A gas pump selling E15, a gasoline with 15 percent of ethanol, is seen in Mason City, Iowa, United States, May 18, 2015. Over the past few months, privately held retailers Kum & Go and Sheetz have become the first significant chains to announce plans to start selling E15, 50 percent more than the typical U.S. blend. REUTERS/Jim… Acquire Licensing Rights
Nov 24 (Reuters) – The White House is stalling action on requests by Farm Belt states to allow regional sales of gasoline blended with higher volumes of ethanol after oil industry warnings that the move could cause regional supply disruptions and price spikes, according to two sources familiar with the matter.
The decision underscores concerns within President Joe Biden’s administration over fuel prices, as opinion polls show inflation and the economy as key vulnerabilities for his 2024 re-election bid. In an NBC News poll released on Sunday, just 38% of respondents approved of Biden’s handling of the economy.
Governors from eight Midwestern states – Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin – petitioned the Environmental Protection Agency last year to let them sell gasoline blended with 15% ethanol, or E15, all year, arguing it would help them lower pump prices that soared following Russia’s invasion of Ukraine in February 2022.
The EPA last March issued a proposal that would approve the request by the governors. The agency subsequently missed deadlines to finalize the proposal after oil refiners including HF Sinclair Corp (DINO.N) and Phillips 66 (PSX.N) warned that a patchwork approach to approving E15 sales would complicate fuel supply logistics and raise the risk of spot shortages.
U.S. gasoline typically contains 10% ethanol.
The two sources familiar with the administration’s thinking, speaking on condition of anonymity, said the White House decided to delay action on the matter following the oil industry’s warnings in part because of concern that higher pump prices in certain states could hurt Biden’s re-election chances.
White House and EPA officials declined to comment on the matter.
Ethanol, a domestically produced alternative fuel most commonly made from corn, is cheaper by volume than gasoline. Adding more of it to the fuel mix can lower prices by increasing overall supply. But the U.S. government restricts sales of E15 gasoline in summer months due to environmental concerns over smog.
The ethanol industry for years has pushed to lift the restrictions on E15 sales nationwide, arguing the environmental impacts have been overstated.
Nebraska and Iowa sued the EPA in August for missing its statutory deadlines on the request by the governors. In its October response, the EPA did not deny it that missed the deadlines and did not offer an explanation.
The oil and ethanol lobbies have produced dueling studies that show how allowing E15 in some states would impact prices, with predictable results. Oil industry-backed studies showed price increases, while ethanol industry-backed studies showed any price increases offset by utilizing lower-cost ethanol.
University of Houston energy economist Ed Hirs said the average U.S. consumer does not understand oil markets, leaving the White House and Biden’s re-election campaign vulnerable to accusations that approving the requests by the governors caused fuel prices to spike, even if something else was to blame.
“There is an unwritten rule that high gas prices mean the incumbent won’t get re-elected,” Hirs said.
Reporting by Jarrett Renshaw and Stephanie Kelly; Editing by Will Dunham
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JAKARTA, Nov 14 (Reuters) – Indonesia’s Coordinating Ministry for Maritime and Investment Affairs has signed an initial agreement with Exxon Mobil (XOM.N) to explore potential investment in a petrochemical project in the country, the ministry said in a statement.
The potential project is expected to produce polymer and may utilise carbon storage facility Exxon is currently reviewing with state oil company Pertamina, it said.
The agreement was signed during Indonesia’s President Joko Widodo’s U.S. trip this week.
During the same trip, Pertamina and Exxon also agreed to move ahead with their evaluation to invest over $2 billion for carbon capture and storage (CCS) facilities using two basins in the Java Sea, Pertamina said in a separate statement on Tuesday.
The CCS hub has the potential to store at least 3 gigatons of carbon emitted by carbon-intensive industries in Indonesia and the rest of the region, Pertamina Chief Executive Nicke Widyawati said.
Jack Williams, senior vice president at Exxon Mobil, said Exxon and Pertamina have the potential to reduce emissions and support economic growth in Indonesia.
Reporting by Fransiska Nangoy and Bernadette Christina; Editing by Tom Hogue
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JAKARTA, Oct 27 (Reuters) – Indonesia on Friday flew its first commercial flight using palm oil-blended jet fuel, as the world’s biggest producer of the commodity pushes for wider use of biofuels to cut fuel imports.
Operated by flag carrier Garuda Indonesia, the Boeing 737-800NG aircraft carried more than 100 passengers from the capital Jakarta to Surakarta city about 550 kilometres (342 miles) away, Garuda Indonesia CEO Irfan Setiaputra said.
“We will discuss further with Pertamina, Energy Ministry and other parties to ensure this fuel is commercially reasonable,” Irfan said during a ceremony, adding the plane was set to return to Jakarta later on Friday.
Garuda conducted several tests including a flight test on the new fuel earlier this month and an engine ground test in August.
The palm-oil blended jet fuel is produced by Indonesian state energy firm PT Pertamina (PERTM.UL) at its Cilacap refinery, using hydroprocessed esters and fatty acid (HEFA) technology and is made of refined bleached deodorized palm kernel oil.
Pertamina has said the palm-based fuel emits less atmosphere warming greenhouse gases compared with fossil fuels, and palm oil producing countries have called for the edible oil to be included in feedstock for the production of sustainable aviation fuel (SAF).
“In 2021, Pertamina successfully produced 2.0 SAF in its Cilacap unit using co-processing technology and was made of refined bleached deodorized palm kernel oil with production capacity 1,350 kilolitres per day,” said Alfian Nasution, a director at Pertamina.
Meanwhile, Harris Yahya, a director at Energy Ministry said the use of biofuel would lower the greenhouse effect.
The aviation industry, a major emitter of greenhouse gases, is looking for ways to cut its carbon footprint by using alternative fuels.
Experts say the industry will need 450 billion litres of SAF a year by 2050, if the fuel is to account for around 65% of the mitigation needed to achieve net-zero targets.
But some countries have raised concerns over the potential for deforestation in the production of palm oil from plantations. The European Union has imposed import restrictions on the commodity.
In 2021, Indonesia ran a test flight with the same fuel on an aircraft made by state-owned Dirgantara Indonesia, flying from the city of Bandung in West Java to the capital Jakarta.
Indonesia has mandated 3% biofuel blending by 2020 for jet fuel, but implementation has been delayed.
Reporting by Bernadette Christina; Editing by Kanupriya Kapoor and David Evans
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RIO DE JANEIRO, Sept 28 (Reuters) – The head of Brazil’s state oil firm Petrobras (PETR4.SA) said on Thursday it will sign a memorandum of understanding with mining giant Vale (VALE3.SA) to study potential joint ventures in renewable energy, even as looks to new suppliers for diesel.
“Vale is a consumer (of energy) and probably very interested in hydrogen production, it has some activities in energy transition that are interesting,” Petrobras CEO Jean Paul Prates told reporters, saying the companies would look for synergies.
The partnership would come at a time when Petrobras is pushing to move into renewable energy. Earlier this month, the state-run firm unveiled plans to develop offshore wind farms.
Regarding diesel, Prates said Petrobras could if necessary and strategic import the fuel from abroad as bans on Russian imports – the main source of imported diesel in Brazil – could force the country to look for suppliers elsewhere.
Russia surpassed the United States as Brazil’s top supplier this year.
“We’re going to import to meet our contracts and possibly one or two more quotas that are necessary and that we see as an opportunity to enter a new market or a new customer that is good for us,” Prates said.
Meanwhile, spiking oil prices have widened the gap between Petrobras’ refinery prices and those charged abroad, which analysts say is discouraging third-party imports. Petrobras last adjusted its gasoline and diesel prices in mid-August.
“The models, for the time being, indicate it’s possible to maintain the same level with absolutely no risk to the company’s profitability,” said Prates.
Petrobras’ refinery utilization factor is currently at a rate of 94%, he added.
Reporting by Marta Nogueira; Editing by Steven Grattan and Sarah Morland
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SYDNEY, Sept 18 (Reuters) – Asian shares fell and the dollar was firm on Monday as investors looked ahead to policy meetings from the Federal Reserve, the Bank of Japan and other central banks this week.
Europe is set for a subdued open, with EUROSTOXX 50 futures off 0.1%. S&P 500 futures advanced 0.2% while Nasdaq futures edged up 0.1%.
Oil prices hit fresh 10-month peaks, further stoking inflationary pressures. U.S. West Texas Intermediate crude futures gained 0.8% to $91.52, their highest level since November, while Brent crude futures rose 0.7% to $94.55 per barrel.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.7%. Japan’s Nikkei (.N225) is closed for a public holiday.
Technology shares in the region retreated, with Taiwan’s TSMC (2330.TW), the world’s top contract chipmaker, falling 3% after Reuters reported that it has told its major suppliers to delay the delivery of high-end chipmaking equipment
In China, better-than-expected factory output and retail sales in the world’s second largest economy have aided Chinese bluechips (.CSI300) which were up 0.4%.
But property sector woes dragged Hong Kong’s Hang Seng (.HSI) 1% lower.
Zhongrong International Trust, which has exposure to Chinese property developers, said over the weekend it was unable to make payments on some trust products on time.
“Despite the encouraging sign of stabilization, the property market continues to be the missing puzzle piece in the economic picture,” said Tommy Xie, head of Greater China Research at OCBC Bank.
“The on-the-ground feedback indicates a rise in property viewing activities; however, most prospective buyers are not in a hurry to finalize deals due to the increasing supply of apartments post relaxation.”
Shares in embattled China Evergrande Group (3333.HK) fell as much as 25% after police in southern China detained some staff at its wealth management unit, though they later pared losses to be down 1.6%.
This week, global central banks will take centre stage, with five of those overseeing the 10 most heavily traded currencies holding rate-setting meetings. A swathe of emerging market central banks will also hold meetings.
Markets are fully priced for a second straight pause from the Fed on Wednesday, with its targeted range expected to be unchanged at 5.25% to 5.5%, so the focus will be on the updated economic and rates projections. They see about 80 basis points of cuts next year.
“In theory, the FOMC meeting should be a low-volatility affair, but it is a risk that needs to be managed,” said Chris Weston, head of research at Pepperstone.
Weston added that if the Fed revises up its rate projections for 2024, that would see rate cuts being priced out, resulting in renewed interest in the U.S. dollar and downward pressure on global shares.
On Thursday, Bank of England is tipped to hike for the 15th time and take benchmark borrowing costs to 5.5%.
Bank of Japan is the key risk event on Friday. Markets are looking for any signs that the BOJ could be moving away from its ultra-loose policy faster than previously thought, after recent comments by Governor Kazuo Ueda sent yields much higher.
Last Friday, Wall Street ended sharply lower as U.S. industrial labour action weighed on auto shares. Rising Treasury yields also pressured Amazon (AMZN.O) and other megacap growth companies.
Cash Treasuries were not traded in Asia with Tokyo shut. Treasury yields edged higher on Friday, with the two-year above the 5% threshold.
In the currency markets, the U.S. dollar was still standing strong near its six-month top at 105.25 against a basket of major currencies.
The euro gained 0.1% to $1.0667, after slumping to a 3-1/2 month low of $1.0632 last week as the European Central Bank signalled its rate hikes could be over.
The price of gold was 0.2% higher at $1,928.13 per ounce.
Reporting by Stella Qiu; Editing by Shri Navaratnam and Edwina Gibbs
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WASHINGTON, Sept 13 (Reuters) – The U.S. Energy Department has talked to oil producers and refiners to ensure stable fuel supplies at a time of rising gasoline prices, Jared Bernstein, head of the White House Council of Economic Advisers, said on Wednesday.
Rising U.S. gasoline prices were largely behind the largest increase in U.S. consumer prices in 14 months in August.
Gasoline prices jumped 10.6% in August after climbing 0.2% in July, accounting for more than half the increase in the Consumer Price Index. Gasoline prices peaked at $3.984 per gallon in the third week of August, according to data from the U.S. Energy Information Administration, up from $3.676 per gallon during the same period in July.
Reporting By Jeff Mason and Jarrett Renshaw
Editing by Chris Reese and David Gregorio
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BEIJING, July 13 (Reuters) – China’s crude oil imports in June jumped 45.3% on the year to the second-highest monthly figure on record, customs data showed on Thursday, with refiners building up inventories despite tepid domestic demand.
Crude imports in June totalled 52.06 million metric tons, or 12.67 million barrels per day (bpd), the data from the General Administration of Customs showed.
It was a substantial increase on the 8.72 million bpd imported in June last year, when the economy was battered by widespread COVID-19 lockdowns.
Crude imports also held their upward momentum on a month-on- month basis, up 4.58% from May’s 12.11 million bpd.
Total imports for the first half were 282.07 million metric tons, up 11.7% from 252.52 million in the corresponding period last year.
Teapot refiners in the eastern province of Shandong stepped up runs as authorities lifted curbs on the import of diluted bitumen in late June, helping to ease inventory pressure at its ports.
More broadly, however, inventories continue to rise against an uncertain macroeconomic backdrop. Commodities consultancy Vortexa estimated onshore crude inventories at 980 million barrels at the end of June, just 20 million barrels below an all-time record in August 2020.
While kerosene demand is up strongly on the year, boosted by a resumption in flights after the removal of curbs on travel, weakness in the manufacturing and property sectors has hurt demand for diesel, despite government stimulus measures.
“The long-haul spot barrels were booked when (arbitrage) windows were open, despite soft demand when the cargos arrived in June,” said Emma Li, a China oil markets analyst at Vortexa in Singapore.
China imported 10.39 million metric tons of natural gas in June, up 19.2% from 8.72 million a year ago when importers cut spot purchases amid high global liquefied natural gas (LNG) prices. Total gas imports for the first half stood at 56.63 million metric tons, a 5.8% increase on last year.
Refined fuel exports rose 40.6% to 4.51 million metric tons from 3.21 million in June last year, but down from the previous month’s 4.89 million metric tons.
Reporting by Andrew Hayley; Editing by Himani Sarkar, Shri Navaratnam and Jamie Freed
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BEIJING, May 11 (Reuters) – China has decreased its second batch of export quota volumes for refined oil products, consultancies and trader sources said on Thursday, focusing on local demand during the refinery overhaul season and boosting domestic sales amid poor export margins.
The export volumes, comprising 9 million tonnes of refined products and 3 million tonnes of marine fuel, were allotted primarily to state-owned refiners, according to two refining sources and consultancies Longzhong and JLC.
China Petrochemical Corp (Sinopec) , China National Petroleum Corp , China National Offshore Oil Company <0883.HK> and Sinochem Group (600500.SS) were the main recipients of these quotas, taking around 92% of the total allocation.
Reuters has asked the four companies for comment.
In addition, private refiner Zhejiang Petrochemical Corp, a refinery subsidiary of state defence conglomerate Norinco and China National Aviation Fuel Company were assigned 1.01 million tonnes.
China’s Ministry of Commerce did not immediately respond to a faxed request for comment.
The quota was less than the first batch of 18.99 million tonnes in early January but double the allocation of 4.5 million tonnes issued around a year earlier, Reuters records show.
The smaller export quota comes as refiners stockpile products amid strong demand expectations for gasoline and diesel in the peak summer season.
China’s gasoline and diesel export volumes have fallen for three consecutive months as refiners kept more cargoes for the domestic market where they are earning better profit margins, despite overall slow domestic demand growth.
While refiners have been unwilling to export because of the stronger local margins, the year-on-year increase in quotas mean that they can still choose to export should domestic demand turn weak at some point in time.
Longzhong estimated refiners could lose about 482 yuan ($69.73) a tonne on gasoline exports and 734 yuan a tonne on diesel exports in the current market.
“This year, quota holders have greater flexibility to prepare export plans and capture arbitrage opportunities,” said Energy Aspects analyst Sun Jianan.
The 3 million tonnes of low-sulphur fuel export quotas in this second batch was down from 8 million tonnes in the first batch for this year.
However a trader from a state-owned Chinese oil company said the previous batch of low-sulphur fuel quotas had yet to be used up as marine bunkering demand was weak in the first quarter.
($1 = 6.9121 Chinese yuan renminbi)
Reporting by Andrew Hayley in Beijing and Muyu Xu and Trixie Yap in Singapore; Editing by Jacqueline Wong
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LAUNCESTON, Australia, May 4 (Reuters) – The strong start to the year for Asia’s imports of crude oil came to a halt in April, with arrivals dropping to a seven-month low as top buyers China and India trimmed purchases.
A total of 108 million tonnes, or 26.39 million barrels per day (bpd) was imported by Asia last month, according to data compiled by Refinitiv Oil Research.
This was down from March’s 27.6 million bpd, which in turn was lower than February’s 29.4 million bpd and the 29.13 million bpd in January.
The decline in April arrivals was led by China, the world’s largest crude importer, with Refinitiv estimating imports at 10.67 million bpd, down from the 34-month high of 12.37 million bpd in March.
It was always likely that China’s imports would pull back in April as that month and May are the peak season for refinery maintenance.
But after the strong start to the year for China’s crude oil imports, there are now several question marks over the outlook for coming months, as the rebound in the world’s second-biggest economy appears uneven.
The official manufacturing Purchasing Managers’ Index (PMI) dropped to 49.2 in April from 51.9 in March, slipping below the 50-level that demarcates expansion from contraction for the first time since December.
The PMI was also below market expectations for a positive outcome of 51.4.
Manufacturing is one of the key pillars of China’s economy from a commodity demand perspective, the others being construction and infrastructure.
The news here is somewhat mixed, with infrastructure investment rising 8.8% year-on-year in the first quarter, outpacing a 5.1 rise in overall fixed-asset investment, while property investment fell 5.8%.
There is also the question of crude prices and the lag between moves in these and imports, given the time between refiners ordering oil and its delivery can be as long as three months.
Crude oil prices were kicked higher at the start of April when the OPEC+ group of producers surprised the market by announcing an additional 1.16 million bpd of output cuts.
Benchmark Brent futures rose from just below $80 a barrel to a peak of $87.49 a barrel on April 12, but have since slipped back to end at $72.33 on Wednesday as concerns over global growth trumped fears of tighter supply.
Nonetheless, the rise in Brent futures, which was accompanied by higher official selling prices for May cargoes from Middle East exporters such as Saudi Arabia, may put a dampener on Chinese demand for May and June cargoes.
INDIA SLOWS IMPORTS
This could extend to other major buyers in Asia, with the region’s second-biggest importer India showing signs of moderating crude appetite in April.
Imports were estimated at 4.60 million bpd in April, down from the eight-month high of 5.02 million bpd in March.
It’s also worth noting that India’s refiners are continuing to switch to cheaper Russian crude, with arrivals in April at 1.68 million bpd, only slightly down from the record high of 1.72 million bpd in March.
Russia has become India’s largest crude supplier, displacing erstwhile OPEC+ ally Saudi Arabia, with India’s April imports from the kingdom dropping to the lowest since September 2021.
Russian crude is also winning against Saudi oil in China, with April arrivals of 2.10 million bpd beating out the 1.73 million bpd from the Middle East’s top exporter.
Outside of the two Asian heavyweights, there was a mixed picture with number three importer Japan recording arrivals of 2.77 million bpd, up slightly from March’s 2.52 million, while fourth-ranked South Korea saw imports slip to 2.56 million bpd in April, a 10-month low and down from 2.96 million bpd in March.
The overall view on Asia’s imports is that April showed a loss of momentum after a strong start to the year.
Whether the slower April imports are mainly because of technical and temporary factors such as refinery maintenance, or if they signal the soft global economy is starting to drag Asian demand will become clearer in May and June.
The opinions expressed here are those of the author, a columnist for Reuters.
Editing by Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
April 25 (Reuters) – Oil slipped on Tuesday after two sessions of gains as uncertainty about the global economic outlook and a firmer dollar countered investor optimism about demand in China and expectations of a drop in U.S. crude inventories.
The dollar rose as worries about corporate earnings and the outlook for the global economy deepened. A stronger dollar makes oil more expensive for other currency holders and tends to reflect reduced investor risk appetite.
“A recovering dollar is weighing on sentiment,” said Stephen Brennock of oil broker PVM. “I suspect that upcoming macro releases concerning U.S. house prices and consumer confidence are also keeping buyers on the sidelines.”
Brent crude fell 70 cents, or 0.9%, to $82.03 a barrel at 1200 GMT, while U.S. West Texas Intermediate crude dropped 65 cents to $78.11. Both contracts rose over 1% on Monday.
“The general level of risk appetite has turned increasingly sour again today with losses seen across most commodity markets,” said Saxo Bank commodity strategist Ole Hansen.
Oil was up earlier in the day supported by investor optimism that holiday travel in China would boost fuel demand and by expectations U.S. inventories would show a drop in crude stocks.
Involuntary and planned supply cuts also lent support. Iraq’s northern oil exports have shown little sign of an imminent restart after a month of standstill, and members of the OPEC+ producer group are starting a voluntary cut in May.
Still, investors remain wary about central banks in the United States, Britain and the European Union potentially raising interest rates further to curb inflation, which could slow economic growth and dent energy demand.
The U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates at their upcoming meetings. The Fed meets on May 2-3.
Traders on Tuesday awaited data from industry group the American Petroleum Institute on U.S. stockpiles. Analysts expect crude inventories to fall by about 1.7 million barrels.
Reporting by Stephanie Kelly; Editing by Sonali Paul
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