Oil Daily | U.S. Crude Inventories Drop, Libyan Oilfields Halt, Norway's Gas Exports Surge
AInvestWednesday, Aug 28, 2024 8:00 am ET
3min read
DE --
EL --
JVSA --
【Global Oil Supply and Demand】

U.S. power generation and electricity demand have risen this year to the highest in at least three years but the 2024 demand likely peaked in July amid peak air conditioning and cooling consumption, Reuters columnist Gavin Maguire reports, citing data from LSEG. U.S. power generation in the Lower 48 states rose by 3.4% between January 1 and August 26 compared to the same period of 2023, according to the LSEG data.

Last month, the International Energy Agency (IEA) said that economic growth, higher demand for cooling amid heat waves, the rapid rise of data centers, and continued electrification are set to push the growth in global electricity demand to one of the highest paces in the past 20 years in 2024 and 2025. Regionally, electricity demand in the United States is set to rebound significantly in 2024, rising by 3% year-on-year, thanks to an improved economic outlook, rising demand for air conditioning, and the surge in data center expansions.

The various decarbonization pathways and scenarios are likely underestimating the rate at which global energy consumption is rising, which could create a supply shortfall of natural gas by the end of the decade, Switzerland-based industry organization International Gas Union (IGU) said in its Global Gas Report 2024 on Tuesday. If global natural gas demand continues to grow as it did in the last 4 years, without additional production development, a 22% global supply shortfall is expected by 2030, IGU said in the annual report.

Crude oil inventories in the United States fell by 3.4 million barrels for the week ending August 23, according to The American Petroleum Institute (API). So far this year, crude oil inventories are more than 2 million barrels under where they were at the start of the year, having decreased by 2.642 million barrels, according to API data.

Norway's gas exports are soaring so far this year. So much so, they are on track to challenge historical records, with pipeline deliveries to Europe up 10% year-on-year. This year’s surge follows the 2023 lull, and positions Norway as Europe's leading gas supplier after Russia's exports dwindled post-Ukraine invasion. Gassco, Norway's system operator, reported that 70.2 billion cubic meters (bcm) of gas were delivered by the end of July.

【Oil-Producing Countries Dynamics】

Oil production at several Libyan oilfields was halted on Tuesday after the rival government in the east announced on Monday a stop to all oil production and exports from OPEC’s African producer. Crude oil output at the El Feel oilfield in southwestern Libya has stopped, engineers told Reuters on Tuesday. Engineers at several other oilfields in the east and southeast have also halted or reduced production.

Venezuela's contested president Nicolás Maduro will make big changes to the top leadership at the state-owned oil giant, Petróleos de Venezuela S.A. (PDVSA), and the oil ministry, sources familiar with the situation told Reuters on Tuesday. The move follows the controversial presidential election that has threatened the country's political stability.

【Latest Oil Policies】

The U.S. Commodity Futures Trading Commission (CFTC) has fined a trading unit of French supermajor TotalEnergies for attempted manipulation of the gasoline futures market in 2018. The U.S. market regulator ordered TOTSA TotalEnergies Trading SA, formerly known as TOTSA Total Oil Trading SA (TOTSA), to pay a $48 million civil monetary penalty and cease and desist from violating the Commodity Exchange Act (CEA) and CFTC regulations.

【Industry News】

The operator of the biggest U.S. power grid has issued hot weather and maximum generation alerts for the areas in the Midwest and East it serves as a heat wave that has settled on large parts of the Midwest and parts of the South. PJM Interconnection, which coordinates the movement of wholesale electricity and ensures power supplies for 65 million people, has issued a Maximum Generation Alert and Load Management Alert for August 27.

A Greek tanker that the Yemeni Houthis struck with a missile in the Red Sea a week ago is leaking oil, the U.S. Pentagon said. Salvaging the vessel has proved challenging as the Houthis threaten more attacks, the BBC noted in a report quoting the Pentagon. The MV Sounion now sits immobilized in the Red Sea, where it is currently on fire and appears to be leaking oil.

【Company News】

Exxon is looking to sell some conventional oil and gas assets in the Permian, Bloomberg has reported, with the proceeds from the potential sale seen at around $1 billion. Exxon said it was “exploring market interest for select conventional assets in West Texas and South East New Mexico,” adding that “This decision is consistent with our strategy to continually evaluate our portfolio.”

China National Petroleum Corporation (CNPC) and its listed company PetroChina are looking to buy oil and gas exploration and production assets and LNG opportunities globally in what could be a revival of deal-making for the Chinese state giant after two decades. CNPC could seek to expand its current investments in LNG in Qatar, one of the world’s biggest LNG exporters.

Others】

Some of the biggest U.S. utilities have bumped up their forecasts for short and long-term demand growth and peak demand and are planning higher spending to meet rising consumption. The expected surge in power demand due to data centers working with AI is putting pressure on utilities to invest more in updating the infrastructure and meeting higher peak demand levels than what companies and regulators were forecasting just two years ago.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.