NPA logo

News


Thursday(October,30 2014)

NPA CEO ASAGA BAGS TWO AWARDS

The Chief Executive of the National Petroleum Authority (NPA), Moses Asaga has bagged two prestigious awards. The awards are the “Nobles International Award’ for upholding the virtues of honesty, integrity and accountability by the West Africa Nobles Awards and the National “Achievers Awards” by the Northern Youth for Peace and Development.

 At the 20th West Africa Nobles Annual Congress and Award held in Akosombo, Mr. Moses Asaga was recognized for his contribution to Parliamentary work both at the committee level and nationally during his 16-year tenure as Member of Parliament (MP) for the Nabdam Constituency in the Upper East Region.

A citation by the West Africa Nobles Forum mentions his extra-ordinary commitment to Parliamentary work and as a Minster of States at various times in Ghana’s history of democratic governance.

Mr. Moses holds a BSc in Industrial Chemistry from Kwame Nkrumah University of Science and Technology (KNUST), MSc in Petroleum Engineering from Aberdeen University and an MBA, Finance from Yonsei University-Korea. Mr. Asaga also holds an MPhil in Financial Economics from Durham University, United Kingdom.

Mr. Moses Asaga also received the National Achievers Awards by the Northern Youth for Peace and Development (NYUPED) at the 3rd NYUPED National Achievers Award.  

The citation mentioned the interventions by Mr. Asaga’s in parts of the Northern Regions to improve quality of life in such deprived, marginalized and disadvantaged communities; providing educational grants to poor but brilliant students, contributing financial resources towards construction of both educational and socio – cultural infrastructures, and facilitating the development of youthful talents to harmonize and maintain peace among the people.

NYUPED also recognized the great interventions by Mr. Asaga in advancing the lives of many brilliant but needy young people whose education would have been in peril, had it not been for “your splendid generosity dispensed” the citation reads in part.
 
Tuesday(October,28 2014)

50% of Ghanaians control the downstream petroleum industry-Asaga

 Fifty percent (50%) of businesses operating in the Petroleum downstream industry in Ghana are wholly Ghanaian owned companies.

This signifies the Ghanaian success story of local content in the petroleum downstream industry in Ghana.

This came to light when the Chief Executive of the National Petroleum Authority (NPA), Moses Asaga addressed more than 500 final year students of the School of Business, University of Cape Coast. The lecture focused on the developments in the petroleum downstream industry: prospects and challenges.

According to Mr. Asaga, in the petroleum downstream today, there are more than 3000 petroleum retail outlets, 82 Oil Marketing Companies (OMCs), 42 LPG Marketing Companies, 545 transporters with more than 2500 Bulk Road Vehicles (BRVs), 24 Bulk Distribution Companies (BDCs) and 2 Oil Trading Companies (OTCs) adding “Ghanaian ownership in these Petroleum Service Providers (PSPs) is 50% and that is a positive outcome of the deregulation process which is ongoing in the petroleum downstream industry”.

Mr. Asaga told the students that in 2013, 3.3million tonnes of petroleum products were consumed in Ghana owing to increased economic activities in the country. “As the economy continues to grow, this consumption pattern will increase” Mr. Asaga told the over 500 eager audience.

Explaining further, Mr. Asaga said with the rapid growth and expansion in the downstream industry calls for increased monitoring and enforcement of regulatory standards. “Until recently, more than 30% of the fuel consumed in Ghana was adulterated thereby compromising the quality fuel the consumer needs but with the introduction of our novel program called Petroleum Product Marking Scheme-PPMS, in less 12months, adulteration has been reduced to 1% that is something NPA must be commended for” Mr. Asaga said.

Touching on the deregulation process, the Chief Executive of the NPA said, the deregulation process has made great impact on the industry and the economy but more needs to be done in boosting the infrastructural needs of the industry to meeting the increasing demand for petroleum products.

Some of the challenges facing the industry are the slow process of price ‘De-control’ resulting in under recoveries (Subsidies) which are borne by government. Delay in subsidy payments is gradually making investment in the sector unattractive hence the Infrastructure bottlenecks in the supply chain.

Answering question on the significance of the recent 2% reduction in prices of petroleum products, Mr. Asaga explained that “the 2% reduction in fuel price was very significant, because for just 2 weeks, this 2% reduction is 10million Ghana Cedis which has been given to consumers and  in another 2 weeks that is 20 Million Ghana Cedis-if we decide to buy exercise books for every primary school child, this would be enough for every school-going child, in the oil business, we deal with volumes, the volume consumed is all that what makes the difference.”

The lecture was at the instance of the School of Business, University of Cape Coast to boost the understanding of the students as they near completing of their course.

A Senior Lecturer of the University, Dr. John Gatsi thanked NPA for information and called for closer collaboration between industry and academia to boost national development.
Wednesday(October,22 2014)

PRESS RELEASE - RE: FILLING STATIONS CHEAT CONSUMERS

Our attention has been drawn to consumer concerns in the media that some filling stations are still selling petroleum products at the old prices even though fuel prices have been reduced by 2%.

The National Petroleum Authority (NPA) wishes to assure consumers of petroleum products that our monitoring teams are inspecting all filling stations across the country to verify compliance with the new the prices and defaulting filling stations will be sanctioned in accordance with the law.

We further wish to encourage consumers to lodge a complaint with the NPA where they find a filling station not complying with the reduced prices and such cases would be dealt with.

Contact us: 0302-766195-6, toll-free-080012300, email-info@npa.gov.gh


Issued By:

National Petroleum Authority

ENA House

No. 20 Boundary Road

East-Legon

 
Tuesday(October,21 2014)

Keynote Address Delivered by Hon. Emmanuel Armah Kofi Buah, Minister for Energy and Petroleum, on a Workshop for Parliamentary Press Corps on Operations of NPA

The Chairman;

Distinguished Guests;

Members of the Parliamentary Press Corps;

I deem it a great pleasure that I have been invited to grace this workshop and to give an insight and share my experiences in the Petroleum Downstream sector and the operations of the National Petroleum Authority.

I have selected two major areas in the downstream sector that I would discuss with you today. These are;
  1. Government’s efforts towards full deregulation and the role of the Bulk Distribution Companies.
  2. The determination and petroleum prices and subsidies.

Ladies and Gentlemen, simply put, deregulation of the downstream sector means the removal of government controls thereby allowing forces of demand and supply to determine Ex-pump prices of petroleum products at the filling stations.

It must be noted that full deregulation of the sector will come with onerous responsibilities on the National Petroleum Authority (NPA) and government to ensure the following:
  • No barriers to enter the downstream business and zero cartelization.
  • Full Cost Recovery based on Import Parity Benchmarking
  • Raise government revenue through the imposition of petroleum taxes/levies.
  • And among others, guarantee that petroleum product prices are the same throughout the country through the Unified Petroleum Price Fund (UPPF).

Chairman, it may interest you to know that even though the road to full deregulation has been bumpy, Government is committed to achieve full deregulation of the petroleum downstream sector;
  • NPA has been driven to encourage private sector participation and to target 50% true local indigenous participation in all activities
  • NPA has been tasked to develop regulations that create enabling environment for full deregulation
  • Petroleum Service Providers (PSPs) are being encouraged to compete fairly by setting their own Ex-Pump prices below the maximum indicative prices (e.g. GOIL consistently had lower indicative prices a couple of months ago)
  • Bulk Road Vehicle Tracking System to ensure integrity and accuracy of product distribution is being implemented
  • Fuel Marking Scheme Program to ensure integrity and purity of petroleum products has earnestly started.
The quest for full deregulation has led to the licensing of a number of BDCs who augment the shortfall in petroleum product supply on the market due to the current challenges at the Tema Oil Refinery.

Presently, BDCs account for a large share of petroleum products supplied to Ghana. They have continued to invest in infrastructure to enhance storage capacity of the nation thereby assisting in increasing our product stock security. BDCs account for about 34% of the nation’s storage capacity for finished products.

Ladies and Gentlemen, as you well know NPA has the mandate to set petroleum prices. They use the Import Parity formula based on Platts and Argus index and include supplier’s margin and various taxes/levies to determine local prices of petroleum products at the filling stations.

In the past Governments have pursued a policy of subsidizing prices of petroleum products as and when it considered full cost recovery too high to pass on to consumers. This unfortunately led to the accumulation of under recoveries owed to the BDCs. In 2013, Government removed all subsidies with the exception of premix fuel for the fishing communities. However, recent depreciation of the cedi has resulted in “false subsidies” consequently increasing outstanding under recoveries.

Chairman, Government is relentlessly pursuing various strategies that will actively, effectively and consistently implement Full Cost Recovery Policy at all times to avoid further accumulation of under recoveries and indebtedness to the BDCs.

I thank you once again for having me. I am hopeful that this workshop will comprehensively afford you an insight into the operations of the NPA and the petroleum downstream.


 
Monday(October,20 2014)

Press Release - Fuel Prices Reduced

The National Petroleum Authority (NPA) announces an average reduction of two percent (2%) in fuel prices effective 6am of Tuesday October 21, 2014.

These reductions are in accordance with reduction in the prices of crude oil and petroleum products on the world market.

The NPA has directed all Oil Marketing Companies (OMCs) to comply with these price reductions accordingly.                                                                                          
Friday(October,17 2014)

OIL MARKET NEWS (WEEK 42): WEEK ENDED OCTOBER 17, 2014

  Major Highlights
  • At $85.41/BBL, Dated Brent continues its downward trend amid plentiful supply
  • The weekly average GHS/USD exchange rate appreciates compared to the previous week
  • Gunfire and air strikes reported in Libya's second city, Benghazi
  • Ghana’s stock of both petrol and diesel increases compared to the previous week’s stock levels.
  • Total U.S commercial petroleum inventories increased by 1.0 million barrels last week.
  • The IEA cut its 2014 and 2015 oil demand growth by 200,000 and 300,000 bpd respectively.
At $85.41/BBL, Dated Brent continues its downward trend amid plentiful supply

Average Dated Brent price for the week (published by Platts) decreased by $4.76 to $85.41 per barrel from the previous week's average of $90.17 a barrel, indicating 5.28% decline.

Brent crude oil continued its downward trend, recording its lowest weekly average of the year, as growing concerns over the global economy stretched a four-month rout.

Mounting evidence of slackening demand and unrelenting U.S. shale output left traders struggling to peg a floor for crude's four-month rout.

Also weighing were news that key Middle East producers signaled they would keep output high even if that meant lower prices. Expectations faded that OPEC could cut output in an effort to shore up prices.

"It suggests there's some nervousness in the market that Saudis are seeking to bring pressure on the shale producers in the U.S.," said Gene McGillian, an analyst at Tradition Energy.

Eugen Weinberg, analyst at Commerbank in Frankfurt said "the market still seems very bearish, and despite us seeing a floor around $80, even this floor might come into danger if we don't have any signal from OPEC any time soon."

Free on board (FOB) prices of Petrol decreased by $97.85 to $804.80/MT from the previous week's average of $902.65, indicating 10.84% decline; Diesel decreased by $32.05 to $737.00/MT from the previous week’s average of $769.05, indicating 4.17% decline; LPG decreased by $57.80 to $561.80/MT from the previous week’s average of $619.60, indicating 9.33% decline, during the period under review.

The weekly average GHS/USD exchange rate appreciates compared to the previous week

The average GHS/US Dollar exchange rate strengthened compared to the previous week. The appreciation of the Ghana cedi against the USD, decreased marginally the impact of the exchange rate on the ex-pump prices of petroleum products.

The GHS/US Dollar exchange rate for the period 13th October 2014 to 17th October 2014 was 3.1983 compared to 3.1987 during the previous week.

The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 10.85%, 4.18% and 9.34% respectively, during the same period under review.

Geopolitics

Gunfire and air strikes reported in Libya's second city, Benghazi

Gunfire and air strikes have been reported in Libya's second city, Benghazi, amid an offensive to drive out Islamist militias.

The offensive is said to involve forces loyal to ex-general Khalifa Haftar, who is also reportedly backed by the army. Egypt has denied a report by the Associated Press news agency that its aircraft bombed targets in Benghazi.

Libya has been gripped by a power struggle between the militias who drove out Muammar Gaddafi in 2011. The interim government, recognised internationally, has fled to the city of Tobruk because of unrest in the capital, Tripoli.

However, militias who control Tripoli and Benghazi have announced the formation of their own government. Mr Haftar this week announced an operation to retake Benghazi from the Islamists. According to the AFP news
agency, he has the backing of the army.

Inventories

Ghana’s stock of both petrol and diesel increases compared to the previous week’s stock levels

Ghana’s stock of Diesel and Petrol to last 2.6 and 3.4 weeks respectively (as at October 13, 2014). Diesel’s stock of 2.6 weeks compare favorably to last week’s stock to last of 2.4 weeks, while Petrol’s stock of 3.4 weeks compare favorably to last week’s stock of 2.8 weeks.

According to the import schedule, Diesel of about 92.3 million litres was expected for delivery, while Petrol of about 47.0 million litres was expected for delivery to add to existing stockpiles (October 18, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

Total U.S commercial petroleum inventories increased by 1.0 million barrels last week

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for October 10, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.9 million barrels to 370.6 million barrels while gasoline stockpiles decreased by 4.0 million barrels to 208.4 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, decreased by 1.5 million barrels to 127.2 million barrels over the same period. Total commercial petroleum inventories increased by 1.0 million barrels last week.

Demand and Supply

The IEA cut its 2014 and 2015 oil demand growth by 200,000 and 300,000 bpd respectively

The International Energy Agency (IEA) cut its 2014 oil demand growth by 200,000 bpd to 0.7 million bpd. It again estimated that demand for oil in 2015 will grow far slower than previously forecast as global economies remain weak, and prices may extend their sharp fall so long as OPEC shows no sign of countering a supply surge.

The IEA said it cut its 2015 estimate for oil demand growth by 300,000 barrels per day (bpd) from its previous forecast and now expects demand growth of 1.1 million bpd to 93.5 million.

The EIA in its Weekly Petroleum Status report for October 10, 2014 reported that, U.S. crude oil imports averaged over 7.7 million barrels per day last week, up by 28,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.4 million barrels per day, 8.4% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 428,000 barrels per day. Distillate fuel imports averaged 145,000 barrels per day last week.
Total products supplied over the last four-week period averaged 19.3 million barrels per day, up by 1.6% from the same period last year.

Over the last four weeks, motor gasoline product supplied averaged 8.8 million barrels per day, down by 0.5% from the same period last year. Distillate fuel product supplied averaged about 3.8 million barrels per day over the last four weeks, up by 0.7% from the same period last year. Jet fuel product supplied is up 4.4% compared to the same four-week period last year.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Friday(October,03 2014)

OIL MARKET NEWS (WEEK 40): WEEK ENDED OCTOBER 3, 2014

  Major Highlights
  • Dated Brent experiences its lowest weekly average of the year at $93.40/bbl.
  • The weekly average GHS/USD exchange rate appreciates by 0.06%.
  • IS steps up attack on Syrian town of Kobane.
  • Ghana’s stock of petrol increases while diesel declines compared to the previous week.
  • Total U.S commercial petroleum inventories decrease by 5.8 million barrels last week.
Dated Brent experiences its lowest weekly average of the year at $93.40/bbl

Average Dated Brent price for the week (published by Platts) decreased by $1.74 to $93.40 per barrel from the previous week's average of $95.14 a barrel, indicating 1.83% decline.

Brent crude oil fell to its lowest weekly average of the year, as ample supplies, a lacklustre global economy and the strengthening of the U.S. dollar to a four-year peak against a basket of major currencies, outweighed concerns about potential loss of supply as a result of conflict in the Middle East.

Official Oil Price cuts from top producer Saudi Arabia added to supply glut worries and weak global economic data.

A Reuters survey found that, OPEC’s oil supply jumped to its highest in almost two years in September due to further recovery in Libya and higher output from Saudi Arabia and other Gulf producers in the face of sub-$100 per barrel oil prices.

The lack of any cutbacks underlines the relaxed view of OPEC’s core Gulf members to oil’s slide from $115 in June to $97 on Tuesday-a level they can tolerate, but which puts budgets in producers such as Iran and non-member Russia under pressure.

“The sentiment remains overwhelmingly bearish at the moment: there is little support for demand, while supply is strengthening,” Carsten Fritsch, a commodities analyst at Commerzbank, said.

Free on board (FOB) prices of Petrol decreased by $13.10 to $923.95/MT from the previous week's average of $937.05, indicating 1.40% decline; Diesel decreased by $12.60 to $796.05/MT from the previous week’s average of $808.65, indicating 1.56% decline; LPG decreased by $27.10 to $687.70/MT from the previous week’s average of $714.80, indicating 3.79% decline, during the period under review.

The weekly average GHS/USD exchange rate appreciates by 0.06%

The average GHS/US Dollar exchange rate strengthened compared to the previous week. The appreciation of the Ghana cedi against the USD, decreased marginally the impact of the exchange rate on the ex-pump price of petroleum products.

The GHS/US Dollar exchange rate for the period 29th September 2014 to 3rd October 2014 was 3.1987 compared to 3.2006 during the previous week (0.06% appreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 1.46%, 1.62% and 3.85% respectively, during the same period under review.

Geopolitics

IS steps up attack on Syrian town of Kobane

A BBC correspondent across the border in Turkey said mortars struck Kobane's eastern outskirts and there was heavy machine-gun and small arms fire.

IS has moved to within 1km (0.6 miles) of the town despite air strikes seeking to halt its two-week offensive. Turkey has promised it will do whatever it can to prevent the fall of Kobane.

Prime Minister Ahmet Davutoglu made the vow after the Turkish parliament authorised military operations against militants in Iraq and Syria, as well as the use of Turkish bases by foreign forces.

A US-led international coalition is carrying out air strikes against IS positions in Iraq and Syria. More than 160,000 Syrians, mainly Kurds, have fled across the border since IS launched an offensive to capture Kobane on 15 September.

Inventories

Ghana’s stock of petrol increases while diesel declines compared to the previous week

Ghana’s stock of Diesel and Petrol to last 1.4 and 3.7 weeks respectively (as at September 29, 2014). Diesel’s stock of 1.4 weeks compare unfavorably to last week’s stock to last of 1.9 weeks, while Petrol’s stock of 3.7 weeks compare favorably to last week’s stock of 2.9 weeks.

According to the import schedule, Diesel of about 110.1 million litres was expected for delivery, while Petrol of about 50.7 million litres was expected for delivery to add to existing stockpiles (October 4, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for September 26, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.4 million barrels to 356.6 million barrels while gasoline stockpiles decreased by 1.8 million barrels to 211.2 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, decreased by 2.9 million barrels to 128.3 million barrels over the same period. Total commercial petroleum inventories decreased by 5.8 million barrels last week.

Demand and Supply

Total U.S commercial petroleum inventories decrease by 5.8 million barrels last week

The EIA in its Weekly Petroleum Status report for September 26, 2014 reported that, U.S. crude oil imports averaged 7.3 million barrels per day last week, up by 414,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.5 million barrels per day, 6.3% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 504,000 barrels per day. Distillate fuel imports averaged 31,000 barrels per day last week.

Total products supplied over the last four-week period averaged over 19.2 million barrels per day, up by 1.1% from the same period last year.

Over the last four weeks, motor gasoline product supplied averaged 8.7 million barrels per day, down by 0.7% from the same period last year.

Distillate fuel product supplied averaged about 3.8 million barrels per day over the last four weeks, up by 0.8% from the same period last year. Jet fuel product supplied is down 2.6% compared to the same four-week period last year.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Friday(September,26 2014)

OIL MARKET NEWS (WEEK 39): WEEK ENDED SEPTEMBER 26, 2014

  Major Highlights

  • Brent crude oil trades in a range of $94-$96 per barrel
  • The average GHS/USD exchange rate weakens by 0.03% compared to the previous week
  • US and other allies hits IS oil targets in Syria
  • Ghana’s stock of petrol unchanged; diesel improves compared to the previous week’s stock levels
  • Total U.S commercial petroleum inventories increase by 0.9 million barrels last week.

Brent crude oil trades in a range of $94-$96 per barrel

Average Dated Brent price for the week (published by Platts) decreased by $1.86 to $95.14 per barrel from the previous week's average of $97.00 a barrel, indicating 1.92% decline.

Brent crude oil fell, pressured by rising supplies and a strong U.S. dollar which outweighed concerns about potential loss of supply as a result of conflict in the Middle East.

Also contributing to Brent crude oil drop was concerns about tepid demand for oil in Europe and China. "At the moment, supplies are abundant and demand is weaker," said Andrey Kryuchenkov, an analyst at London-based VTB Capital.

Losses were limited as the United States and several Gulf Arab allies launched strikes against Islamic State strongholds in Syria, and as a surprise pick-up in China's factory activity boosted the demand outlook. "Geopolitical risk is a factor in the market's mind ... but the market is dominated by supply," said Ric Spooner, chief market analyst at CMC Markets.

Free on Board (FOB) prices of Petrol decreased by $11.40 to $937.05/MT from the previous week's average of $948.45, indicating 1.20% decline; Diesel decreased by $17.65 to $808.65/MT from the previous week’s average of $826.30, indicating 2.14% decline; LPG decreased by $16.70 to $714.80/MT from the previous week’s average of $731.50, indicating 2.28% decline, during the period under review.

The average GHS/USD exchange rate weakens by 0.03% compared to the previous week

The average GHS/US Dollar exchange rate weakened at a slow pace compared to the previous week. The depreciation of the Ghana cedi against the USD, increased marginally the impact of the exchange rate on the ex-pump price of petroleum products. 

The GHS/US Dollar exchange rate for the period 22nd September 2014 to 26th September 2014 was 3.2006 compared to 3.1998 during the previous week (0.03% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 1.18%, 2.11% and 2.26% respectively, during the same period under review.

Geopolitics

US and other allies hits IS oil targets in Syria

The US, Saudi and UAE carried out airstrikes that killed 14 of IS fighters and five civilians in eastern Syria. The airstrikes were targeted at oil refineries controlled by the group.

According to the Pentagon, the refineries generated up to $2m (£1.2m) per day in revenue for the militants. In northern Syria, Kurdish forces say they have pushed back an IS advance.

US President Barack Obama has vowed to dismantle the IS "network of death". IS has seized large areas of Syria and Iraq in recent months and controls several oilfields.

Sales of smuggled crude oil have helped finance its offensive in both countries. The US has launched nearly 200 air strikes against the militants in Iraq since August and expanded the operation against IS to Syria.

Inventories

Ghana’s stock of petrol unchanged; diesel improves compared to the previous week’s stock levels

Ghana’s stock of Diesel and Petrol to last 1.9 and 2.9 weeks respectively (as at September 22, 2014). Diesel’s stock of 1.9 weeks compare favorably to last week’s stock to last of 0.7 week, while Petrol’s stock of 2.9 weeks remained unchanged from last week’s stock of 2.9 weeks.

According to the import schedule, Diesel of about 59.2 million litres was expected for delivery, while Petrol of about 51.1 million litres was expected for delivery to add to existing stockpiles (September 27, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for September 19, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.3 million barrels to 358.0 million barrels while gasoline stockpiles decreased by 0.4 million barrels to 213.0 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, increased by 0.8 million barrels to 131.2 million barrels over the same period. Total commercial petroleum inventories increased by 0.9 million barrels last week.

Demand and Supply

Total U.S commercial petroleum inventories increase by 0.9 million barrels last week

The EIA in its Weekly Petroleum Status report for September 19, 2014 reported that, U.S. crude oil imports averaged 6.9 million barrels per day last week, down by 1.2 million barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.6 million barrels per day, 4.7% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 510,000 barrels per day. Distillate fuel imports averaged 193,000 barrels per day last week.

Total products supplied over the last four-week period averaged 19.4 million barrels per day, up by 1.5% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 8.9 million barrels per day, and remained unchanged from the same period last year.

Distillate fuel product supplied averaged over 3.7 million barrels per day over the last four weeks, down by 0.2% from the same period last year. Jet fuel product supplied is up 3.4% compared to the same four-week period last year.

References

• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk

Wednesday(September,10 2014)

The essence of the National Petroleum Authority


The petroleum downstream industry has been a contest between the industry players (petroleum service providers) and the consumer. The industry wants profitability while the consumer wants value for money. None of these must occur at the expense of the other.    

It is for this reason that  the regulator (NPA) was established to innovate and adopt strategies to ensure that the industry remains efficient and profitable but at the same time consumers receive value for money.

This new paradigm was also designed to liberalise the sector and remove the inefficiencies, thereby lifting the government’s  “arm” from being the only source of supply and financier of the petroleum product requirements of the country, while paving the way for a free and efficient marketplace.

Poised to be a catalyst for Ghana’s economic transformation and growth, the mandate of the NPA, according to the NPA Act 2005 (Act 691), covers a broad spectrum of tasks. Among others, it is to regulate, oversee and monitor activities in the Petroleum Downstream Industry.

Downstream ?

By downstream, we mean all activities involved in the importation and refining of crude oil or the sale, marketing and distribution of refined petroleum products in the country.

The various commercial activities of the downstream industry in respect of petroleum products include: Importation, exportation, re-exportation, shipment, transportation, processing, refining, storage, distribution, marketing and sale of petroleum products.

Some achievements

The downstream petroleum industry has seen dramatic transformation in the past nine years. Key changes include:

Private sector participation in the petroleum downstream industry

The industry, for the first time in several years, has seen an unprecedented proliferation of investment and expansion of petroleum products storage and outlet facilities by the private sector, mostly dominated by a growing number of indigenous Ghanaian companies due to the deregulation of the petroleum downstream industry.

The authority has granted licences to a significant number of new entrants to operate as petroleum service providers (PSPs) in the industry. Consequently there are currently over 700 licensed companies in 20 different categories in the downstream sector.

At the moment, there are 21 oil trading companies and 24 bulk distributing companies that supplement production from the Tema Oil Refinery through the importation of finished petroleum products to meet the demand deficit. More than 500 transporters have been licensed to supply and transport petroleum products in the country.

Others include 81 oil marketing companies, 42 LPG marketing companies (LPGMCs), 22 bunkering companies, calibration companies, which used to be three before the establishment of the NPA but are now five; three lubricant manufacturing; three lubricant blending and marketing, nine petroleum products export companies, seven bulk oil storage depots, a new refinery, a mooring company, an emulsified fuels production company, and a stratification company, among others.

The involvement of the private sector in the importation of crude oil/ refined petroleum products has minimised the Government’s involvement in procuring or financing the petroleum product requirements of the country, thereby making more resources available for other developmental projects and programmes.

This has also resulted in the reliable supply of crude oil or petroleum products.

Unified Petroleum Pricing Fund (UPPF) Scheme

The NPA has put in place a UPPF scheme which ensures that there is regular supply of petroleum products to all parts of the country, irrespective of the geographical location, at the same price.

The UPPF sees to it that petroleum products are efficiently transported across the country in a manner that is simple, effective and inexpensive to operate administratively.

Protecting the interests of consumers

As a regulator, we are concerned about the growing number of calls by consumers with regard to the poor quality of fuel and inaccurate quantity of fuel dispensed at the pumps at various stations.

In order to ensure sanity in the sale and marketing of products in the petroleum downstream sector, the NPA introduced the Petroleum Product Marking Scheme (PPMS) to ensure that the quality of products is devoid of adulteration and meets the required specification as the one loaded from the depots to retail outlets. Offenders are duly sanctioned in accordance with LI 2187.

Additionally, the quantity of products offered for sale at the pump is assessed to ensure that the customer is not cheated. For this purpose, the NPA, in collaboration with the Ghana Standards Authority, developed and introduced the 10-litre measuring can to guide consumers at retail outlets and to give consumers the ability to verify the accuracy of dispensing pumps when they are in doubt.

Enhancing the performance of PSPs

Our focus at the NPA is to ensure that all stakeholders pitch in to further improve standards. The authority, in collaboration with other stakeholders has provided comprehensive guidelines and standards to guide the operations of various PSPs. This is aimed at improving the efficiency, compliance and safety of the industry.

Furthermore, the authority embarks on several nationwide inspections throughout the year to ensure that PSPs are operating according to the stipulated guidelines.

In conclusion, imagine a game of football where there is no referee, no rules and no standards; it becomes  a ‘free-for-all’ contest where the strongest takes advantage of the weak; or better still, it can be linked to the jungle’s “survival of the fittest”.

Therefore, it is worthy to note that the role the NPA plays in the petroleum downstream industry goes beyond just the pricing of petroleum products, contrary to comments by some think tanks and social commentators.

NPA’s operations include other management functions such as planning, research, monitoring and the setting of standards in the downstream petroleum industry.

Its existence and operations are vital in sustaining the development of the petroleum downstream industry in Ghana.
Friday(September,05 2014)

OIL MARKET NEWS (WEEK 36): WEEK ENDED SEPTEMBER 5, 2014

Major Highlights
  1. Brent crude oil trades in a range of $99-$101 per barrel.
  2. The average GHS/US Dollar exchange rate depreciates by 1.24% compared to the previous week.
  3. Libyan parliament reappoints former Prime Minister.
  4. Ghana’s stock of diesel increases; petrol declines compared to the previous week’s stock.
  5. U.S total commercial petroleum inventories increase by 1.5 million barrels the previous week.

Brent crude oil trades in a range of $99-$101 per barrel

Average Dated Brent price for the week (published by Platts) increased by $0.43 to $100.66 per barrel from the previous week's average of $101.10 a barrel, indicating 0.43% decline.

Brent crude oil fell marginally as Chinese and U.S. data pointed to slower-than-expected growth in the world's top oil consumers. Prospect of slowing oil demand growth in Europe, a strong dollar and ample supplies pushed prices down.

"The Chinese data, with imports showing disappointing results, indicates the domestic economy remains quite weak," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. Oil prices have been in steady decline since the end of June as concerns faded over supply disruptions from Iraq, Libya and Russia. Continued supply from key producing regions and tepid demand has left global markets well stocked.

Free on board (FOB) prices of Petrol increased by $5.99 to $970.30/MT from the previous week's average of $964.31, indicating 0.62% rise; Diesel decreased by $5.61 to $856.95/MT from the previous week’s average of $862.56, indicating 0.65% decline; and LPG decreased marginally by $0.75 to $754.25/MT from the previous week’s average of $754.25, indicating 0.10% decline, during the period under review.

The average GHS/US Dollar exchange rate depreciates by 1.24% compared to the previous week

The GHS/US Dollar exchange rate weakened for the second consecutive week after stabilizing the previous three weeks.

The depreciation of the Ghana cedi against the USD, increased the impact of the exchange rate on the ex-pump price of petroleum products.

The GHS/US Dollar exchange rate for the period 1st September 2014 to 5th September 2014 was 3.1736 compared to 3.1346 during the previous week (1.24% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 1.87%, 0.59% and 1.14% respectively, during the period under review.

Geopolitics

Libyan parliament reappoints former Prime Minister

Libya's parliament reappointed Prime Minister Abdullah al-Thinni as the government lost control of ministries in the capital where armed groups have taken over and a separate parliament has claimed legitimacy.

In another sign of the oil producer sliding deeper into anarchy, Islamist militants launched a new attempt to seize Benghazi's civilian and military airport from army forces allied to a renegade general. At least 13 soldiers from Haftar's forces were killed and 45 wounded, medics said.

The reappointment of Thinni, a former defence minister and career soldier who has been prime minister since March, sets him the challenge of reasserting government control over a country where many fear a descent into full-scale civil war.

Parliamentary spokesman Faraj Hashem said 64 of the 106 representatives present had voted for Thinni and the house had instructed him "to form a crisis government within a period of time not exceeding two weeks."

Inventories

Ghana’s stock of diesel increases; petrol declines compared to the previous week’s stock

Ghana’s stock of Diesel and Petrol to last 1.5 and 0.9 weeks respectively (as at September 1, 2014).

Diesel’s stock of 1.5 weeks compare favorably to last week’s stock to last of 1.4 weeks, while Petrol’s stock of 0.9 weeks compares unfavorably to last week’s stock of 2.0 weeks.

According to the import schedule, Diesel of about 46.7 million litres was expected for delivery, while Petrol of about 87.2 million litres was expected for delivery to add to existing stockpiles.

LPG of about 4.0 million kilogrammes was also expected for delivery by close of the week (September 6, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for August 29, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.9 million barrels to 359.6 million barrels while gasoline stockpiles decreased by 2.3 million barrels to 212.6 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, increased by 0.6 million barrels to 126.0 million barrels over the same period. Total commercial petroleum inventories increased by 1.5 million barrels last week.

Demand and Supply

U.S total commercial petroleum inventories increase by 1.5 million barrels the previous week.

The EIA in its Weekly Petroleum Status report for August 29, 2014 reported that, U.S. crude oil imports averaged over 7.7 million barrels per day last week, up by 42,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged over 7.7 million barrels per day, 5.8% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 801,000 barrels per day. Distillate fuel imports averaged 153,000 barrels per day last week.

Total products supplied over the last four-week period averaged over 19.7 million barrels per day, up by 2.7% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged about 9.1 million barrels per day, down by 0.7% from the same period last year.

Distillate fuel product supplied averaged 3.9 million barrels per day over the last four weeks, up by 5.1% from the same period last year. Jet fuel product supplied is up 1.3% compared to the same four-week period last year.

References
• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk
Friday(August,29 2014)

OIL MARKET NEWS (WEEK 35): WEEK ENDED AUGUST 29, 2014

  Major Highlights
  1.  Brent crude oil trades in a narrow range of $100-$101 per barrel.
  2.  The average GHS/US Dollar exchange rate depreciates for the second consecutive week.
  3.  Ukraine accuses Russia of plans to halt gas flow in winter to Europe.
  4.  Ghana’s stock of diesel and petrol improves compared to the previous week’s stock.
  5.  U.S total commercial petroleum inventories decrease by 1.4 million barrels last week.
Brent crude oil trades in a narrow range of $100-$101 per barrel

Average Dated Brent price for the week (published by Platts) increased by $1.15 to $101.10 per barrel from the previous week's average of $99.95 a barrel, indicating 1.15% rise. Brent crude oil edged up on worries that the intensifying Ukraine crisis may trigger more sanctions on Russia’s energy sector.

"We could see a little bit of a premium being applied to oil prices should those tensions continue to escalate," said OptionsXpress analyst Le Brun. Also supporting Brent crude oil was a strong U.S. economic data which pointed to strong demand in the world's largest oil consumer.

"The strong data in Chicago manufacturing is making people think that there could be something going on that will show up in demand numbers shortly," said Phil Flynn, an analyst at Price Futures Group in Chicago, Illinois.

However, Brent crude oil slipped in the course of the week as ample supply and softening demand in Europe and China weighed on the oil market.

Free on board (FOB) prices of Petrol increased by $17.51 to $964.31/MT from the previous week's average of $946.80, indicating 1.85% rise; Diesel went up by $7.01 to $862.56/MT from the previous week’s average of $855.55, indicating 0.82% rise and LPG went up by $13.55 to $754.25/MT from the previous week’s average of $740.70, indicating 1.83% rise, during the period under review.

The average GHS/US Dollar exchange rate depreciates for the second consecutive week

The GHS/US Dollar exchange rate weakened for the second consecutive week after stabilizing the previous three weeks.

The depreciation of the Ghana cedi against the USD, increased the impact of the exchange rate on the ex-pump price of petroleum products.

The GHS/US Dollar exchange rate for the period 25th August 2014 to 29th August 2014 was 3.1346 compared to 3.0654 during the previous week (2.26% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 4.15%, 3.09% and 4.13% respectively, during the period under review.

Geopolitics

Ukraine accuses Russia of plans to halt gas flow in winter to Europe

Ukraine's president said Russian troops had entered his country in support of pro-Moscow rebels who captured a key coastal town, sharply escalating a separatist war and prompting anger and alarm among Kiev's Western allies.

In a related development, Ukrainian Prime Minister Arseny Yatseniuk said Kiev knew of Russian plans to halt gas flows this winter to Europe, comments that were promptly denied by Russian Energy Minister Alexander Novak.

"The situation in (Ukraine's) energy sector is difficult. We know of Russia's plans to block (gas) transit even to European Union countries this winter, and that's why their (EU) companies were given an order to pump gas into storage in Europe as fully as possible," Yatseniuk told a government meeting, without disclosing how he knew about the Russian plans.

Inventories

Ghana’s stock of diesel and petrol improves compared to the previous week’s stock

Ghana’s stock of Diesel and Petrol to last 1.4 and 2.0 weeks respectively (as at August 25, 2014). Diesel’s stock of 1.4 weeks compares favorably to last week’s stock to last of 1.1 weeks, while Petrol’s stock of 2.0 weeks compares favorably to last week’s stock of 1.3 weeks.

According to the import schedule, Diesel of about 78.7 million litres was expected for delivery, while Petrol of about 37.6 million litres was expected for delivery to add to existing stockpiles.

LPG of about 5.2 million kilogrammes was also expected for delivery by close of the week (August 30, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for August 22, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.1 million barrels to 360.4 million barrels while gasoline stockpiles decreased by 1.0 million barrels to 214.9 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, increased by 1.3 million barrels to 125.4 million barrels over the same period. Total commercial petroleum inventories increased by 1.4 million barrels last week.

Demand and Supply

U.S total commercial petroleum inventories decrease by 1.4 million barrels last week

The EIA in its Weekly Petroleum Status report for August 22, 2014 reported that, U.S. crude oil imports averaged over 7.6 million barrels per day last week, up by 174,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged over 7.6 million barrels per day, 5.1% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 448,000 barrels per day. Distillate fuel imports averaged 77,000 barrels per day last week.

Total products supplied over the last four-week period averaged 19.8 million barrels per day, up by 2.1% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.0 million barrels per day, down by 1.4% from the same period last year.

Distillate fuel product supplied averaged over 3.9 million barrels per day over the last four weeks, up by 5.2% from the same period last year. Jet fuel product supplied is up 2.1% compared to the same four-week period last year.

References

• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk
Thursday(August,21 2014)

NPA TO INTRODUCE NEW CONDITIONS FOR LICENCE RENEWAL

 The National Petroleum Authority (NPA) is to come out with a new condition for oil marketing companies (OMCs) to retain their trading licences. The OMCs are now to secure bank guarantees from reputable banks that will pay their bills when they default in paying the bulk distribution companies (BDCs).

Anything contrary to satisfying the condition would lead to the revocation of oil marketing licenses by the NPA.

The directive, which would come into force in a fortnight, according to the Chief Executive Officer (CEO) of the NPA, Mr Moses Asaga, is aimed at ensuring sanity and improved liquidity in the petroleum trading sector.

He told the Daily Graphic in Accra that commercial banks were no longer willing to provide letters of credit (LCs) for the BDCs as a result of the OMCs huge indebtedness.

The situation, he explained, had led to the introduction of a cash and carry system by the BDCs, leading to the shortage of products in some parts of the country, with the hinterlands being the most affected.

Market share

Mr Asaga said that the BDCs were facing the liquidity crises because majority of them were fighting for market share, as a result of which they were giving out products to the OMCs without the necessary bank guarantees and any reasonable market recovery plans.

He said majority of the OMCs were thus taking advantage of the BDCs’ scramble for market share by failing to pay back after the expiration of the 90-day credit rolled out to them.

“The BDCs are partly to blame for the risky exposure to the OMCs as they have not been able to manage their credit terms and conditions responsibly,” Mr Asaga said.

“These acts have culminated in the credit crunch thereby tying up petroleum products in the system”, Mr Asaga added.

He indicated that majority of the OMCs, had over time, invested monies belonging tgo the BDCs after the sale of products into micro-finance and contract businesses, resulting form the relaxed manner in which the BDCs treated their credit covers.

He asked the BDCs to shorten the length of maturing cycle for LCs for the OMCs as this would help to improve liquidity and cash flow.

“They do not have to wait for 90-days. If it is brought down to 45-days it would tremendously improve liquidity in the sector and further avert incidents of shortage,” Mr Asaga.

BoG Intervention

Mr Asaga said following the commercial banks refusal to open LCs for the BDCs, resulting from the exhaustion of their credit limits and unpaid arrears over a two-year period, the government through the Bank of Ghana (BoG) had intervened with the provision of foreign exchange (forex) cover to enable them to pay the arrears.

He was hopeful that the measure introduced would reduce the huge indebtedness in the sector.

Source: Daily Graphic
Friday(August,15 2014)

OIL MARKET NEWS (WEEK 33): WEEK ENDED AUGUST 15, 2014

             MAJOR HIGHLIGHTS

1. Brent crude oil trades in a range of $100-$104 per barrel.
2. The average GHS/US Dollar exchange rate stabilises for the second consecutive week.
3. Libyan lawmakers agree to elect next president by popular vote.
4. Ghana’s current stock of diesel and petrol improves compared to last week.
5. U.S. crude oil production in July highest in 27 years.

Brent crude oil trades in a range of $100-$104 per barrel

Average Dated Brent price for the week (published by Platts) decreased by $1.66 to $101.67 per barrel from the previous week's average of $103.33 a barrel, indicating 1.61% decline.

Brent crude oil fell, weighed down as disappointing economic data from the European Union fuelled concern about demand, and also ample OPEC production indicating a well-supplied oil market. Growth in Germany and France grounded to a halt in the second quarter.

That disappointing data came just days after news that implied oil demand in China, the world's second-largest oil consumer, fell 6 percent in July from June.

OPEC said its members increased output in July despite violence in Iraq and Libya while trimming its 2014 demand growth forecast. Also weighing on Brent crude oil was U.S. intervention in Iraq that eased concerns over the risk of disruption to supply from OPEC's second-largest producer. U.S. air strikes on the Sunni insurgency calmed market worries over the risk to oil production, helping pull prices lower again.

"Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin," the International Energy Agency (IEA) said in its monthly report. "U.S. and EU sanctions on the Russian oil sector are not providing oil markets with much support either.

The consensus in the industry seems to be that neither set of sanctions will have any tangible near-term impact on supplies. Even for the medium term, their impact appears questionable," the IEA added.

Free on board (FOB) average prices of Petrol remained unchanged at $950.15/MT from the previous week's average of $950.15; Diesel went down by $5.05 to $869.90/MT from the previous week’s average of $874.95, indicating 0.58% decline and LPG went down by $9.10 to $745.90/MT from the previous week’s average of $755.00, indicating 1.21% decline, during the period under review.

The average GHS/US Dollar exchange rate stabilises for the second consecutive week.

The stability of the Ghana Cedi against the USD, lessen the impact of the international prices of petroleum products on the petroleum price build-up. The GHS/US Dollar exchange rate for the period 11th August 2014 to 15th August 2014 was 3.0350 compared to 3.0350 during the previous 2 consecutive weeks.

This resulted in the USD and GHS equivalent FOB prices of Petrol, Diesel and LPG been the same. FOB prices of Petrol remained unchanged, Diesel and LPG decreased by 0.58%, 1.21% respectively over the previous week’s prices.

GEOPOLITICS

Libyan lawmakers agree to elect next president by popular vote

Libya's new parliament agreed that the next president would be elected by a popular vote as lawmakers sought to overcome a confrontation between two armed factions.

Western partners hope the new parliament will open space for negotiations between rival militias and their political backers and return Libya to stability after a month of clashes that turned Tripoli and Benghazi into battlefields.

The House of Representatives voted overwhelmingly for the new president to be directly elected by the Libyan people as it seeks to put the country back on track towards democracy, three years after Muammar Gaddafi's fall in an uprising.

INVENTORIES

Ghana’s current stock of diesel and petrol improves compared to last week

Ghana’s current stock of Diesel and Petrol improves to 1.1 and 2.8 weeks respectively. Diesel’s current stock of 1.1 compares to last week’s stock of 0.4 weeks, while Petrol’s current stock of 2.8 weeks compares to last week’s stock of 2.3 weeks.

These improvements were mainly as a result of BDCs been able to establish LCs with their commercial banks. According to the import schedule, Diesel of about 96.2 million litres was expected for delivery, while Petrol of about 59.1 million litres was expected for delivery to add to existing stockpiles.

LPG of about 9 million kilogrammes was also expected for delivery by close of the week (August 16, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for August 1, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.4 million barrels to 367.0 million barrels while gasoline stockpiles decreased by 1.2 million barrels to 215.3 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, decreased by 2.4 million barrels to 125.1 million barrels over the same period. Total commercial petroleum inventories increased by 1.5 million barrels last week.

DEMAND and SUPPLY

U.S. crude oil production in July highest in 27 years

U.S. crude oil production averaged an estimated 8.5 million barrels per day in July, the highest level since April 1987, the Energy Information Administration said. In its monthly short term energy outlook, the EIA also raised its crude production forecasts for this year to 8.5 million bpd from its previous estimate of 8.42 million bpd and for next year's output to 9.3 million bpd from 9.27 million bpd previously.

The EIA in its Weekly Petroleum Status report for August 1, 2014 reported that, U.S. crude oil imports averaged over 7.8 million barrels per day last week, up by 283,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged over 7.6 million barrels per day, 4.6% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 470,000 barrels per day. Distillate fuel imports averaged 151,000 barrels per day last week.

REFERENCES

• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk
Friday(August,08 2014)

OIL MARKET NEWS (WEEK 32): WEEK ENDED AUGUST 8, 2014

Major Highlights

  1. Brent crude oil trades in a range of $102-$104 per barrel.
  2. The average GHS/US Dollar exchange rate stabilizes over last week’s rate.
  3. Fighting in Libya spreads from Tripoli to Zawiya town, around 20 km from Zawiya port.
  4. Ghana’s current stock of diesel to last 0.4 weeks; petrol to last 2.3 weeks.
  5. U.S June petroleum imports drop to 3-1/2 year low.
  6. OPEC revises 2014 global oil demand growth forecast to 1.1 million, down 30,000bpd.
Brent Crude Oil in a range of $102-$104 barrel.

Average Dated Brent price for the week (published by Platts) decreased by $1.94 to $103.33 per barrel from the previous week's average of $105.27 a barrel, indicating 1.94% decline.

Brent crude oil fell as ample supply in global markets was compounded by worries over the impact of trade sanctions on global economic growth. "This continued escalation between the EU, U.S. and Russia over sanctions will be a negative for global economic growth," said Olivier Jakob, oil analyst at Petromatrix consultancy in Switzerland.

However, Brent crude oil rose after the United States approved air strikes against Islamist militants in Iraq, raising concerns over the security of oil supplies from OPEC's second largest producer. "The market will look very close at what happens next, and whether oil supplies from southern Iraq could be under threat," Tetsu Emori, a commodity fund manager at Astmax Co Ltd in Tokyo.

Free on board (FOB) prices of Petrol decreased by $31.95 to $950.15/MT from the previous week's average of $982.10, indicating 3.25% decline; Diesel went down by $11.95 to $874.95/MT from the previous week’s average of $886.90, indicating 1.35% decline and LPG went down by $35.00 to $755.00/MT from the previous week’s average of $790.00, indicating 4.43% decline, during the period under review.

Ghana Cedi/US Dollar exchange rate stabelizes over last week's rate 

The stability of the Ghana Cedi against the USD, lessen the impact of the international prices of petroleum products in the petroleum price build-up.

The GHS/US Dollar exchange rate for the period 4th August 2014 to 8th August 2014 was 3.0350 compared to 3.0350 during the previous period. This resulted in the USD and GHS equivalent FOB prices of Petrol, Diesel and LPG been the same.

FOB prices of Petrol, Diesel and LPG decreased by 3.25%, 1.35% and 4.43% respectively over the previous week’s prices.

GEOPOLITICS

Fighting in Libya spreads from Tripoli to Zawiya town, around 20 km from Zawiya Port.

Clashes in Libya spread from Tripoli to the western town of Zawiya near Tunisia's border, where a large oil port is located, killing four people, local town council officials said.

The fighting in Zawiya is part of a broader struggle between two loose confederations of former rebels and their political allies whose rivalries have exploded into street battles that have killed more than 200 people in the past three weeks.

Foreign governments have mostly closed their embassies and evacuated staff after three weeks of clashes turned Libya's two main cities - Tripoli and Benghazi - into warzones in the worst fighting since the NATO-backed war against Muammar Gaddafi.

Zawiya port is connected to El Sharara in the southern desert and its pipelines started operating a few months ago after months of blockades by armed protesters. "

The clashes are around 20 kilometers from the port. The port is operating normally, and at least one tanker leaves everyday exporting oil," Youssef Hamza, managing director of Zawiya port told Reuters.

He added that "All fuel depots for domestic consumption and for exports are full, and all tankers load once they arrive."

INVENTORIES

Ghana’s current stock of Diesel to last 0.4 weeks while  Petrol to last 2.3 weeks.

Current stock of Diesel and Petrol declines to about 0.4 and 2.3 weeks respectively. Diesel’s current stock of 0.4 compares to last week’s stock of 1.3 weeks, while Petrol’s current stock of 2.3 weeks compares to last week’s stock of 2.5 weeks.

These reduction in stock levels is as a result of financial hold on imports of these products. Diesel and Petrol stocks of about 45 million litres and 23.2 million litres respectively are under financial hold.

According to the import schedule, Diesel of about 72.5 million litres was expected for delivery, while Petrol of about 56.3 million litres was expected for delivery to add to existing stockpiles.

LPG of about 7 million kilogrammes was also expected for delivery by close of the week (August 09, 2014).

The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.

U.S June Petroleum Imports drop to 3-1/2 year low.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for August 1, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.8 million barrels to 365.6 million barrels while gasoline stockpiles decreased by 4.4 million barrels to 216.5 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 1.8 million barrels to 127.5 million barrels over the same period.

Total commercial petroleum inventories decreased by 8.4 million barrels last week.

DEMAND AND SUPPLY

OPEC revises 2014 global oil demand growth forecast to 1.1 million, down 30,000bpd.

The U.S. trade deficit narrowed more than expected in June as petroleum imports dropped to a 3-1/2 year low, suggesting that trade was less of a drag on second-quarter economic growth than initially thought.

In June, imports fell 1.2 percent, the largest drop in a year, to $237.4 billion. That came as petroleum imports declined to $27.4 billion, the lowest level since November 2010, from $28.3 billion in May.

A domestic energy boom has seen the country reduce its dependence of foreign oil, helping to ease pressure on the current account deficit.

The petroleum deficit fell to its lowest level since May 2009. There was a jump in crude oil exports. Rising exports bode well for economic growth prospects for the rest of the year.

Exports to Canada hit an all-time high in June. Exports to China rose 1.4 percent, while imports from that country increased 3.7 percent.

Elsewhere, OPEC trimmed its 2014 global oil demand growth forecast for a second consecutive month and said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies.

In a monthly report, the Organization of the Petroleum Exporting Countries trimmed its projection for growth in global oil demand this year to 1.10 million barrels per day (bpd), down 30,000 bpd.

This is the second consecutive time it has cut the forecast. OPEC also trimmed forecast global demand for its crude oil in 2014 to 29.61 million bpd, down 70,000 bpd from the previous estimate, citing the lower demand forecast and a higher expectation of non-OPEC supply.

The report also showed OPEC's crude output in July rose. According to secondary sources cited by the report, output increased by 170,000 bpd to 29.91 million bpd, led by higher supply in Libya and Saudi Arabia.

REFERENCES
• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk 

Tuesday(August,05 2014)

SAFETY TIPS FOR MOTORISTS AT A FILLING STATION

Dear Motorists anytime you are at any filling station to buy fuel, you should concentrate and observe these tit bits BEFORE AND AFTER YOU ARE SERVED to ensure your safety and value for money.

1.Pull up at the pump Island before your fuel tank is opened.

2.Switch off your engine.

3.Closely observe both the quantity and price indicators of the pump; ensure that it reads ZERO, before you are served.

4.Avoid mobile phone conversations and please be attentive for the moment and be involved in the process.

5.Do not smoke in the forecourt of the filling station.

6.Do not buy fuel dispensed from a pump with a Ghana Standard Authority’s `RED STICKER`.

7.Ensure that the Ghana Standards Authority’s ‘GREEN STICKER’ is displayed on the serving dispensing pump.

8.Open your tank and request the attendant to serve you. Make your request in litres or the cedi equivalent (not in gallons).

9.Ensure that the quantity / volume of product on the display is in litres.

10.Observe the amount indicated on the pump display is what you are paying for.

11.If you suspect any foul play, report to the manager or supervisor of the station. If you are not satisfied, contact the NPA on Vodafone toll free number 080012300 or on NPA’s main lines 0302-766195/6.

Viewing 1 to 15 of 36 Total News Items