Tampa:
President Biden’s executive order on his first day in office rescinding a presidential permit to operate the cross-border Keystone XL Pipeline could hamper the ability to draw Canadian sulfur into U.S. markets, sources speculated.
Citing the immediate loss of 2,000 existing jobs and as many as 59,000 more estimated to be created over the pipeline’s lifespan, Alberta Premier Jason Kenney issued a call for diplomatic action against the U.S. government, should the Biden administration refuse to engage in dialogue concerning the matter.
“Failing an agreement with the American government, we call on the Government of Canada to respond with consequences for this attack on Canada’s largest industry,” Kenney posted to his official Facebook page. “We are not asking for special treatment, simply the same response that Canada’s government had when other areas of our national economy were under threat from the U.S. government.”
Kenney later clarified in a press conference that he was seeking the imposition of sanctions by Prime Minister Justin Trudeau, according to local news reports.
The controversial pipeline has been touted as a cleaner alternative to the transportation of crude by alternative means, such as rail and truck. But the Keystone project remains vehemently opposed by Native American and environmental groups, citing the potential for spills and accidental releases over Native-owned land, as well as the forced application of eminent domain over land viewed as sacred by some Native groups.
President Biden’s order to rescind the permit came as part of a broader reshuffling of U.S. energy policy, as the incoming administration seeks to move toward more sustainable sources of power.
Genscape on Jan. 20 reported crude distillation unit (CDU) production returning to normal at the Monroe Energy refinery in Trainer, Pa. Activity at the 104,000 barrel/d unit had been reduced since Jan. 13. Reduced activity continued at a 23,000 barrel/d hydrocracker at the site, reported ongoing since Jan. 18, while a 26,000 barrel/d vacuum distillation unit (VDU) has remained offline since March 2020.
The first-quarter contract price of molten sulfur delivered to Tampa was settled at $96/lt CFR, rising $27/lt from the $69/lt CFR fourth-quarter 2020 level.
A schedule change from the U.S. Energy Information Administration delayed the release of refinery utilization and crude input data to the afternoon of Jan. 22. As a result, data for the week ending Jan. 15 was not available at press time.
U.S. Gulf:
A 49,000 barrel/d hydrocracker was restarted on Jan. 18 at the Valero Energy Corpus Christi West refinery, Genscape noted. The unit was taken offline on Jan. 2, while a 32,000 barrel/d VDU has been shut since Feb. 25, 2020.
A hydrogen plant was reportedly taken offline on Jan. 21 at Valero’s Corpus Christi East plant, and increased activity was noted from a 17,000 barrel/d coking unit offline since Jan. 4. A 10,000 barrel/d catalytic reformer has been offline since April 8, while an 11,000 barrel/d hydrocracker has remained shut since June 15, 2019.
Price ideas on the Gulf export market were reported firming to $108-$113/mt FOB for the week, based on rising values at Brazil. Seller participation on the Gulf spot market was said to remain constrained due to ongoing reduced run rates at U.S. refineries stemming from the COVID-19 pandemic.
Brazil:
Sources described last-done at Brazil firming to $130-$133/mt CFR. The spot market was previously quoted at $119/mt CFR. Citing new offers up to $140/mt CFR, players predicted further increases in the next round of trading.
Vancouver:
Price ideas at Vancouver lifted to the $110-$118/mt FOB range for the week, sources indicated, increasing from $95-$100/mt FOB reported previously. Next-done was expected to come near the $120/mt FOB mark.
Alberta:
Alberta sulfur netbacks firmed to (-)$31-(-)$48/mt FOB based on rising values at Vancouver, up from (-)$31-(-)$30/mt FOB in the prior report.
West Coast:
The West Coast prill market followed Vancouver higher, firming to $110-$118/mt FOB from $95-$100/mt FOB at last report. Molten contracts for the first quarter were quoted in the $70-$77/lt FOB range, increasing from $45-$60/lt FOB in the prior period.
China:
China achieved a record 13.45 million barrel/d average refinery output in 2020, according to data compiled by the country’s National Bureau of Statistics and reported by Reuters.
The output was roughly three percent higher than calendar-year 2019, equating to a 410,000 barrel/d year-over-year increase, and belied a quick rebound from the demand reduction suffered early in the year from the coronavirus. Refinery outputs were reduced in the February-April period due to widespread lockdowns in the country.
Outputs for December lifted 2.1 percent compared to one year earlier, with refiners processing an average 14.13 million barrels/d for the period, just shy of the 14.2 million barrel/d record set in November.
Global refining margins were seen falling for the week ending Jan. 8, Platts reported, as prices for refinery products failed to keep pace with firming crude values.
Prices were noted rising on the China import spot sulfur market. Players quoted last-done firming to $132-$138/mt CFR, up from $125-$132/mt CFR published previously, while new offers reportedly bent toward the high side of $140-$150/mt CFR on Jan. 21. More firming was predicted ahead of the country’s Feb. 12 Lunar New Year holiday.
ADNOC:
Abu Dhabi National Oil Co. offers for January were heard at $102/mt FOB Ruwais, up $22/mt from $80/mt FOB in December.
Qatar:
Posted prices for Qatar sulfur were heard at $101/mt FOB Ras Laffan for loading in January, rising from $82/mt in December. A recent tender floated by Muntajat was heard drawing bids in the $120s/mt FOB. Sources believed the tender had not been awarded as of Jan. 21.