Oil Daily | OPEC Maintains Production Cuts Amid U.S. Pressure; U.S. Crude Inventories Rise Significantly

【Oil-Producing Countries Dynamics】

OPEC has decided to maintain its production policy despite U.S. calls for increased oil supply. The cartel's secretary-general emphasized their market decisions are based on technical analysis, aiming to maintain market stability. These decisions are credited for reducing oil volatility compared to other commodities.

U.S. President Donald Trump urged OPEC to end production cuts to lower global oil prices and influence the Ukraine war's outcome. However, OPEC and U.S. oil industry leaders have not responded favorably to these calls.

【Global Oil Supply and Demand】

The U.S. Energy Information Administration forecasts a 1.9 million barrels per day rise in global hydrocarbon production, attributed to OPEC's relaxed cuts and increased non-OPEC production. However, current OPEC cuts may limit global oil inventories, potentially supporting prices and prompting a possible relaxation of production cuts.

【Latest Oil Policies】

Dutch climate activists have escalated their case against Shell to the Supreme Court to enforce emission reductions, despite Shell's appeal win. The Supreme Court will review procedural aspects rather than facts to determine the case's outcome.

【Industry News】

The American Petroleum Institute reported a significant rise in U.S. crude oil inventories, surpassing expectations. The U.S. Department of Energy recorded a slight increase in Strategic Petroleum Reserve inventories, although levels remain below pre-withdrawal figures.

Saudi Arabia's Motiva Enterprises expanded its refinery capacity to 654,000 barrels per day, making it the largest U.S. refinery. This expansion contrasts with smaller refineries' closures, highlighting a shift toward larger, more efficient operations.

Germany's Trading Hub Europe is in discussions with authorities for potential subsidies to refill gas storage amidst depleting inventories and rising prices. EU nations consider government support to ensure storage levels reach 90% by November 2025.

【Company News】

Chevron's acquisition of Hess Corp aims to boost its reserves with high-quality Guyana acreage. The deal faces challenges, including arbitration from Exxon and CNOOC, who claim rights to Hess's stake in the Stabroek block.

Energy Transition Minerals hopes for a Greenland government change to repeal uranium extraction bans affecting the Kvanefjeld rare earth deposit. This could revitalize foreign investments and development in Greenland's mineral resources.

BP plans to reset its strategy after reporting its lowest profits in years, with a focus on improving cash flow and returns. The company will communicate its new strategy on February 26 as it faces pressure from investors and activist groups.

【Others】

Vessel transits through the Red Sea remain stable following the Iran-backed Houthis' announcement to limit attacks on vessels linked to Israel. Despite this, shipping firms prefer longer routes to avoid potential conflicts.

Russia's energy trade with India continues despite U.S. sanctions targeting Russian oil. India seeks clarification from the U.S. on sanctioned tankers, aiming to secure Russian oil below the $60 per barrel price cap.

Germany's Deutsche ReGas canceled a floating regasification unit due to financial losses, blaming a state-owned competitor's subsidized pricing. The company remains in contact with the government for future solutions amidst underutilized LNG import terminals.