15 October 2014 Regional Petroleum Fuel and Gas Price Review October 2014 WHATS INSIDE: 1.0 World Market Movement 2.0 Asia mogas (gasoline 97, 95 & 92 RON) 3.0 Asian jet fuel /kerosene 4.0 Diesel (Gasoil 10, 50 & 500 ppm) 5.0 Saudi Aramco Liquefied Petroleum Gas (LPG) Prices (propane & butane) contract price 6.0 Singapore-Australia Clean Tanker Freight Rates 7.0 Exchange Rates Annex: Graphs SPC Petroleum Advisory Service has prepared a petroleum product price review for October 2014 which analyses daily Mean of Platts Singapore (MOPS) published prices for September 2014. This review also includes benchmark Saudi Aramco LPG prices (sourced from Gas Energy Australia). 1.0 World Market Movement Crude oil and fuel product prices have steadily decreased during the month of September, with declines up to US$10 per bbl. This would normally translate to reduction in fuel prices in the Pacific Islands region of about US 6 cents per litre over the coming months. This will be somewhat offset by the depreciation of some regional currencies against the US dollar over the same period. Over the last decade, leading oil majors have been seeking to sell or convert their Australian refineries, which have lagged behind their newer and larger counterparts in Asia. Closures during this period have created the need to import nearly 300 kb/d of fuel into Australia, which is about a third of Australia's annual fuel demand. In October this year, Caltex will complete its conversion of Kurnell refinery to a major import terminal, while Vitol and Trafigura have made investments to develop fuel storage facilities and retail businesses. With the closure of refinery capacity, Australia will become increasingly reliant on imported petroleum products, and this import demand will help absorb some of Asia's excess volumes. United States in September issued another round of sanctions targeting Russia s energy, defense and financial sectors. This latest round of sanctions are in response to Russia s continued activity in Ukraine, and are designed to impact that nation s deep water, Arctic and shale oil production plans. Similar action was taken by the European Union, and in combination could impact US oil companies that produce oil with Russia. Despite the geopolitical tensions and continued unrest in northern Iraq, global oil prices continue to point lower (Source: AAA Fuel Gauge Report). 2.0 Asia mogas (Gasoline 97, 95 & 92 RON) The Asian gasoline market weakened in September due to ample supply in the region as a result of refineries running at full capacity and due to slump in crude oil prices. 3.0 Asian jet fuel/kerosene The Asian jet/kerosene price decreased as surplus barrels of jet fuel/kerosene from China and Middle East continued to outweigh steady demand for middle distillate. HEADQUARTERS: SECRETARIAT OF THE PACIFIC COMMUNITY, PO BOX D5, NOUMEA CEDEX, NEW CALEDONIA SERVICES SIEGE DE L ORGANISATION: SECRÉTARIAT GÉNÉRAL DE LA COMMUNAUTÉ DU PACIFIQUE, B.P. D5, NOUMÉA CÉDEX, NOUVELLE- CALÉDONIE CABLE ADDRESS: SOUTHPACOM, NOUMEA, TELEPHONE: (687) 263818, TELEX: 3139 NM SOPACOM ADDRESSE TÉLÉGRAPHIQUE: SOUTHPACOM, NOUMÉA, TÉLÉPHONE: (687) 262000, TÉLÉCOPIEUR: (687) 263818, TÉLEX: 3139 NM SOPACOM
4.0 Diesel (Gasoil 10, 50 & 500 ppm) The Asian gasoil prices decreased amid lackluster demand and oversupply in the Asia Pacific and the Middle East. Regional demand while steady had been unable to absorb excess supply available as production in Asia held steady. 5.0 Singapore-Australia Clean Tanker Freight Rates The freight market strengthened in September, resulting in an increase in the overall freight component in this month s prices. East of Suez, spot freight rates on reported route Singapore to Australia increased by 3.20% from last month. The Singapore Australia route was assessed at 180.82 WS points, an increase of 5.60 WS points from the previous month. 6.0 Saudi Aramco Liquefied Petroleum Gas (LPG) Prices (propane & butane) contract price State-run Saudi Aramco has cut its October contract price for propane to $735 a tonne, down $10 from the September level while Butane prices for September 2014 were also cut to $765 a tonne, down $20 from September level of $785. The prices provide a benchmark against which Middle East sales of liquefied petroleum gas (LPG) to Asia are priced. Following is a table of Saudi Aramco's contract prices of propane and butane per tonne in U.S. dollars. Table 1.0 Monthly average of Saudi Aramco LPG (propane and butane) contract prices Monthly average of Saudi Aramco Butane and Propane prices Propane (UDS/T) Butane (USD/T) October Average 735.00 765.00 September Average 745.00 785.00 Difference (Oct avg. Sept avg.) -10.00-20.00 % Change -1.34-2.55 (Source: Gas Energy Australia) 7.0 Exchange Rates: All major currencies depreciated against the US dollar from the average rate in August. The Samoan Tala remained relatively stable. HEADQUARTERS: SECRETARIAT OF THE PACIFIC COMMUNITY, PO BOX D5, NOUMEA CEDEX, NEW CALEDONIA SERVICES SIEGE DE L ORGANISATION: SECRÉTARIAT GÉNÉRAL DE LA COMMUNAUTÉ DU PACIFIQUE, B.P. D5, NOUMÉA CÉDEX, NOUVELLE-CALÉDONIE CABLE ADDRESS: SOUTHPACOM, NOUMEA, TELEPHONE: (687) 263818, TELEX: 3139 NM SOPACOM ADDRESSE TÉLÉGRAPHIQUE: SOUTHPACOM, NOUMÉA, TÉLÉPHONE: (687) 262000, TÉLÉCOPIEUR: (687) 263818, TÉLEX: 3139 NM SOPACOM
Table 2.0 Monthly averages of currencies against the US Dollar Monthly average of currencies against the US Dollar Australian Euro Fijian Kina New Zealand Samoan Solomon Tongan Vatu XPF Tala Pa anga *Exchange *Exchange *Exchange *Exchange *Exchange *Exchange *Exchange *Exchange *Exchange *Exchange rate (AUD to rate (Euro to rate (FJD to rate (Kina to rate (NZD to rate (WST to rate (SBD to rate (TOP to rate (Vatu to rate (XPF to USD @) USD @) USD @) USD @) USD @) USD @) USD @) USD @) USD @) USD @) September Average 0.9071 1.2910 0.5280 0.3918 0.8159 0.4237 0.1359 0.5246 0.0103 0.0108 August Average 0.9306 1.3328 0.5369 0.3956 0.8440 0.4237 0.1366 0.5363 0.0105 0.0111 Difference (Sept avg. -0.0235-0.0418-0.0089-0.0038-0.0281 - -0.0007-0.0117-0.0002-0.0003 Aug avg.) % Change -2.53-3.14-1.66-0.96-3.33 - -0.51-2.18-1.90-2.70 Exchange rates from www.oanda.com Net Result: Regional pump fuel prices are expected to slightly decrease as Singapore prices decreased in September. However, an increase in freight rates and depreciation of major currencies will put an upward pressure on fuel prices. The Samoan Tala and the Solomon Islands dollar remained unchanged against the US dollar. Furthermore regional LP gas prices will slightly decrease as Saudi Aramco's contract prices for both propane and butane decreased for October. The Secretariat looks forward to any feedback on this submission. Sincerely Pritanshu Singh [Ms] for Petroleum Adviser
Annex 1 Source: Platts Asia-Pacific/Arab Gulf Marketscan Source: Platts Asia-Pacific/Arab Gulf Marketscan HEADQUARTERS: SECRETARIAT OF THE PACIFIC COMMUNITY, PO BOX D5, NOUMEA CEDEX, NEW CALEDONIA SERVICES SIEGE DE L ORGANISATION: SECRÉTARIAT GÉNÉRAL DE LA COMMUNAUTÉ DU PACIFIQUE, B.P. D5, NOUMÉA CÉDEX, NOUVELLE- CALÉDONIE CABLE ADDRESS: SOUTHPACOM, NOUMEA, TELEPHONE: (687) 263818, TELEX: 3139 NM SOPACOM ADDRESSE TÉLÉGRAPHIQUE: SOUTHPACOM, NOUMÉA, TÉLÉPHONE: (687) 262000, TÉLÉCOPIEUR: (687) 263818, TÉLEX: 3139 NM SOPACOM
Source: Platts Asia-Pacific/Arab Gulf Marketscan Source: Platts Asia-Pacific/Arab Gulf Marketscan
Source: Platts Asia-Pacific/Arab Gulf Marketscan *Note: Platts has lowered the sulphur specification of its flagship Singapore Gasoil assessment to 500 ppm from 0.5% (5,000 ppm) on January 2, 2013, hence the reason why gasoil 500ppm and gasoil prices are the same from January 2, 2013. Source: Platts Asia-Pacific/Arab Gulf Marketscan *Note: Dated Brent crude oil used for calculating refiners margin.
Source: Platts Asia-Pacific/Arab Gulf Marketscan Source: Gas Energy Australia
Source: Platts Clean Tankerwire *Note: Exchange rates sourced from www.oanda.com
Data Sources: 1. Exchange rates is sourced from www.oanda.com 2. LPG price is sourced from http://gasenergyaustralia.asn.au/ 3. Prices for diesel, gasoline and jet/kerosene prices are provided by Platts (The McGraw-Hill Companies, Inc). Abbreviations bbl ppm RON MT USD/bbl Barrel (of oil) Parts per million Research Octane Number Metric Tonne US dollars per barrel