Oil Daily | Ineos Buys CNOOC's U.S. Assets Amid Libya's Oil Disruption and Crude Price Fluctuations

【Company News】

China’s CNOOC has agreed to sell its U.S. business to Britain's Ineos for $2 billion, which includes stakes in Gulf of Mexico deep-water fields. This acquisition will enhance Ineos' oil production capabilities and aligns with its strategy to compete in the energy transition and carbon storage projects.

Ineos' acquisition of CNOOC’s U.S. business marks its third major investment in the U.S. oil and gas sector. This follows prior deals with Sempra Energy and Chesapeake Energy, totaling over $3 billion, and provides a new growth platform. CNOOC's sale is driven by market conditions and Western sanctions concerns.

CNOOC may consider selling more Western assets, though currently, it continues operations in Canada. Recently, it initiated production in a new Canadian project, Lake Northwest, expected to peak at 8,200 barrels of crude daily next year.

【Oil-Producing Countries Dynamics】

Libya's Zawiya refinery experienced fires due to armed clashes, prompting a temporary force majeure by the National Oil Corporation. Although fires are controlled, force majeure remains. Libya's oil production recently increased to 1.59 million barrels daily, but political tensions pose ongoing challenges to stability.

Libya's oil production has steadily improved following resolutions of political disputes. However, recent refinery fires highlight persistent risks. Despite this, the return of companies like Eni and BP suggests a potential for continued stability and growth in Libya's oil sector.

【Others】

Crude oil prices fell as traders took profit ahead of the Fed's rate decision. Expectations of a rate cut could later boost prices. Factors include geopolitical risks and non-OPEC supply growth, with analysts forecasting varied price movements next year due to oversupply and demand factors.

The oil market's demand growth in 2025 is expected to be modest, with strong non-OPEC supply growth and OPEC's spare capacity providing market comfort. Interest rate changes and non-OPEC supply dynamics remain uncertain, while China's oil demand is stabilizing post-lockdown.

Lower U.S. interest rates could favor oil prices, but non-OPEC supply and demand uncertainties persist. China's post-pandemic oil demand surge appears unlikely as its economy normalizes, creating an uncertain price outlook for the coming year.