Oil Daily | Saudi Oil Exports Rise Amid Weak Demand, Non-OPEC Production Set to Increase

【Global Oil Supply and Demand】

China's oil demand is projected to peak in 2027 at around 16 million barrels per day or 800 million metric tons, according to Sinopec, joining CNPC in forecasting peak demand due to a shift toward electric vehicles and LNG-powered trucks. China remains a major driver of global oil demand.

Global coal demand reached a new record in 2024, growing by 1% to 8.77 billion tons, driven by China and India's consumption. Despite the rise in renewable energy, coal demand will likely plateau through 2027. China's coal power remains strong, accounting for 60% of its electricity generation.

Oil demand growth for next year is expected to be modest, with oil prices averaging $70 per barrel in 2025 due to increased non-OPEC production. OPEC's decision to delay easing production cuts may mitigate a large surplus, but supply is still set to outstrip demand next year according to the IEA.

【Oil-Producing Countries Dynamics】

Saudi Arabia's crude exports rose to a three-month high in October, with exports at 5.92 million bpd. Despite production cuts, oil prices haven't increased significantly due to weaker demand. Non-OPEC production is expected to rise, further affecting OPEC's market share.

【Latest Oil Policies】

The EPA approved California's plan to end new gasoline vehicle sales by 2035, promoting electric and hybrid vehicles for improved public health. California's energy transition includes the Zemu hydrogen train, set to meet FRA standards by 2025, showcasing a move toward zero-emission technology.

【Industry News】

Barclays downgraded the energy services sector to Neutral amid a bearish oil environment and lack of investor interest. While some companies like Oceaneering International received an upgrade, others such as Valaris faced downgrades due to contract challenges. Recommendations favor firms with limited upstream exposure.

【Company News】

Japanese refiner Eneos plans an IPO for its JX Advanced Metals Corp, expecting up to $4.5 billion in proceeds. The IPO comes amid Japan's active market and Eneos' diversification into transition technologies, including solar and green hydrogen investments.

Nigeria's oil minister approved Shell's sale of $2.4 billion in Nigerian assets to Renaissance Group, enabling Shell's exit from the challenging region. Shell also announced a major investment decision on the Bonga North deepwater project, aiming for peak production by decade's end.

【Others】

Robust coal production in China is leading to an oversupply, reducing coal prices significantly. The International Energy Agency reported record coal demand this year, driven by electricity generation, with China and India as major consumers despite renewable energy growth.