The Oil Drum

165 comments on The National Petroleum Council Report

Comments can no longer be added to this story.

westexas on July 18, 2007 - 10:20am

Any mention in the report of the recent rapid increases in domestic consumption in oil exporting countries?

Interesting news item:

VLCC Tanker Rates to Japan Fall About 50% From Last Summer
No collapse forecast as tanker rates fall near year lows
Reuters
Published: July 04, 2007, 00:00

"We wouldn't speak of it as a freight collapse...but it does seem to have moved into a softer summer trading market that we've had in previous years," said Clare Grierson, an analyst with Simpson, Spence & Young in London.

E.A. Gibson shipbrokers said VLCC voyage rates to Japan were trading at WS105 or $67,200 a day in June 2006 compared with WS59 or $34,750 on Monday.

Note that Mexico's cash flow from oil export sales is increasing faster (for now, in their "Phase One" Net Export Decline) than their oil exports are declining:

http://www.bloomberg.com/apps/news?pid=20601086&sid=asL_Fmzu80R4&refer=n...
Mexico's Peso Rises to Highest in Almost a Month on Oil Prices

By Valerie Rota

July 17 (Bloomberg) -- Mexico's peso rose to the highest against the dollar in almost a month amid a surge in the price of oil, the biggest source of government revenue.

``Oil has a big effect on the peso,'' said Eduardo Perez, who helps oversee $5 billion in assets in Mexico City at Grupo Nacional Provincial SA, the country's biggest insurance company. ``The incoming flows prop up the currency.''

Mexico's peso rose 0.3 percent to 10.747 per dollar today. It earlier touched 10.7294, the highest since June 20. The peso was the second-best performer against the dollar among the 16 most active currencies after the pound.

Income from oil exports make up about 40 percent of government revenue. Crude oil prices rose today above $75 a barrel in New York for the first time in more than 11 months before closing little changed at $74.05. Prices are up 21 percent this year.

Comments can no longer be added to this story.

PeakTO on July 18, 2007 - 1:37pm

WT,

I wonder if maybe some of the VLCC rate drop isn't because there is a glut of tankers - not only from reduced deliveries - but also from excess new tankers.

Many new tankers have been planned for years, based on growing demand and Yerginism. Some new tankers must have been delivered this year, but only to find that there is less deliveries of oil taking place even for last years fleet.

So the problem is amplified...hence the 50% rate drop.

Plausible. That means that 2008 may be interesting for shipbuilding as well...defaults on delivery, cancelled contracts...etc.

2008 really shaping up to be turning point in many ways.

Comments can no longer be added to this story.

memmel on July 18, 2007 - 1:45pm

I've read a few times that we are in the middle of phasing out single hull tankers for all double hull not sure what the status is of this. But in the interim you would have a tanker glut.

Comments can no longer be added to this story.

PeakTO on July 18, 2007 - 1:48pm

But those would have been scheduled replacements, and then there is NEW capacity.

If they accelerate the replacement/retire of older fleet with NEW capacity, still leaves deliveries of tankers on the books that are not needed...so will still lead to a crunch in shipbuilding in the near future.