Oil Daily | Saudi Aramco Cuts Prices Amid Weak Asian Demand; Norway Becomes Top Gas Supplier to Europe

【Global Oil Supply and Demand】

Saudi Aramco has cut prices for its Arab Light crude oil for Asia, Europe, and the United States, citing weak Asian demand and reduced manufacturing activity in China. Despite a rebound in China’s crude oil imports in August, OPEC has delayed its production quota rollbacks due to weak demand. Bank of America and Citigroup have adjusted their price forecasts accordingly.

Russian natural gas pipeline exports to Europe declined by 2% in August year-on-year and month-on-month, with Gazprom's shipments falling. Norway has now become Europe's top gas supplier, replacing Russia, which previously supplied around one-third of Europe's gas. The shift underscores Europe's ongoing efforts to reduce dependency on Russian gas.

【Oil-Producing Countries Dynamics】

Norway's annual license round for new exploration acreage has attracted bids from 21 companies, including major players like Equinor and Shell. The expanded areas in the Barents Sea and Norwegian Sea have seen considerable interest. The awards will be announced in early 2025, crucial for slowing the decline in Norway's oil and gas production and contributing to Europe's energy security.

【Latest Oil Policies】

The European Union may continue to receive natural gas that includes Russian gas mixed in, despite efforts to distance from Russian energy supplies. Czech energy minister Jozef Sikela warned that contracts with some Eastern European states are expiring, but alternate suppliers like Azerbaijan could complicate proving the gas's origin.

Texas regulators have denied state funding for a proposed 1.3-gigawatt natural gas power plant due to a failed due diligence process. The Public Utility Commission of Texas (PUCT) rejected NextEra and Aegle Power's application but is reviewing other applications for nearly 10 GW of new natural gas-fired capacity to boost ERCOT. The Texas Energy Fund, established to finance electric facilities, is overseeing these loans.

【Others】

Germany's climate envoy emphasized China's crucial role in meeting global climate targets. China's decisions in its Nationally Determined Contributions (NDC) are vital to achieving the 1.5-degree target. Despite being a global leader in renewable energy, China remains the largest greenhouse gas emitter and continues to approve coal-fired power plants to meet growing energy demands.