Oil Daily | U.S. Crude Inventories Surge Unexpectedly Amid Geopolitical Tensions

【Global Oil Supply and Demand】 Despite the increase in renewable energy adoption, global capacity is not on track to triple by 2030 as outlined at the COP28 summit. The IEA predicts significant growth, with solar and wind leading the charge, but emphasizes the need for better integration of renewables into power systems. Crude oil inventories in the U.S. saw a surprising increase of 10.9 million barrels for the week ending October 4. This unexpected build contrasts with previous expectations and trends, emphasizing the complexity of supply dynamics and the impact of geopolitical tensions on market sentiments. Low natural gas prices, hotter weather, and new capacity led U.S. natural gas-fired power generation to record highs this summer. The shift towards more renewables and natural gas, alongside a decrease in coal usage, has transformed the U.S. electricity generation landscape. 【Oil-Producing Countries Dynamics】 Indian refiners are increasing imports of Venezuelan crude, facilitated by U.S. sanctions exemptions. Indian Oil Corp and MRPL have purchased significant quantities, indicating a strategic shift to secure more heavy crude supplies and manage costs effectively. Libya’s crude oil and condensate production has resumed, reaching over 1 million bpd after a political resolution ended a standoff. This return to production alleviates market fears of supply shocks amid Middle Eastern tensions. Russian oil officials are considering a ban on diesel exports for non-producing firms, following price hikes and concerns over subsidies. Despite the potential shortage fears, officials insist domestic production exceeds demand, aiming to stabilize local markets. 【Latest Oil Policies】 Russia is debating a potential ban on diesel exports for firms not producing it due to rising prices and subsidy concerns. The current ban on gasoline exports remains, and officials ensure domestic supply stability despite market challenges. 【Industry News】 U.S. natural gas-fired power generation hit record highs this summer due to favorable conditions and increased capacity. The shift in the U.S. electricity generation mix reflects a growing reliance on renewables and natural gas over coal. 【Company News】 Kinder Morgan is shutting terminals in Tampa in anticipation of Hurricane Milton, which threatens to disrupt fuel and product logistics. Chevron has also shut its Blind Faith platform as part of hurricane preparations, highlighting the storm's potential impact on operations. 【Others】 Gas stations in Florida face shortages as evacuations ahead of Hurricane Milton strain supplies. With Florida being a major gasoline consumer without its own refineries, logistical challenges are intensified as tankers and trucks work to meet demand.