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 excess crude inventory that built up over the past two years has been disappearing. In its November oil market report the IEA says that global crude inventory “dropped by 63 mb in 3Q17, only the second quarterly draw since 2014”. According to the IEA, “OECD industry stocks fell by 40 mb in September to below 3,000 mb for the first time in two years.
There is also growing anecdotal evidence that the excess inventory is being worked down. The number of loaded VLCCs anchored offshore Singapore/Malaysia fell to 15 tankers in mid-November -- down from 30 tankers in mid-2017 and 40 in mid-2016. Within the past few weeks Vitol sold the 3 million bbls it has been storing offshore Oman in the ULCC Seaways Laura Lynn for the past two years.
Further indication of stock reduction is provided by the oil inventory survey conducted weekly by the US Energy Information Administration. The survey results provide solid evidence that crude inventory in the US has fallen over the past eight 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 data (see below) indicate that crude oil inventory in the US peaked at the end of March – after increasing over the first thirteen weeks of 2017. Since then US crude inventory has fallen 17% – from 535 million bbls at the end of March to 443 million bbls as of 8 December (excluding stocks in the Strategic Petroleum Reserve).
The increase in inventory in early/mid September 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, crude inventory resumed declining in late September/October. After leveling off between mid-October/mid-November, crude inventory again returned to its downward path over the past several 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".
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.