Oil Daily | Libya Resumes Over 1 Million BPD Production, Easing Middle East Supply Shock Concerns

【Global Oil Supply and Demand】

Natural gas-fired power generation in the U.S. has reached record highs, with a 5% increase from last year. Gas now accounts for a record 46% of U.S. power generation, challenging clean energy goals. Rising power demand, driven by electrification and data centers, is fueling this increase.

Bringing electricity to hundreds of millions globally requires $21.3 billion by 2030, per GOGLA. Most of those without electricity live in sub-Saharan Africa, where access has worsened. Off-grid solar is the cheapest solution, but financial support is crucial. The World Bank and African Development Bank are planning a $120 billion project for electrification.

The UK plans to increase electricity imports from the EU after closing its last coal power plant, boosting its winter capacity cushion to 8.8%. New interconnections and battery storage are key factors. However, increased European demand in winter may limit exports. The EU is expanding its interconnector network, also supporting Ukraine.

Libya’s oil production exceeded 1 million bpd after political factions agreed on central bank leadership. Production resumed after more than a month of suspension due to political disputes. The resolution restores significant crude supply, alleviating fears of a Middle East-induced supply shock.

Norway projects a 5.2% rise in oil production in 2025, driven by the Johan Castberg field. Natural gas output will slightly decrease. The government anticipates significant petroleum revenues, though lower than in 2023. Future exploration and discoveries are vital for maintaining stable production.

【Oil-Producing Countries Dynamics】

Saudi Arabia increased the price of its Arab Light crude for Asia amid Middle East tensions, exceeding expectations. Prices for the U.S. and Europe were cut, possibly to regain market share. This reflects divergent regional demand expectations, with stronger demand anticipated in Asia.

【Industry News】

Chevron is selling its Canadian oil sands and shale assets to Canadian Natural Resources for $6.5 billion as part of its portfolio optimization strategy. This sale contributes to Chevron's divestment goals, while Canadian Natural Resources enhances its oil sands and light crude assets.

Port restrictions in Florida are in effect as Hurricane Milton approaches, threatening to become a Category 5 storm. Chevron closed its Blind Faith platform in the Gulf of Mexico as a precaution. Meteorologists warn of major storm surges, though most Gulf energy assets are outside Milton's path.

【Company News】

Chevron has shut down its Blind Faith platform due to Hurricane Milton's approach, maintaining production at other Gulf locations. The hurricane, expected to impact Florida, has prompted precautionary measures in the Gulf. Shell has similarly shut down production in response to previous hurricanes.