Oil Daily | OPEC Extends Cuts Amid Global Demand Concerns; Russian Exports Surge; ADNOC Launches XRG
Thursday, Nov 28, 2024 7:00 am ET
2min read 【Global Oil Supply and Demand】
Asia's crude oil imports are projected to decline in 2024 despite higher arrivals in November, driven by increased Chinese imports. However, overall Asian crude imports from January to November averaged 26.52 million bpd, which is a decrease compared to the previous year. OPEC has consecutively reduced its forecasts for global and Chinese oil demand growth due to weaker demand.
The ongoing OPEC oil production cuts are supported by improved compliance with quotas, providing modest upside to Brent Crude prices. Goldman Sachs expects these cuts to extend gradually into 2025. Saudi Arabia is likely to continue production cuts due to recent price drops, with possible easing beginning in April 2025.
Crude oil prices are facing resistance due to demand concerns, despite OPEC's plans to gradually increase supply. Analysts suggest that any premature production hike could result in market oversupply. OPEC is likely to delay its planned output increase, with non-OPEC member Azerbaijan signaling continued commitment to cuts.
Russia's refined petroleum product exports surged in November following the end of refinery maintenance, hitting an eight-month high. Shipments averaged 2.3 million bpd, an 18% increase from October. Meanwhile, Russia's seaborne crude exports fell, reflecting a decline in shipments from Western ports.
【Oil-Producing Countries Dynamics】
The OPEC group moved its meeting on oil production plans to December 5 due to scheduling conflicts. Discussions will focus on extending production cuts into 2025, with Azerbaijan indicating continued commitment. Weak market fundamentals may lead to further delays in output increases.
The military regime in Mali has detained four employees of Canadian mining company Barrick Gold amid tax disputes. Political instability in Africa poses challenges to foreign energy and mining firms. Recent divestments from Nigeria by major oil companies highlight the region's complexities and risks.
【Latest Oil Policies】
The EU's General Court dismissed Nord Stream 2's challenge to EU unbundling rules, a symbolic defeat for the gas pipeline never put into operation. The ruling underscores the EU's stance on extending internal gas market rules to pipelines from third countries, like Nord Stream 2.
【Industry News】
Abu Dhabi's ADNOC is launching XRG, a new investment firm valued over $80 billion, focusing on lower-carbon energy, chemicals, and natural gas. The firm aims to be a global leader in chemicals and invest in low-carbon solutions, marking a strategic shift in response to energy transition demands.
【Company News】
The FBI is investigating Exxon's consultant over alleged involvement in hacking emails of environmentalists critical of the company. Despite past activist challenges, Exxon Mobil won shareholder support for its energy transition strategy. The backlash against Big Oil has diminished as energy security concerns rise.
A court adviser proposed restarting the auction of Venezuela's PDV Holding after the winning bid failed to gain creditor support. The sale process, overseen by a Delaware court, seeks to resolve $24 billion in claims. The new bidding process will commence on December 18, offering creditors direct payments.
【Others】
China's industrial firms reported a 10% Y/Y profit decline in October, with oil and steel industries incurring substantial losses. Weak Chinese oil demand continues to influence bearish market sentiment. Meanwhile, copper and coal imports showed mixed trends, reflecting fluctuations in global commodity prices.
Asia's crude oil imports are projected to decline in 2024 despite higher arrivals in November, driven by increased Chinese imports. However, overall Asian crude imports from January to November averaged 26.52 million bpd, which is a decrease compared to the previous year. OPEC has consecutively reduced its forecasts for global and Chinese oil demand growth due to weaker demand.
The ongoing OPEC oil production cuts are supported by improved compliance with quotas, providing modest upside to Brent Crude prices. Goldman Sachs expects these cuts to extend gradually into 2025. Saudi Arabia is likely to continue production cuts due to recent price drops, with possible easing beginning in April 2025.
Crude oil prices are facing resistance due to demand concerns, despite OPEC's plans to gradually increase supply. Analysts suggest that any premature production hike could result in market oversupply. OPEC is likely to delay its planned output increase, with non-OPEC member Azerbaijan signaling continued commitment to cuts.
Russia's refined petroleum product exports surged in November following the end of refinery maintenance, hitting an eight-month high. Shipments averaged 2.3 million bpd, an 18% increase from October. Meanwhile, Russia's seaborne crude exports fell, reflecting a decline in shipments from Western ports.
【Oil-Producing Countries Dynamics】
The OPEC group moved its meeting on oil production plans to December 5 due to scheduling conflicts. Discussions will focus on extending production cuts into 2025, with Azerbaijan indicating continued commitment. Weak market fundamentals may lead to further delays in output increases.
The military regime in Mali has detained four employees of Canadian mining company Barrick Gold amid tax disputes. Political instability in Africa poses challenges to foreign energy and mining firms. Recent divestments from Nigeria by major oil companies highlight the region's complexities and risks.
【Latest Oil Policies】
The EU's General Court dismissed Nord Stream 2's challenge to EU unbundling rules, a symbolic defeat for the gas pipeline never put into operation. The ruling underscores the EU's stance on extending internal gas market rules to pipelines from third countries, like Nord Stream 2.
【Industry News】
Abu Dhabi's ADNOC is launching XRG, a new investment firm valued over $80 billion, focusing on lower-carbon energy, chemicals, and natural gas. The firm aims to be a global leader in chemicals and invest in low-carbon solutions, marking a strategic shift in response to energy transition demands.
【Company News】
The FBI is investigating Exxon's consultant over alleged involvement in hacking emails of environmentalists critical of the company. Despite past activist challenges, Exxon Mobil won shareholder support for its energy transition strategy. The backlash against Big Oil has diminished as energy security concerns rise.
A court adviser proposed restarting the auction of Venezuela's PDV Holding after the winning bid failed to gain creditor support. The sale process, overseen by a Delaware court, seeks to resolve $24 billion in claims. The new bidding process will commence on December 18, offering creditors direct payments.
【Others】
China's industrial firms reported a 10% Y/Y profit decline in October, with oil and steel industries incurring substantial losses. Weak Chinese oil demand continues to influence bearish market sentiment. Meanwhile, copper and coal imports showed mixed trends, reflecting fluctuations in global commodity prices.
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