Oil Daily | OPEC Production Rises Amid India's Flat Diesel Demand and Volatile Oil Prices

【Global Oil Supply and Demand】

The growth in diesel fuel demand in India is slowing, with October sales flat compared to the previous year. This trend indicates a potential slackening in global oil demand as India, a major crude importer, shows signs of declining demand growth. Analysts, however, predict a rise in gasoline demand due to a growing middle class.

【Oil-Producing Countries Dynamics】

OPEC's oil production increased after Libya resolved a political crisis, with Libyan output recovering fully. Libya and Venezuela, both exempt from OPEC cut agreements, boosted exports, while Iraq and Iran's declines partly offset increases. OPEC has delayed planned production hikes despite demand concerns.

India seeks discussions with oil-producing and consuming nations to stabilize oil prices. The country relies heavily on crude imports and has boosted Russian oil purchases. OPEC's delay in increasing supply adds to market volatility. India's efforts aim to ensure predictability in oil pricing.

【Latest Oil Policies】

The U.S. renewable fuels industry faces uncertainty due to unclear tax credits under the Inflation Reduction Act. This has stalled investments and impacted the development of sustainable aviation fuel. The Clean Fuel Production Credit's value depends on greenhouse gas emissions, and the GREET model's adoption will determine credit allocation.

Canada plans to cap emissions from polluting sectors, including oil and gas, by 2032. The proposal aims to reduce emissions by 35% compared to 2019 levels. The move faces opposition from industry leaders, citing economic concerns, while the government emphasizes climate commitments.

【Industry News】

Sweden rejected plans for 13 offshore wind farms in the Baltic Sea, citing security risks. The Swedish government prioritized national defense over renewable energy projects, especially given the proximity to Russia. Sweden continues to focus on nuclear power for its energy needs.

【Company News】

French oil giant TotalEnergies predicts peak global oil demand post-2030 due to population growth and slow investments in power grids and electric vehicles. This outlook contrasts with the IEA's forecast of a decline in fossil fuel demand this decade, suggesting a future lower price environment for oil and gas.

Eni SpA sold its Alaskan upstream assets to Hilcorp for $1 billion, aiming to divest non-core assets. The Italian energy major remains active in the Gulf of Mexico and energy transition projects. Eni plans to achieve significant portfolio upgrades and balance sheet improvements by 2025.

【Others】

The U.S. national average gas prices are falling, with a drop expected below $3 per gallon soon. This decline is attributed to seasonal demand and lower oil prices, despite upcoming elections. Analysts note politicians have minimal influence on these market forces.

South Korea might increase U.S. oil and gas imports if Trump wins the presidency, as he's expected to focus on trade deficits. South Korea's trade surplus with the U.S. could lead to more energy purchases from America, mitigating potential tariff impacts and addressing trade imbalances.