middle east

SIMON SAYS: The pendulum keeps swinging back and forth

Submitted by Simon Hill on Mon, 11/18/2019 - 17:00

It’s looking as if it’s been another one of those weeks in the LPG world, where defining a forward view of the market could go one of many ways, and the backcloth is an ARB market that initially headed south but has now regained some broader momentum. In today’s SIMON SAYs I’ll take a look at what the key indicators are up to, and what has happened to them over the last couple of weeks, to see if there’s a clearer direction going forward, as cargoes are starting to be talked for the January 2020 arrival period in Asia.

SIMON SAYS: On the one hand the U.S., on the other hand Asia, but what’s in the middle!

Submitted by Simon Hill on Mon, 11/11/2019 - 17:00

The beauty of the U.S. NGL market is that it’s full of statistics, in fact, America does statistics very well, just take a look at American sports and you’ll see why. With so many numbers to digest in the NGL world, it tends to draw our attention to the U.S. more often than not, maybe too much. Not surprisingly it does influence what I see and think, and I’m starting to believe the U.S. has taken over as the driving force of the whole international market.

SIMON SAYS: E might = MC2, but LPG Exports don’t always equal Export Capacity!

Submitted by Simon Hill on Wed, 11/06/2019 - 17:00

In yesterday’s SIMON SAYS I told the post shale story for U.S. LPG exports, especially those from the U.S. Gulf coast, and how once everybody had signed up to buy at high terminal fees, the bottom suddenly caved in on the market in the summer of 2016, and it was here to stay for longer than anyone ever wanted. The result was that Chinese end-users began to cancel, or try to renegotiate their term contracts, as they could take advantage of cheaper Middle East product and discounted naphtha. That’s putting it kindly, what was really happening was wholesale reneging!

SIMON SAYS: Let me know if you see a bear around – anywhere will do!

Submitted by Simon Hill on Mon, 10/28/2019 - 17:00

Yesterday I was in my comfort zone, the market action was clearly at the front of the curve, where some real time world LPG supply issues were having a significant influence on demand decisions in Asia, as we enter that winter run-in, just like the old days. Middle East LPG exports in October down, down from Saudi Arabia and right down out of Iran. U.S. Gulf exports at no change, despite being told we were supposed to be getting a 15% increase in export slots late third quarter.

SIMON SAYS: There’s something brewing out there...

Submitted by Simon Hill on Sun, 10/27/2019 - 17:00

It’s so tempting to say I told you so, but it feels as if now is one of those moments, as the physical world for once is clearly calling the shots, and more importantly it’s shaping the market, especially as we near the pivot point, where the northern hemisphere winter begins.

SIMON SAYS: If the Chicago Bulls were able to play the Chicago Bears, the Bulls would be winning!

Submitted by Simon Hill on Mon, 10/14/2019 - 17:00

In yesterday’s SIMON SAYS I explored what was happening with the capacity expansion at Enterprise’s Houston Ship Channel facility. It’s a bit like Brexit, where we were given a date on which we would leave the European Union, but we still don’t know if it’s going to happen, and if it is, then when?

SIMON SAYS: Saudi Contract Pricing – If you can’t beat’em, join’em

Submitted by Simon Hill on Mon, 09/30/2019 - 17:00

In yesterday’s SIMON SAYS we started to explore the Saudi Aramco Contract Price (CP) and asked the question “how do parties really make money from CP related contracts out of the Middle East?” We went a little way down memory lane, but what seemed to be the answer, maybe not the only answer, lay in the end year activities, both calendar and fiscal, of the Japanese LPG importers and the value of the product they hold in storage.

SIMON SAYS: CP – What goes up...must go even higher

Submitted by Simon Hill on Sun, 09/29/2019 - 17:00

I’ve always found it difficult to understand how on earth anyone makes money with an LPG purchase deal based on Saudi Aramco’s Contract Price (CP). In fact, I’ve rarely found anyone else who knows how it’s done either. But around this time of year, every year, CP becomes the talk of the market, as if it possesses this mesmerizing draw, sucking in believers and non-believers by the score.

SIMON SAYS: What makes ship owners smile?

Submitted by Simon Hill on Tue, 09/24/2019 - 17:00

There’s nothing that makes a ship owner smile more than seeing a decent number of ships getting fixed in the market, of course the grin widens if the rates are also edging up, and if the levels are jumping up, well I’ll leave that one for you to decide. As all eyes last week were focused on the consequences of the drone attack at Saudi Arabia’s key crude oil processing facility in Abqaiq, charterers hesitated for a while, but not for that long.

SIMON SAYS: What happens next – cargo hunting States side!

Submitted by Simon Hill on Mon, 09/23/2019 - 17:00

Yesterday I explored the implications for LPG as a result of last week’s drone attack on the Abqaiq crude processing facility in Saudi Arabia, that the damage is probably far greater than has been explained so far, and that Saudi Arabia’s current focus is on security, crude oil and the impending IPO of Aramco.