Oil Daily | Tightening Global Oil Supply Amid Rising US Stockpiles and Ongoing Russian Compliance

【Global Oil Supply and Demand】

Global supplies are tightening despite potential peace deals for Ukraine, which could lower the floor for oil prices. OECD inventories are at their lowest since 2022, providing a price floor despite potential rises in international supplies if U.S. sanctions on Russia lift.

Oil prices fell due to rising U.S. crude stockpiles and Fed's stance on interest rates, affecting demand. The U.S. CPI rose 0.5% in January, maintaining the Federal Reserve's cautious stance on interest rate cuts, impacting oil demand and economic activity.

【Oil-Producing Countries Dynamics】

Russia is fully complying with its OPEC quota for January and February, according to Deputy Prime Minister Alexander Novak. Despite overproduction in prior years, Russia aims to compensate for this by adhering to its current output targets, with plans to adjust for overproduction in the coming months.

Indian refiners are adjusting their supply chains to continue importing Russian oil without violating U.S. sanctions. India's imports depend on non-sanctioned vessels and entities. Despite challenges, the country aims to maintain imports below the $60 per barrel price cap, working to resolve import-related issues.

【Latest Oil Policies】

The U.S. sanctions on Russian oil exports have tripled, affecting around 900,000 bpd. The Biden administration's sanctions target Russian crude oil tankers to curb Russia's influence, with expectations of displacement adjustments over the next six months.

【Industry News】

ONGC plans to invest $11.5 billion in clean energy by 2030, aiming for a 10 GW renewable energy portfolio. With investments spanning various renewable sources, ONGC is transitioning towards greener energy solutions, supported by partnerships and internal cash flows.

Exxon Mobil is seeking permits for its eighth project in Guyana and exploring new wells. The project aims to reduce electricity costs in Guyana by generating gas not linked to oil production, enhancing Exxon's exploration and production capacity in the region.

【Company News】

Chevron plans to cut 15-20% of its workforce to reduce costs post-Hess Corp. acquisition. The company aims for a simplified business model and improved competitiveness, addressing weaker refining margins and financial performance challenges.

Aker BP and TotalEnergies have requested a review to potentially increase their stakes in the Johan Sverdrup field. The redetermination process is based on production and reservoir data, with expected positive changes for the partners involved.

Novatek's 2024 revenues and earnings rose due to increased production. Despite challenges from Western sanctions on its Arctic LNG 2 project, Novatek has continued operations, though net debt has surged, impacting its financial activities.

【Others】

President Trump's efforts towards a Ukraine peace deal could affect sanctions on Russia, potentially increasing Russian crude supply and impacting oil prices. However, improved geopolitical stability might alleviate market fears, influencing the oil market dynamics.