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Oil Daily | Alaska Sues Biden Over Arctic Drilling; Russia, OPEC Output Cuts Boost Bullish Sentiment

AInvestWednesday, Jan 8, 2025 7:00 am ET
2min read
【Oil-Producing Countries Dynamics】

The state of Alaska is suing the Biden Administration over its decision to restrict land in an oil and gas lease sale, violating a Congress mandate. Alaska claims the restrictions make development economically impossible, challenging the administration's approach to drilling in the Arctic National Wildlife Refuge.

President-elect Donald Trump plans to reverse outgoing President Biden's offshore drilling ban, vowing to open areas for oil and gas development. Trump faces legal challenges, but his administration aims to expand fossil fuel exploration, contrasting Biden's environmental stance.

Sudan has lifted a force majeure on oil flows from South Sudan, allowing Dar Petroleum Operating Company to resume production. This follows improved security conditions and will boost South Sudan's economy, as oil exports are crucial for its state revenues.

Russian crude oil production fell in December, dropping below the OPEC agreement cap. Despite past overproduction, Russia plans to compensate with deeper cuts. Upcoming sanctions from the Biden Administration could further impact Russian exports.

【Latest Oil Policies】

Incoming U.S. President Donald Trump may issue an order to protect gas appliances from regulations that aim to phase them out. Trump opposes Biden-era environmental policies, advocating for consumer choice in using natural gas-powered devices.

【Industry News】

Hess CEO John Hess predicts a more balanced oil market by 2025, despite demand concerns from China and increased U.S. production. He highlights growth prospects in Guyana and shale efficiency improvements, while noting potential political risks from Iran and Venezuela.

The UK's aging power grid faces challenges as wind power becomes predominant, leading to increased grid management costs. Constraints prevent efficient energy distribution, and substantial investments in infrastructure are needed to match renewable generation capacity with demand.

Wind power became the UK's largest electricity source in 2024, surpassing natural gas. Renewable energy accounted for over 50% of the UK's electricity, marking a milestone towards net-zero goals. The UK still relies heavily on natural gas, underscoring the need for further decarbonization.

【Company News】

Exxon anticipates weaker Q4 2024 profits due to lower refining margins, despite gains from asset sales. The company's long-term plans include boosting production in the Permian and Guyana, aiming for 5.4 million barrels daily by 2030.

Shandong Port Group has banned U.S.-sanctioned tankers, potentially impacting Chinese refiners' crude imports. This move follows increased U.S. sanctions on entities involved in Iranian oil transport, affecting China's oil supply dynamics.

【Global Oil Supply and Demand】

OPEC and Russia's oil production declined in December, contributing to a bullish market sentiment. The U.S. showed strong economic indicators, supporting oil demand despite uncertainties about the rally's duration.

Weak oil demand growth and changing trade routes led to a decline in global crude exports in 2024, marking the first drop since the pandemic slump. Sanctions on Russia and Iran, along with shifts in demand, altered global oil flows.

【Others】

The American Petroleum Institute reported a significant drop in U.S. crude oil inventories, exceeding expectations. Meanwhile, gasoline and distillate inventories showed increases, reflecting market dynamics and seasonal changes.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.