Oil Daily | China's Oil Stockpiling and U.S. Production Raise Oversupply Concerns; Iran Finds Gas Reserves

【Global Oil Supply and Demand】

China is expanding its oil storage capacity as it continues to stockpile crude at discounted rates from Russia and Iran. With 11 new storage sites being constructed, China's inventory buying has been at a high rate, though it is expected to reduce next year. Analysts predict a potential oil market oversupply due to robust U.S. production and OPEC boosts.

Iran announced a significant natural gas discovery at the Pazan field, adding an estimated 10 trillion cubic feet to its reserves. Development is planned to begin soon, contributing to Iran's energy resources. Iran's existing gas production, particularly from the South Pars field, sees continued growth amidst sanctions challenges.

【Oil-Producing Countries Dynamics】

Kazakhstan plans to increase its crude oil exports to Germany in 2026 under an extended supply deal with Rosneft Deutschland. The country has been expanding production, with significant contributions from the Tengizchevroil expansion project.

Nigeria faced a national strike prompted by layoffs at the Dangote refinery, resulting in significant production losses. Despite the setback, Nigeria's oil production was on a recovery path with rising investments and output.

The Kirishi refinery in Russia suffered a shutdown of its CDU-6 unit due to a Ukrainian drone strike, affecting daily refined product volumes. The shutdown is expected to impact European fuel markets and Russia's ability to stabilize oil prices at an upcoming OPEC meeting.

India continues to rely on discounted Russian crude, despite U.S. pressure to reduce imports. Indian refiners have been diversifying their crude sources amid ongoing trade talks, while Russian oil remains a central part of India's crude slate.

【Latest Oil Policies】

Saudi Arabia maintained its official selling price of crude oil for Asia in November, reflecting a cautious approach amid potential market oversupply and ongoing discussions about future term supplies with customers.

【Industry News】

Javier Blas warns of a potential oil glut with higher financing costs complicating storage and trade. Standard Chartered and FGE highlight disciplined OPEC policies and U.S. growth stabilizers, while Goldman Sachs predicts oversupply by 2026. OPEC's recent modest output hike suggests a balanced approach to market conditions.

【Company News】

Ørsted completed a significant rights issue raising $9.35 billion, with the Danish state subscribing for half. The funds will support the Sunrise Wind project in the U.S., reflecting Ørsted's challenges amid changing political landscapes and industry pressures.

Chart Industries' shareholders approved a $13.6 billion sale to Baker Hughes, marking a major energy-technology transaction. The acquisition aligns with Baker Hughes' strategy to expand in LNG and industrial gases, enhancing its position in global supply chains.

【Others】

Power prices in Germany and France surged due to expectations of colder weather and reduced renewable energy output. The European gas storage levels are high, but an early cold snap could necessitate earlier withdrawals, reminiscent of last year's energy crisis.