7/b in the 10 days preceding the conference.
Meanwhile, Rosneft CEO Igor Sechin highlighted the need for greater energy

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Energy and commodities highlights: Steel and sanctions, war on plastic, EU coal power decline

19 days ago

The effects of Iran sanctions and the US-China trade spat were showing in several Asian commodity markets in late May.
Market sources told S&P Global Platts that major steel billet buyers in Thailand and Indonesia were avoiding Iranian material in favor of sources like Russia, Vietnam and Malaysia.

The shift in purchasing patterns has caused offers for Russian billet to rise by about $10/mt, or 2%, over the past two weeks.
US President Donald Trump on May 8 imposed sanctions on Iran’s iron, steel, aluminum and copper sectors. The move followed sweeping sanctions on Iranian oil that aim to bring the country’s exports of the commodity to zero.
The US State Department on May 30 reiterated its policy to bring purchases of Iranian oil to zero, despite earlier speculation that enforcement

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Energy and commodities highlights: US steel and aluminum tariffs, Middle East oil and electric power

26 days ago

Tariffs and trade deals are sticking to the top of the commodities agenda, after the US reached an agreement to remove Section 232 tariffs on steel and aluminum imports from Canada and Mexico.
The deal, announced on May 17, removes US import tariffs of 25% on steel and 10% on aluminum, without imposing quotas to cap imports.

Mexican steel producers welcomed the tariff removal, but remain in a challenging position due to pressure from US buyers to reduce prices, an increase in raw material costs, and flagging domestic demand.
Back in the US, steel industry stakeholders gave a measured response, calling on the Trump administration to remain vigilant and prevent excessive imports.
Also on May 17, the White House said the US would delay imposing tariffs on automobile and auto parts imports

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Energy and commodities highlights: Middle East tensions, Panama Canal, global EV sales

May 17, 2019

The past week was marked by heightened geopolitical tensions as attacks on ships and oil infrastructure in the Middle East spread jitters through oil markets.
On May 12, the UAE government said that four commercial vessels suffered “sabotage” in the Gulf of Oman, without giving more specific details about the nature of the attack. The following day, a drone attack halted flows through Saudi Arabia’s main oil transport pipeline to terminals and refineries on the Red Sea.

The recent incidents added to concerns about the Strait of Hormuz, the world’s busiest oil transit choke point. After the US decided not to renew waivers for Iran sanctions, Iran retaliated with a threat to close or disrupt traffic on the Strait. That in turn prompted the US to send warships and warplanes to the region.

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Energy and commodities highlights: Trade wars, US LNG development, energy digitalization

May 10, 2019

Commodities and financial markets spent the past week watching for progress in US-China trade talks, but there was no firm outcome ahead of a May 10 deadline, leading to a further escalation of US-imposed tariffs.
Without a resolution, a scheduled hike in tariffs kicked in on US imports of $200 billion worth of Chinese goods, from 10% to 25%. Talks were expected to resume on Friday, May 10, but China is now mulling the details of its promised response.

The US LNG sector could be hit hard by the ongoing dispute between the world’s two biggest economies. Export project developers in the US had previously looked to China as a key driver of demand growth – and a source of financing – but the deterioration in trade relations means marketers are having to search for other buyers. Nevertheless,

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Energy and commodities highlights: Crude contamination, alternatives to Iranian oil, China shale gas

May 3, 2019

Supply-side issues continued to preoccupy oil markets at the start of May, after Russian crude exports to Central and Eastern Europe were hit by a contamination problem that caused disruption all along the supply chain.
Problems with crude quality on Russia’s Druzhba (Friendship) pipeline began to emerge on April 18, and the pipe was subsequently shut down. The Czech Republic, Hungary and Poland responded by releasing emergency stocks. Exports from the Ust-Luga terminal on the Gulf of Finland were also disrupted.

By May 2, clean Russian crude was again entering Eastern Europe via Belarus, although a full clean-up to deal with the consequences of the contamination is expected to take months. Although countries in the region have been trying to reduce their dependence on Russian oil, some

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Energy and commodities highlights: Iran oil sanctions, India’s election, floating nuclear power

April 26, 2019

The White House announced on April 22 that it would end all waivers from Iran oil sanctions when they expire on May 2, sending ripples through oil markets.
The development puts the spotlight firmly on OPEC, as leading member Saudi Arabia, which holds the bulk of the world’s spare output capacity, will have to decide whether to pump more and risk destabilizing an OPEC/non-OPEC production accord.

Importers of Iranian crude are also in a quandary, and must decide how best to source replacement barrels. India, an important buyer of Iranian oil, has other options including Mexico and Iraq, according to sources in the country. Meanwhile, Japan’s economy minister said there was no need for the state to release strategic petroleum reserves as a result of the US’ move. Refiners in the country

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Energy and commodities highlights: Sanctions, US clean energy goals, LNG’s second wave

April 12, 2019

Commodity markets were weighing supply side risks this week, as key producing countries continue to grapple with sanctions and political upheaval.
In Libya, Africa’s third-largest oil producer and a significant supplier of gas to Europe, violence has escalated and the country is in danger of falling back into civil war. International oil companies like Italy’s Eni have started evacuating staff from Tripoli.

Meanwhile, despite sanctions Iran’s oil exports recovered in March off the back of Chinese and South Korean buying. But based on data and information from market sources, Iranian production has recently declined, and the country drew heavily on stocks to support the export surge.
Russia’s energy sector is also subject to US sanctions, which include measures targeting the development of

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Energy and commodities highlights: Algerian politics, Brazilian autos and plastics-to-fuel tech

April 5, 2019

Oil markets had their eyes trained on North African politics this week, and developments in Libya and Algeria in particular.

Algerian President Abdelaziz Bouteflika’s resignation on April 2 threw the state’s long-delayed oil and gas reforms into doubt. Bouteflika had just a few days earlier appointed Algeria’s fourth energy minister in three years.

In Libya, eastern military leader General Khalifa Haftar looked to be pushing for greater control over the country, adding to other supply-side concerns that have recently driven sentiment in crude oil markets.

Further south in the continent, industry members gathered in Malabo, Equatorial Guinea, for the APPO Cape VII conference. At the event, OPEC’s secretary general said the group and its allies would not ease recent

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Energy and commodities highlights: Metals and EVs, Africa’s downstream boom, Brazil’s sugar season

March 29, 2019

Metals are playing a starring role in the transition towards renewables and electric vehicles, and the past week saw plenty of activity in the sector. There were also positive indicators pointing to strong demand ahead for a number of products.

In China, the announcement of a cut in subsidies for EVs signalled a further milestone in the industry’s development.

Construction of Australia’s largest lithium processing plant began in Kemerton, Western Australia, with approval to produce up to 100,000mt/year of battery-grade lithium hydroxide. While research is ongoing to refine battery chemistry, there is no real alternative to lithium for batteries in the transport sector, making future supply crucial to the EV industry’s development.

In terms of international trade

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Energy and commodities highlights: Political change in oil states, LNG in Europe, trans-Atlantic freight

March 22, 2019

Spring 2019 is ushering in important political changes that are
being watched for their impact on oil and other commodities.

In Algeria new leadership was promised recently, following widespread protests. That’s fuelled discussion about the future of the country’s oil and gas industry.

Then on March 19, Kazakhstan’s president, Nursultan
Nazarbayev, announced his resignation after nearly 30 years in power. The
surprise announcement has similarly prompted questions about the direction oil
and gas policy will take, after
changes to tax legislation started to show signs of success in
attracting new investment.

Away from politics, Australian commodity producers and infrastructure operators were bracing for disruption as Cyclone Veronica headed towards Western Australia. Port

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Energy and commodities highlights: CERAWeek, US sanctions and EU energy laws

March 15, 2019

As energy industry professionals gathered in Houston for
CERAWeek, global oil politics was top of the agenda.

Policymakers and market participants saw opportunities for the US to grow its oil and gas exports amid geopolitical turbulence.

Developments on Iran sanctions were a key question hanging over the event, as the market awaits further news on waivers for key importers of Iranian crude. And the US’s request that India cut its Venezuelan crude oil imports has raised the possibility that it could take a softer line on Indian purchases of Iranian oil.

Meanwhile, Japan this week looked poised to take a last cargo of Iranian oil under the current waiver, as talks between Japan and the US on the sanctions continue.

GRAPHIC OF THE WEEK

US oil and gas rig

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Energy and commodities highlights: All eyes on India, US trade talks, Nord Stream 2

March 8, 2019

India and Pakistan’s tense relationship returned to the headlines recently, and while the latest incident had little impact on commodity markets, it brought into focus India’s role as a fast-growing market for raw materials.

Saudi Arabia quickly set diplomatic wheels in motion to defuse the situation. Aside from the clear interest in preventing fresh conflict from erupting close to home, Saudi Arabia expects India to become an increasingly important export market for its oil, and is also planning huge refining and petrochemicals investments in India.

Meanwhile the US is eyeing India as a potential sink for its rising oil output, with Indian refiners apparently keen to make regular purchases of American crude.

Fluctuations in India’s agricultural production could

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Energy and commodities highlights: Oil diplomacy, global LNG flows, trade wars

March 1, 2019

In a week dominated by geopolitical headlines, oil diplomacy
was also high on the agenda.

Despite a schedule that included a high-profile summit in Hanoi, US President Donald Trump found time to tweet his view of crude prices to OPEC, ahead of a meeting between US and Saudi officials.

OPEC’s next regular biannual meeting will take place June 25-26 in Vienna.

Meanwhile the so-called NOPEC bill is starting its path through the US legislative process, even as the country’s energy secretary Rick Perry warned it threatened an oil price spike.

IMO 2020

A shift to low sulfur marine fuel is imminent under new rules starting
on January 1, 2020. S&P Global Platts editors discuss the implications
across the shipping sector.

GRAPHIC OF THE WEEK

LNG trade

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Global energy transition, IP Week preview, IMO 2020: The week in energy and commodities

February 22, 2019

The global energy transition is well underway, but it was a week of mixed signals in the drive for decarbonization. In Europe, additions of wind power capacity in 2018 fell to their lowest level since 2011 and the outlook for investment is uncertain, sector association WindEurope said.

Meanwhile, the EU struck an informal deal to enforce lower emissions from heavy goods vehicles. The rules would see new HGVs emit an average of 15% less CO2 by 2025 and 30% less by 2030 compared with 2019.

Glencore was the latest commodities company to pitch its environmental commitments, as investor pressure on corporates mounts. The mining giant announced its intention to cap coal output by 2020 and focus on “commodities essential to the energy and mobility transition,” such as copper,

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China oil imports, Nigeria elections and Venezuela sanctions: Commodity and energy news highlights

February 15, 2019


The Lunar New Year brings shifts in supply and demand patterns across commodities, and 2019 was no different. Chinese oil imports saw a strong year on year increase in January,  but February figures are likely to be weaker due to the vacation. Meanwhile, steel markets were braced for pent up demand as China went back to work.
Ferrous markets continued to focus on the fallout from Vale’s catastrophic iron ore dam failure, with far-reaching Brazilian legislation now responding to the disaster. Neighboring Venezuala is still in the grip of political turmoil, meanwhile, with consequences for global oil trade flows and supply chains further downstream.
HIGHLIGHT
Analysis: New Brazil laws seen significantly impacting Minas Gerais mines output
New state and Brazilian federal government

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Insight: Energy-trading blockchains edge closer to reality, but market remains cautious

January 2, 2019

Is blockchain gaining a foothold in the energy sector? The last two years witnessed a boom in projects around commodities trading and logistics using distributed ledger technology, but the pilots proved slow to move on from proof of concept phases.
That might be changing, with two industry-backed blockchain projects in the energy sector now gathering momentum.
Vakt, a consortium of energy majors, banks and trading houses, took its blockchain-powered post-trade management system live on November 28, marking a significant commercial launch using the technology.
The platform is in a “private” launch phase, with five of the project investors – BP, Equinor, Shell, Gunvor and Mercuria – actively participating and using the system to confirm and manage deals in the North Sea oil market. The other

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US coal plant closures might not lead to cheaper coal prices

December 19, 2018

Despite a record rate of US coal-fired power plant closures in 2018, domestic coal prices are unlikely to come under significant pressure, according to S&P Global Platts Analytics, partly because exports are currently providing an outlet for excess supply.
A lack of downside pressure will be welcomed by producers. Despite promises by US President Donald Trump to put coal miners back to work and his efforts to repeal Obama-era legislation seen as hostile to the industry, use of the fuel has continued to decline in the power sector.
“Domestic demand in the US coal market has been falling pretty consistently in 2018 but we haven’t seen that drive prices down,” said Joe Aldina, US coal analyst at S&P Global Platts Analytics.
Full-year 2018 thermal coal exports from the US are forecast to reach

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