Embedded Files
#FuelingTheFuture
#FuelingTheFuture
Aim:
Aim:
To become the go-to resource for professionals and enthusiasts in the petroleum industry, offering in-depth analysis, market trends, and educational content to help them stay informed and make better decisions.
Mission Statement:
Mission Statement:
At PETROZA ENERGY, our mission is to deliver accurate, insightful, and timely information about the petroleum industry. We strive to empower our readers with the knowledge they need to navigate the complexities of the market, stay ahead of industry trends, and make informed decisions. Our commitment to integrity, transparency, and excellence ensures that we provide the highest quality content, fostering a community of well-informed professionals and enthusiasts.
Future Prospects and Growth for LNG in China and Globally
Continued Demand Growth: China's demand for LNG is set to soar, driven by policies promoting cleaner energy and the transition from coal to gas. The country's LNG imports are projected to rise significantly, solidifying its position as the world's largest LNG importer.
Infrastructure Expansion: China is making substantial investments in LNG infrastructure, including new import terminals and storage facilities, to meet the growing demand. This expansion is crucial for supporting the nation's energy needs.
Decarbonization Efforts: The push for decarbonization and reducing air pollution will further boost LNG consumption as a cleaner alternative to coal. This aligns with global efforts to transition to more sustainable energy sources.
Global Market Insights
Global Market Insights
Supply and Demand Dynamics: The global LNG market is expected to experience an oversupply due to new export capacities, particularly from the United States and Qatar. This could lead to lower prices and increased competition among suppliers.
Regional Demand Shifts: While traditional markets like Japan and South Korea may see stagnant or declining demand, emerging markets in South and Southeast Asia are poised to drive global LNG demand growth. These regions are becoming key players in the LNG market.
Energy Transition: The global shift towards cleaner energy sources will continue to support LNG demand, especially in regions seeking to reduce their reliance on coal and oil. LNG's role in this transition is critical for achieving environmental goals.
Economic and Political Factors: Economic growth, energy policies, and geopolitical factors will significantly influence the future of the LNG market. For instance, Europe's LNG demand is shaped by its energy security strategies and climate policies.
Argument for Buyers
Argument for Buyers
To make informed and positive decisions, buyers should consider the following trends:
Leverage Infrastructure Investments: Take advantage of the expanding infrastructure to ensure a reliable supply of LNG.
Monitor Market Dynamics: Stay informed about global supply and demand shifts to capitalize on favorable pricing.
Embrace Decarbonization: Align with global decarbonization efforts by incorporating LNG into energy portfolios.
Adapt to Regional Shifts: Focus on emerging markets in South and Southeast Asia for new opportunities.
Stay Ahead of Economic and Political Changes: Keep an eye on economic growth and geopolitical developments to navigate the market effectively.
By adhering to these trends, buyers can secure a stable, cost-effective, and sustainable energy supply, positioning themselves for future success.
Sources:
Sources:
(1) [IEEFA Global LNG Outlook 2024-2028] - (https://ieefa.org/resources/global-lng-outlook-2024-2028)
(2) [McKinsey Global Gas Outlook to 2050] - https://www.mckinsey.com/~/media/mckinsey/industries/oil%20and%20gas/our%20insights/global%20gas%20outlook%20to%205050/global%20gas%20outlook%202050_final.pdf
(3) [Bloomberg Global LNG Outlook 2021-25 - https://www.bloomberg.com/professional/insights/commodities/global-lng-outlook-2021-25-overview/
(4) Global LNG Outlook 2024-2028 - https://ieefa.org/sites/default/files/2024-04/Global%20LNG%20Outlook%202024-2028_April%202024%20%28Final%29.pdf
(5) 2022 Outlook: Global liquefied natural gas | Insights | Bloomberg .... https://www.bloomberg.com/professional/insights/commodities/2022-outlook-global-liquefied-natural-gas/.
The current market trends for LNG and other petroleum products in China are quite dynamic
Rising Demand: China's LNG demand is set to increase by over 50% by 2040, driven by coal-to-gas switching policies and robust infrastructure development.
Import Growth: China has overtaken Japan to become the world's largest LNG importer, with projections showing demand reaching 100 million tons soon.
Decarbonization Efforts: The push for cleaner energy sources and industrial decarbonization significantly boosts LNG demand.
Naphtha, Diesel, and LPG
Naphtha: The demand for naphtha is surging alongside China's expanding petrochemical industry, driven by increased plastics and chemical production.
Diesel: Despite the push for cleaner energy, diesel remains vital for heavy machinery and transportation, influenced by the industrial and transportation sectors.
LPG: The LPG market is growing, especially for residential use and as a petrochemical feedstock, fueled by urbanization and the need for cleaner cooking fuels.
General Trends
Energy Transition: China's active transition towards cleaner energy impacts the demand for various petroleum products.
Economic Growth: Continuous economic growth drives energy consumption, including LNG and other petroleum products.
Global Market Influence: China's energy policies and market demands play a crucial role in shaping global energy markets, positioning it as a key player in international petroleum trade.
LPG
Continued Demand Growth: The demand for LPG is expected to rise, driven by urbanization and the need for cleaner cooking fuels. The petrochemical industry's expansion also supports this growth.
Infrastructure Expansion: Investments in LPG infrastructure, including storage and distribution networks, are crucial to meet the increasing demand.
Decarbonization Efforts: LPG is seen as a cleaner alternative to traditional cooking fuels, aligning with global decarbonization goals.
Diesel
Continued Demand Growth: Diesel remains essential for heavy machinery and transportation, despite the push for cleaner energy. Its demand is influenced by industrial and transportation sectors.
Infrastructure Expansion: Investments in diesel infrastructure, such as refineries and distribution networks, are necessary to support its continued use.
Decarbonization Efforts: While diesel is a significant contributor to emissions, advancements in cleaner diesel technologies are being explored to reduce its environmental impact.
Jet Fuel
Continued Demand Growth: The aviation industry's recovery post-pandemic is driving the demand for jet fuel. Economic growth and increased travel contribute to this trend.
Infrastructure Expansion: Investments in airport infrastructure and fuel supply chains are essential to support the growing demand for jet fuel.
Decarbonization Efforts: The aviation industry is exploring sustainable aviation fuels (SAFs) to reduce its carbon footprint and meet global climate goals.
Global Market Insights
Global Market Insights
Supply and Demand Dynamics: The global markets for LPG, diesel, and jet fuel are influenced by supply and demand dynamics. Oversupply can lead to lower prices, while demand spikes can drive prices up.
Regional Demand Shifts: Emerging markets in South and Southeast Asia are expected to drive growth in LPG and diesel demand. Traditional markets may see slower growth or stabilization.
Energy Transition: The global shift towards cleaner energy sources impacts the demand for these fuels. Policies promoting cleaner alternatives and reducing reliance on fossil fuels are shaping market trends.
Economic and Political Factors: Economic growth, energy policies, and geopolitical factors play significant roles in shaping the future of these markets. Conflicts and political tensions can disrupt supply chains and impact prices.
Argument for Buyers
Argument for Buyers
To make informed and positive decisions, buyers should consider the following trends:
Leverage Infrastructure Investments: Take advantage of expanding infrastructure to ensure a reliable supply of LPG, diesel, and jet fuel.
Monitor Market Dynamics: Stay informed about global supply and demand shifts to capitalize on favorable pricing.
Embrace Decarbonization: Align with global decarbonization efforts by incorporating cleaner alternatives and sustainable practices.
Adapt to Regional Shifts: Focus on emerging markets for new opportunities and growth potential.
Stay Ahead of Economic and Political Changes: Keep an eye on economic growth and geopolitical developments to navigate the market effectively.
By adhering to these trends, buyers can secure a stable, cost-effective, and sustainable energy supply, positioning themselves for future success.
Sources:
(1) Top U.S. LNG Exports: China's Gas Demand Is Booming. https://oilprice.com/Energy/Natural-Gas/Top-US-LNG-Exports-Chinas-Gas-Demand-Is-Booming.html.
(2) Global LNG Outlook 2024-2028 - IEEFA. https://ieefa.org/sites/default/files/2024-04/Global%20LNG%20Outlook%202024-2028_April%202024%20%28Final%29.pdf.
(3) Snapshot of gas and LNG flows and market dynamics: Q3 2021. https://www.mckinsey.com/industries/oil-and-gas/our-insights/oil-and-gas-blog/snapshot-of-gas-and-lng-flows-and-market-dynamics.
(4) Global Natural Gas Market and Changing Trends of Natural Gas Trade. https://link.springer.com/chapter/10.1007/978-981-99-7289-0_9.
(5) 2022 Outlook: Global liquefied natural gas | Insights | Bloomberg .... https://www.bloomberg.com/professional/insights/commodities/2022-outlook-global-liquefied-natural-gas/.
Achieving the 2030 and 2050 climate goals
The transition to cleaner fuels is expected to continue growing, driven by technological advancements, policy support, and increasing investment. The International Energy Agency (IEA) projects that clean energy will account for a larger share of the global energy mix, with significant investments in renewable energy and electric vehicles. This shift is crucial for reducing carbon emissions and mitigating climate change.
Impact on Major Economies
Impact on Major Economies
United States: The U.S. has made substantial progress in clean energy, with policies like the Inflation Reduction Act and the Bipartisan Infrastructure Law driving investments in clean energy manufacturing and electric vehicles.
2.European Union: The EU has been a leader in renewable energy adoption, with ambitious targets for reducing carbon emissions and increasing the share of renewable energy in the energy mix. The EU's Green Deal aims to make Europe climate-neutral by 2050.
3.China: China is investing heavily in renewable energy and electric vehicles, aiming to reduce its reliance on coal and improve air quality. However, the transition is challenging due to the country's large industrial base and energy demand.
4.Russia: Russia's energy transition is complicated by its heavy reliance on fossil fuels, particularly natural gas and oil. Geopolitical tensions and economic sanctions have also impacted its energy policies.
Challenges for China and India
Both China and India face significant challenges in transitioning to cleaner fuels. China's industrial base and energy demand make it difficult to shift away from fossil fuels quickly. India, on the other hand, has a large population and a growing energy demand, making the transition even more complex. Both countries are investing in renewable energy, but the pace of change is slower than in more developed economies.
Impact on Third-World Countries
Impact on Third-World Countries
Third-world countries, many of which are heavily dependent on petroleum-based fuels, face even greater challenges in transitioning to cleaner energy. These countries often lack the financial resources, infrastructure, and technological capabilities needed to make the shift. The transition will likely be slow, and these countries may continue to rely on fossil fuels for the foreseeable future.
Remarks
Remarks
The global push for cleaner fuels is a crucial step towards achieving climate goals, but it comes with significant challenges. Major economies like the U.S., EU, China, and Russia are making progress, but the transition is complex and requires sustained investment and policy support. For third-world countries, the transition will be even slower, highlighting the need for international cooperation and support to ensure a sustainable future for all.
Sources:
Sources:
(1) What will the future look like by 2050 if it’s powered by renewables? | World Economic Forum
(2) Sustainable fuels and their role in decarbonizing energy | McKinsey
(3) Clean energy is boosting economic growth – Analysis - IEA
(4) Context and scenario design – World Energy Outlook 2024 – Analysis - IEA
(5) Advancing climate action. Building resilience. | UNOPS
(7) The Future of Oil & Gas: Predictions and Pathways
(8) Short-Term Energy Outlook - U.S. Energy Information Administration (EIA)
Utilizing the Slow Transition to Cleaner Energy
Utilizing the Slow Transition to Cleaner Energy
Recommendations:
Buyers
Diversification: Buyers can take advantage of the slow transition by diversifying their energy sources. Investing in both fossil fuels and renewable energy can provide stability during the transition period.
Long-term Contracts: Securing long-term contracts for fossil fuels can lock in lower prices before the full impact of the transition drives prices up.
Energy Efficiency: Investing in energy-efficient technologies can reduce overall energy consumption, making the transition smoother and more cost-effective.
Sellers
Targeted Markets: Sellers can focus on markets that are still heavily reliant on fossil fuels, such as Africa and other third-world countries.
Flexible Pricing: Offering flexible pricing and financing options can attract buyers in these markets, making fossil fuels more accessible.
Investment in Infrastructure: Investing in infrastructure in these regions can facilitate the extraction, transportation, and sale of fossil fuels, ensuring a steady supply chain.
Feasible Markets
Africa: With its vast natural resources and growing energy demand, Africa remains a lucrative market for fossil fuel. Countries like Nigeria, Angola, and Algeria are key players in the African oil market.
South Asia: Countries like India and Pakistan, which have significant energy needs and are still heavily dependent on fossil fuels, present viable markets.
Southeast Asia: Nations such as Indonesia and Vietnam, with their growing economies and energy demands, are potential markets for fossil fuel sales.
Drivers for Sales to Third-World Countries
Economic Growth: Rapid economic growth in these regions increases energy demand, driving the need for fossil fuels.
Lack of Infrastructure: Limited renewable energy infrastructure in these countries makes fossil fuels a more reliable and immediate energy source.
Affordability: Fossil fuels are often more affordable compared to the initial investment required for renewable energy projects, making them an attractive option for developing nations.
By strategically targeting these markets and leveraging the slow transition to cleaner energy, both buyers and sellers can maximize their profits and ensure a steady supply of energy during this period of change.
#EnergyTsunamiSA
#EnergyTsunamiSA
Be blown away or create your own waves of change
South African Fuel Shortages and Projections for 2030 and Beyond
South African Fuel Shortages and Projections for 2030 and Beyond
South Africa is facing significant challenges with fuel shortages, primarily due to its heavy reliance on imports. The country's natural gas supply is also under threat, with Sasol planning to cease production from Mozambique's gas fields by mid-2027.This could lead to a "gas cliff," impacting various industrial sectors.
Entities Securing Petroleum and Energy for South Africa
Entities Securing Petroleum and Energy for South Africa
The Department of Mineral Resources and Energy (DMRE) is responsible for ensuring the secure and sustainable provision of energy. The newly proposed South African National Petroleum Company (SANPC) aims to become the state's energy champion, managing upstream petroleum rights and activities.
Proactivity and Measures for Energy Security
The DMRE and SANPC are expected to take proactive measures to address energy security. However, if they fail in their mandate, stringent measures should indeed be put in place to ensure compliance and address both short-term and long-term goals.
Refineries in South Africa
South Africa currently has six refineries, but only three are operational. The Engen refinery in Durban is being repurposed as an import facility. The future of oil refining in South Africa is uncertain, with potential closures or repurposing of refineries due to economic and environmental pressures.
Future Forecast for New Refineries
The future forecast for new refineries in South Africa is uncertain.The country's refinery sector is expected to undergo significant changes, with a shift towards cleaner fuels and the electrification of mobility. This could lead to the closure or repurposing of existing refineries.
Comparison with Developing Countries
South Africa's refinery sector is relatively small, and aging compared to those in other developing countries. The shift to cleaner fuels and the push for decarbonization is likely to impact the future of refining in South Africa.
Sources:
Sources:
(1) Petroleum Industry | Energy Future SA | South Africa | DGFUELS
(2) Beyond 2027: Unpacking South Africa’s Gas Infrastructure Challenge
(3) Understanding the looming ‘gas cliff’ in SA, and the solutions
(4) 16 Mineral Resources and Energy.pdf
(5) The State’s energy champion: What the SANPC Bill is and where we are with it - Cliffe Dekker Hofmeyr
Addressing South Africa's Energy Crisis: A Call for Strategic Reforms
Addressing South Africa's Energy Crisis: A Call for Strategic Reforms
South Africa's current energy procurement strategy, managed by the Central Energy Fund (CEF), includes securing petroleum through PetroSA and then reselling it to Eskom. This process is not only redundant but also a significant drain on state coffers. It effectively means that taxpayers are paying for the same commodity twice, leading to severe financial strain on both the state and its citizens.
The current system is clearly flawed and unsustainable. To ensure long-term energy security and economic stability, a new energy constitution must be established. This new framework should centralize all energy procurement and distribution under a single entity, inclusive of Eskom, thereby eliminating the need for intermediaries such as PetroSA.
Furthermore, PetroSA should come online with immediate effect to reduce costs for the public and alleviate the financial burden on Eskom. This move would ensure that energy procurement is managed more efficiently, directly benefiting consumers. Alternatively, Eskom should be granted import permits and allowed to source their diesel directly from refineries. This would enable Eskom to secure petroleum at discounted fixed prices, ensuring competitive pricing and aligning with energy companies that advocate good governance and sound business practices rather than profit maximization at the expense of the public.
Additionally, the current import strategy of the government should be revisited and strategically aligned to expedite these changes with great haste. It is critical that policies and frameworks are put in place to support this shift, ensuring a streamlined and efficient import process that benefits the country and its citizens.
Recommendations
Recommendations
Key Recommendations:
Key Recommendations:
Centralize Energy Security: Establish a single entity responsible for all aspects of energy security, including procurement, distribution, and regulation. This will eliminate the need for intermediary entities and reduce unnecessary costs.
Enhance Accountability: Implement stringent oversight mechanisms to ensure transparency and accountability in energy procurement and distribution. This will prevent misuse of funds and ensure that resources are allocated effectively.
Promote Sustainable Practices: Encourage investment in renewable energy sources and promote sustainable energy practices to reduce reliance on fossil fuels and enhance long-term energy security.
Ensure Competitive Pricing: By eliminating middlemen, the new framework will enable more competitive pricing, making energy more affordable for consumers and reducing the financial burden on the state.
Question Existing Practices: Address the pressing question of whether Eskom should continue to be supplied with diesel or transition to new alternative fuels to reduce their enormous costs. Since the state is supplying the fuel via PetroSA, exploring alternative, more sustainable fuel options could reduce electricity costs for the public.
Empower Eskom: Grant Eskom import permits and allow them to source diesel directly from refineries. This approach can secure petroleum at discounted fixed prices, ensuring competitive pricing and promoting good governance and business acumen.
Strategic Policy Alignment: The current import strategy of the government should be strategically aligned to facilitate this transition. Policies and frameworks must be updated to support a streamlined and efficient import process that benefits the country and its citizens.
Mitigate Price Manipulation: Implement strict regulatory measures to prevent unscrupulous energy traders and companies from manipulating fuel prices. Establishing transparent pricing mechanisms and monitoring systems can protect consumers and the state's finances.
Leverage International Examples: Look at countries like Germany and Denmark, which have successfully integrated renewable energy sources into their grids, reducing their reliance on fossil fuels and fostering economic growth. Uruguay's significant investments in wind and solar energy have also proven effective in increasing energy access and driving economic development.
Optimize Import Strategies: In light of refinery shortages, South Africa should strategically utilize fuel imports to save costs. Implementing direct procurement agreements with reputable refineries globally and securing bulk purchasing at fixed rates can protect against price manipulation and provide a more stable supply.
This call for reform is not just about addressing the immediate inefficiencies but also about laying the foundation for a sustainable and resilient energy future. It is essential for the government to take proactive steps to reform the current system, ensuring that South Africa can meet its energy demands without compromising its financial stability.
Sources:
Sources:
(1) Energy-Sector-Transformation-in-SA-low-res.pdf
(2) Two years into South Africa’s Just Energy Transition Partnership: How real is the deal? – ECDPM
(3) Update_on_energy_action_plan_AUG23.pdf
(4) Just transition to a low-carbon economy | SONA 2024
(5) South Africa: A Just Transition to Sustainable Energy | United Nations DCO r
(6) 7 Critical Concerns in Africa’s Energy Sector and Pathways to Overcome Them | Energy Central
Russian LNG on the rise in EU – report
Russia's share of EU liquefied natural gas (LNG) imports has increased to 20%, according to a report from Brussels' energy watchdog. In 2023, Russian tanker imports accounted for 14%, while the US remains the largest supplier with 45%. Total EU LNG imports have declined, making up 18% of the global market, down from 24% last year. The EU aims to reduce its reliance on Russian energy supplies, especially since the Ukraine conflict began. Meanwhile, Qatar has rerouted gas shipments to Asia due to security concerns, affecting its presence in the EU market. The shift to US fuel has impacted the competitiveness of Western Europe, prompting concerns from German industry leaders about investment challenges.
India and UAE ink deals for LNG and oil exploration
India signed five energy agreements with the UAE during Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan's visit to New Delhi. Notable pacts include a 15-year liquefied petroleum gas (LPG) supply deal between ADNOC and Indian Oil Corporation, supplying 1 million metric tonnes annually from Ruwais. This is India's third such agreement with the UAE. Additionally, a production concession agreement was established for Abu Dhabi Onshore Block 1, involving exploration rights awarded to Bharat Petroleum and IOCL. A framework agreement was also signed for India's support in operating the UAE's Barakah nuclear power plant. The UAE is a significant trade partner for India, with ongoing discussions about their Comprehensive Economic Partnership Agreement.
India ramps up Russian oil imports
India's oil imports from Russia rose 6.4% in September to 1.88 million barrels per day, accounting for 40.2% of its total imports, driven by increased demand ahead of Diwali. Analysts noted that Indian refiners are pursuing long-term contracts with Russia to stabilize prices and secure energy supplies, as spot market volatility increases. Despite reduced discounts on Russian fuel, India's refiners remain interested due to high import volumes leading to significant savings. Russia has become India's top oil supplier since the Ukraine conflict began, with ongoing discussions for long-term agreements expected to finalize by next April.
Oil prices fall to lowest mark since 2021
Crude prices fell sharply on Tuesday after OPEC lowered its demand growth forecast for this year and next, marking its second consecutive downgrade. Benchmark Brent dropped 3.7% to $69.08 a barrel, its first drop below $70 since December 2021. West Texas Intermediate (WTI) fell over 4% to $65.72, its lowest since May 2023. OPEC projected a 2024 demand increase of 2 million barrels per day, 80,000 bpd less than previously estimated, primarily due to lower growth forecasts from China. OPEC also revised its 2025 demand growth estimate down to 1.74 million bpd. In response to weak demand and geopolitical tensions, OPEC+ has implemented significant output cuts and postponed plans to unwind these cuts amidst slumping oil prices
Too Many Ships, Too Little Demand: LNG Freight Rates Plunge to Multi-Year Lows
Reuters
SINGAPORE, Oct 28 (Reuters) – Liquefied natural gas shipping rates have hit multi-year lows and may extend losses going into 2025, analysts and shipping sources said, with new tankers being added at a faster rate than LNG production is rising and spot demand still tepid.
New LNG tankers, built in anticipation of rising U.S. exports after a plunge in Russian gas supplies to Europe in 2022, are coming online earlier than liquefaction projects, which have been delayed amid inflation from strong wage growth and a shortage of skilled labour and equipment.
With more ships expected to come, freight rates for LNG tankers may remain depressed until late 2025 when new production starts up, said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
China makes its move in Africa.
Should the West be worried? During the recent Forum on China-Africa Cooperation (FOCAC) summit in Beijing, China reaffirmed its commitment to Africa by pledging $50 billion over the next three years. This comes as China faces challenges in maintaining a favorable relationship with the West while becoming increasingly involved in Africa's political and military landscape. Despite its economic aid, China's approach remains conservative, focusing on addressing debt issues and restructuring in African nations. While the summit's promises echo commitments from the US and EU, much of the financial aid may consist of loans rather than genuine assistance. China's long-term strategy may include relocating production facilities to Africa and attracting African workers as its demographic shifts.
Bangladesh may reconsider energy deals with India – FT
Bangladesh's interim government, led by Nobel laureate Muhammad Yunus, is facing a potential crisis due to an outstanding $500 million energy bill owed to India's Adani Group. This debt is part of total power liabilities amounting to $3.7 billion, exacerbated by costly energy deals from the previous government of Sheikh Hasina, who resigned amid protests. The government plans to review these deals and has requested financial assistance from lenders like the World Bank. Adani Group has affirmed its commitment to supplying power, despite rising receivables. Bangladesh, despite having adequate generating capacity, is experiencing severe power shortages due to high import costs for oil and coal. The Rooppur Nuclear Power Plant, financed by Russia, is expected to alleviate some of this pressure next year.
EU reports ‘impressive’ gas supplies from Russia
The EU still imports 18% of its gas from Russia, down from 45% three years ago, according to a European Commission report. Energy Commissioner Kadri Simson confirmed that EU member states are prepared for a potential end to Russian gas transit via Ukraine after 2024. The current agreement allows Gazprom to transit 65 billion cubic meters in 2020 and 40 billion annually until the end of 2024. While some EU countries have voluntarily stopped imports, nations like Austria, Slovakia, the Czech Republic, and Italy continue to buy Russian gas. Simson emphasized the need to adhere to sanctions against Russia to support Ukraine.
Russia increasing wheat exports to Africa
Krasnodar Region exported 14.8 million tons of wheat to 25 African countries from January to September 2024, a 14.4% increase, according to the Center of Grain Quality Assurance. Egypt was the top importer, with 6.8 million tons. Recent shipments included 17.2 thousand tons to the Democratic Republic of the Congo and 31.5 thousand tons to Eritrea. The wheat is rigorously tested for quality and safety before export. Russian officials expect grain exports to exceed $55 billion by 2030 and focus on key markets in North Africa. In February, Russia also provided 200,000 tons of wheat to six low-income African nations free of charge.
Gold price soars to all-time high
Gold hit an all-time high on Friday, surpassing $2,600 per ounce, amid expectations of a US Federal Reserve interest rate cut. Spot gold prices rose 1.13% to $2,609.8, marking a 4% increase for the week and 23% this year. Analysts attribute the surge to heightened demand for safe-haven assets amid global uncertainty. The declining dollar further supports gold prices. Bank of America predicts gold could reach $3,000 per ounce in the next 12-18 months. Other metals, such as platinum and silver, also saw gains.
Africans sue British oil giant for $310 million – Reuters
Nigerian communities are demanding 505 billion naira ($310 million) in damages from Shell for repeated oil spills in the Niger Delta. Over 1,200 representatives from Ilaje local government have filed a complaint with the Abuja Federal High Court, accusing Shell of violating a court order by planning to sell its onshore assets in Nigeria for $2.4 billion. Activists, including Amnesty International, are urging the government to halt the sale until environmental concerns are addressed. Shell, operating in Nigeria for over 80 years, denies responsibility for the spills, blaming sabotage and illegal extraction. The communities are asking the court to stop the asset sale until compensation claims are resolved.
Russia ready to use crypto in trade – Vedomosti
Russia is testing cross-border payments in digital currencies with a focus group of selected importers and banks, according to Vedomosti. The initiative, formed by financial authorities, aims to facilitate international trade settlements amidst challenges with dual-use goods. This follows legislation allowing the Bank of Russia to authorize digital currency for such transactions, effective September 1. President Putin emphasized the need for regulation of cryptocurrencies to enhance economic opportunities, and the central bank plans more participants in the project.
EU country calls for Russian LNG ban
Belgian Energy Minister Tinne Van der Straeten stated that Belgian companies cannot terminate long-term contracts with Russia for liquefied natural gas (LNG) unless there are EU-wide restrictions. She emphasized the need for a unified European approach to prevent Russian LNG imports, as current EU rules provide insufficient grounds for breaking contracts, which are typically ten years long and predate the Ukraine conflict. Despite calls for action, LNG imports from Russia to the EU have increased, with Belgium and Spain being the largest buyers. A recent EU ban on certain Russian LNG operations has not yet been fully implemented.
EU report flags risks of high energy prices
Former ECB chief Mario Draghi stated that the European Union's global competitiveness has declined due to the loss of cheap Russian energy. He emphasized that high energy prices are a key challenge for EU countries, which can no longer depend on foreign markets. Energy prices in the EU remain significantly higher than in the U.S., affecting competitiveness. Sanctions and the Nord Stream pipeline sabotage have drastically reduced Russian gas supplies, prompting the EU to seek more expensive liquefied natural gas (LNG) from the U.S. and the Middle East. Russian gas's share of EU imports fell from 40% in 2021 to 16% in early 2023.
U.S. Blacklists UAE-Based Shipowners for Serving Arctic LNG 2
U.S. Blacklists UAE-Based Shipowners for Serving Arctic LNG 2
The U.S. Treasury's Office of Foreign Asset Control has imposed new sanctions on service providers for Novatek's Arctic LNG 2 gas export terminal. This facility has been blacklisted as part of a calibrated effort to constrain Russian energy exports, allowing enough outflow to maintain global price stability while using tailored sanctions to impose limits at the margins.
The newly listed firms include Smart Solutions Ltd., a provider of components for the Arctic LNG 2 plant's gravity-based structures - the monolithic concrete bases that Novatek assembled in Murmansk and floated out to the construction site in the Gulf of Ob. Smart Solutions allegedly chartered the Audax and Pugnax, two module carrier vessels that the U.S. has already blacklisted.
Treasury also sanctioned a Novatek subsidiary in the UAE that the U.S. has linked to Arctic LNG 2's sanctioned operations. According to the Treasury, Novatek's New Transshipment FZE allegedly owns four shadowy LNG carriers that were bought to pick up Arctic LNG 2's banned cargoes.
The newly listed UAE firms include New Transshipment and four majority-owned holding companies, LNG Alpha, Beta, Gamma and Delta Shipping. These firms own the LNG carriers North Air, North Mountain, North Way and North Sky, respectively.
Three sanctioned ships that picked up the first shipments from Arctic LNG 2 have stalled off Russia's Pacific Coast, unable to offload their sanctioned cargoes, according to open-source intelligence analysts. Given the severe challenges with finding export routes, Bloomberg reports that Arctic LNG 2 has been forced to shut down production, just months after it started.
The Yamal LNG plant, located on the opposite side of the Gulf of Ob from Arctic LNG 2, is run by the same operator but is not sanctioned. It continues to export Russian LNG to European buyers at a rate of about 20 million tonnes per year, the same amount as Arctic LNG 2's nameplate capacity.
Source:
Source:
(1) https://maritime-executive.com/article/u-s-blacklists-uae-based-shipowners-for-serving-arctic-lng-2
US slaps anti-Russia sanctions on Indian firms
The US imposed sanctions on two Mumbai-based companies, Gotik and Plio Energy, for their alleged links to Russia's Arctic LNG 2 project, developed by Novatek. The State Department aims to increase costs on those supporting Russia's war effort and expanding its energy leverage. The sanctions also target two vessels linked to the project. Despite Russia inviting Indian firms to participate, India is not involved in the project. The US and EU have tightened sanctions against Russian LNG this year, which affected several Novatek projects. In 2023, Russia exported 32.3 million tons of LNG, mainly to Europe and Asia.
Russia responds to Ukraine’s refusal to extend gas transit deal
Kiev will not extend its gas transit agreement with Moscow, set to expire in 2024, potentially raising gas prices for EU consumers, according to Kremlin spokesman Dmitry Peskov. He warned that Europeans may face higher costs and a less competitive industry if they turn to alternative suppliers, including US LNG. Ukrainian President Vladimir Zelensky confirmed that after the contract expires, Ukraine will collaborate with the EU on gas transit decisions. The deal, brokered by the EU in 2019, has allowed significant gas flow through Ukraine, but Gazprom's exports to the EU have drastically dropped since 2022, and some EU nations have halted imports voluntarily. Ukrainian officials are reportedly in discussions with EU counterparts to ensure continued gas transit next year.
EU country ramping up Russian LNG imports
A report from the Institute for Energy Economics and Financial Analysis (IEEFA) reveals that French imports of liquefied natural gas (LNG) from Russia more than doubled in the first half of 2023, despite EU commitments to stop consuming Russian fuel by 2027. France imported nearly 4.4 billion cubic meters of Russian LNG from January to June, up from over 2 billion last year. Overall, Russian LNG shipments to the EU increased by 7%. French company TotalEnergies cited contractual obligations from before the Ukraine conflict. The French Finance Ministry attributed the surge to disruptions in LNG trade from the Middle East due to Houthi attacks, leaving Russian shipments unaffected.
US hindering EU efforts to abandon Russian gas – Bloomberg
In July, liquefied natural gas (LNG) shipments from Russia to the EU nearly matched those from the US, with around 1.3 million tons from Russia and 1.5 million tons from the US. This narrowing gap is attributed to declining US shipments as suppliers focus on higher-paying markets in Asia. Despite a June ban on certain Russian LNG operations, Russian imports are still allowed through EU terminals. A future transshipment prohibition is expected to further limit Russian fuel logistics. Although the EU has significantly reduced Russian gas imports since 2021, reliance on US supplies is set to continue for years.
Ukraine to buy US gas for first time
Kiev to shift from Russian gas, signs deal with US for LNG imports. Ukraine lacks regasification facilities but will start imports this year. Ukraine also seeking alternatives to Russian pipeline gas. Ukraine's energy capacity damaged by conflict with Russia. Russia intensifying strikes on Ukrainian military and energy facilities in response. Ukraine launching long-range attacks on Russian energy infrastructure.
IMF analysts warn Europe on energy security
IMF study warns conflict between Moscow and Kiev keeping energy prices high in Europe. EU considers restrictions on Russian LNG imports. Continuous conflict could persistently increase energy prices in Europe. EU aims to phase out all Russian fossil fuel imports by 2030. EU considering import ban on Russian LNG, proposed measures would prevent re-exporting but fall short of outright ban. EU state could veto new Russia sanctions.
EU states ‘surprised’ at Russia’s economy resilience – media
EU nations seek Commission assessment of potential ban on Russian LNG shipments, Reuters reports. EU considering restrictions on Russian LNG exports in 14th sanctions package. Concerns raised about impact on bloc's economy. Hungary may veto sanctions proposal, citing potential for higher energy costs. Kremlin warns against Russian LNG restrictions, says they would lead to higher gas prices for EU consumers.
France ramps up imports of Russian gas – Politico
France's purchases of liquefied natural gas (LNG) from Russia surged by 75% in 2024, totaling 1.5 million tons. Despite EU plans to reduce energy dependence on Russia, French imports increased significantly. TotalEnergies has long-term contracts with Russia for gas purchases.
Russian gas exports to EU approaching ‘technical maximum’ – Vedomosti
Russian gas deliveries to the EU and Moldova via Ukraine are nearing maximum capacity, with 1.31 billion cubic meters delivered in October, according to Gazprom. Daily supplies averaged 42.3 million cubic meters, a 5% increase from the previous month. Despite sanctions since the Ukraine conflict began in February 2022, Russian gas continues to flow to the EU. Currently, only Ukraine and TurkStream transport Russian gas to Europe. Ukraine plans to discontinue its transit agreement with Gazprom by the end of the year. Hungary reported importing a record 6.2 billion cubic meters of gas via TurkStream this year.
EU warns against ‘dangerous’ Russian gas
EU energy chief Kadri Simson stated that any new agreement to continue Russian gas supplies through Ukraine would be "dangerous." The EU is prepared for a winter without Russian gas, with strong storage levels and alternative supply routes. Despite a significant decrease in reliance on Russian gas from 45% three years ago to 18% now, some member states, including Hungary and Austria, still import it. A key transit agreement between Moscow and Kiev expires on December 31, and Ukraine aims to replace Russian gas with supplies from Azerbaijan. Gazprom's CEO warned that the EU's refusal of Russian gas could lead to economic challenges.
Nov 4 (Reuters) - Oil prices climbed nearly 3% on Monday on OPEC+'s decision to delay plans to increase output by a month, while the market braced for a critical week in which Americans will elect a new president.
Brent futures were up $2.05, or 2.8%, at $75.15 a barrel by 12:50 p.m. ET (1750 GMT). U.S. West Texas Intermediate (WTI) crude rose $2.09, or 3.0%, to $71.56.
On Sunday, OPEC+ said it would extend its output cut of 2.2 million barrels per day (bpd) for another month in December, with an increase already delayed from October because of falling prices and weak demand.
Oil Rises on Decline in US Inventories as OPEC+ Considers Delaying Output Hike
Oil prices rebounded on Wednesday, rising more than 2% after data showed U.S. crude and gasoline inventories fell unexpectedly last week and on reports that OPEC+ may delay a planned oil output increase.
After falling more than 6% earlier in the week on the reduced risk of wider Middle East war, Brent crude futures settled up $1.43, or 2.01%, at $72.55 a barrel. U.S. West Texas Intermediate crude rose $1.4, or 2.08%, to $68.61.
U.S. gasoline stockpiles fell unexpectedly last week to a two-year low on strengthened demand, the Energy Information Administration said, while crude inventories also posted a surprise drawdown as imports slipped.
U.S. imports of crude oil from Saudi Arabia fell to their lowest point last week since January 2021, at just 13,000 bpd, down from 150,000 bpd the previous week. Crude imports from Canada, Iraq, Colombia, Brazil all slipped on the week, the EIA said.
“The most supportive element was gasoline inventories drawing amid higher implied demand week-on-week,” Kpler analyst Matt Smith said, adding lower imports helped crude oil inventories eke out a minor draw.
Europe Stocks Up on LNG Ahead of Winter
Europe Stocks Up on LNG Ahead of Winter
For the first time in ten months, Europe’s imports of liquefied natural gas rose in October from the previous month as it moved to fill its gas storage sites for the winter in which the transit deal for Russian pipeline gas flows via Ukraine expires.
The rare October jump in LNG imports was largely due to buyers stocking up on the fuel at steady prices at the end of the summer, while Asia’s LNG imports slightly fell last month, likely due to lower Chinese purchases, per data from commodity analytics firm Kpler cited by Reuters columnist Clyde Russell.
Although Asia’s October LNG imports fell from September, they rose compared to a year ago. Asian imports have also jumped year to date compared to last year, while Europe’s have slumped, in a sign that the industry has been struggling and shifting away from gas. The milder 2023/2024 winter also played a role in Europe’s lower LNG imports this year compared to 2023.
Once again at the mercy of the winter weather, Europe took advantage of steady prices in August and September and ordered more LNG cargoes for October delivery to top up natural gas storage sites.
Russia’s Crude Output in October In-line with OPEC+ Target
Russia’s Crude Output in October In-line with OPEC+ Target
Russian data show the nation’s crude production in October was nearly in-line with its OPEC+ quota. The country pumped 8.973 million barrels a day of crude last month, up by ~3,000 barrels a day compared with September, and just 5,000 barrels a day above the nation’s quota for the month. Russia is currently implementing two sets of curbs to its crude output: a 500,000 barrel-a-day reduction announced early last year, a s well as a 471,000 barrel-a-day cut it promised in March that will end at the end of the current year.
Back in July, Russia, Iraq and Kazakhstan submitted their compensation plans to the OPEC Secretariat for overproduced crude volumes for the first six months of 2024. According to OPEC, the entire over-produced volumes will be fully compensated for over the next 15 months through September 2025, with Russia ‘paying back’ a cumulative 480 kb/d, Iraq 1,184 kb/d and Kazakhstan 620 kb/d.
According to commodity analysts at Standard Chartered, the compensatory output cuts by the three OPEC members work out to a combined 370 kb/d reduction in October, and then an amount varying between 162 kb/d and 206 kb/d for November 2024 through to September 2025. StanChart has worked out that adding the compensation schedule to the recently announced reduction in targets due to delaying the implementation of tapering will result in OPEC production clocking in at 530 kb/d lower in Q4-2024; 540 kb/d lower in Q1 and Q2-2025 and 560 kb/d lower in Q3-2025, if all commitments are kept. StanChart has argued that the market's current assumption that there will be no compensation reduction is wrong because it’s highly unlikely that other OPEC+ countries would take it lightly. StanChart says Saudi Arabia, in particular, is unlikely to accept any further backsliding on promises made by the overproducers, noting that the high-profile visits to Iraq and Kazakhstan by the OPEC Secretary General, Haitham al Ghais suggests that OPEC intends to follow up on the promised cuts.
New 'wastewater' jet fuel could cut airplane emissions by 70%
New 'wastewater' jet fuel could cut airplane emissions by 70%
Scientists have discovered how to convert wastewater into biofuel to cut plane emissions by 70% — creating a new sustainable version of aviation fuel using biomass and agricultural waste. A new technology can convert wastewater into biofuel to cut plane emissions by 70% versus conventional jet fuel, scientists say.
Sustainable aviation fuel (SAF) currently makes up less than 1% of the fuel used in the aviation industry, but there is a pressing need to find greener fuel solutions as 2.5% of global carbon dioxide emissions come from aviation.
Mainstream aviation fuel options use oil, while alternative options have relied on fat or grease. In a study published April 25 in the journal ACS Sustainable Chemistry and Engineering, scientists outlined a technology that converts wastewater from breweries and dairy farms into the ingredients needed for SAF — namely volatile fatty acids.
Source: https://www.livescience.com/technology/engineering/new-wastewater-jet-fuel-could-cut-airplane-emissions-by-70-percent
Russia Tells Europe to Negotiate with Ukraine for Gas Transit Deal
Russia Tells Europe to Negotiate with Ukraine for Gas Transit Deal
Russia has said it’s willing to continue supplying gas to Europe via Ukraine if Kyiv and the involved European countries can come to an agreement.
"Of course, in my opinion, the European countries that currently receive gas through this corridor are interested in continuing such cooperation," Russian Deputy Prime Minister Alexander Novak, who is in charge of Russia's energy policy, told reporters "We are ready to supply (gas), but not much depends on us, so probably this should be negotiated directly between the users and the country through which the transit is provided."
Last year, Ukraine signaled it has no intention to renew a five-year pipeline transit agreement to supply natural gas to EU countries when it expires on December 31, 2024, while EU energy chief Kadri Simson indicated that the EU executive has "no interest" in pushing to revive the agreement. The EU has warned member countries to prepare for a world without Russian gas, with Ukraine gas amounting to 5% of total EU gas imports. Aura Sabadus, a senior analyst at the ICIS market intelligence firm, told Politico that Austria, Hungary and Slovakia are likely to be the hardest hit when the imports are cut off.
Uncertainty Is Rife in the European Natural Gas Market
Uncertainty Is Rife in the European Natural Gas Market
With the current transit contract for Russian gas through Ukraine expiring at the end of this year, it’s now a desperate scramble for Slovakia, Hungary, and (to a lesser extent) Austria to secure new deals for alternative gas, while the rest of the European Union watches from the sidelines, simply hoping that new deals don’t disrupt the market. The only silver lining is that EU gas storage is pretty much full for the winter, and meteorologists are predicting a mild one.
Last week, we saw Hungary’s MOL sign a unilateral deal with Russian Lukoil. And this week, we saw Slovakia’s SPP (the country’s main gas buyer) sign a short-term gas purchase contract with Azerbaijan’s state-run SOCAR. An extension of the Ukraine transit deal is highly unlikely to materialize because at this point it would be political suicide for the EU, though pro-Russian sentiments are that a Trump presidency could throw a spanner in the works that is favorable to Moscow. He won’t take office until January, however, and the deal expires at the end of December, so the scramble is on in full force. Slovakia’s move this week to cut another alternative supply deal further indicates that the country believes there will be no extension of the Ukraine transit deal. SPP has also entered into gas supply contracts with BP, Exxon, Shell, Eni and RWE to further diversify, but it comes at a high cost (almost $150M more than it would have spent on Russian gas).
Source: https://oilprice.com/Energy/Energy-General/Uncertainty-Is-Rife-in-the-European-Natural-Gas-Market.html
World’s Top Oil Traders Buy Up Fuel from Africa’s Biggest Refinery
World’s Top Oil Traders Buy Up Fuel from Africa’s Biggest Refinery
The large commodity trading firms Vitol and Trafigura, as well as supermajor BP, are the biggest and dominant buyers of fuels lifted from the Dangote refinery in Nigeria, Africa’s newest and largest crude processing facility, Bloomberg reported on Wednesday, citing data from Geneva-based oil and gas analytics firm Precise Intelligence.
The Dangote refinery began the production of fuels in January 2024, marking the start-up of the plant that has seen years of delays. The plant began to ramp up processing rates in the middle of this year and has yet to reach its huge capacity to process as much as 650,000 barrels per day (bpd) of crude.
At full capacity, the refinery, owned by the Dangote Group of Africa’s richest person, Aliko Dangote, is expected to meet 100% of Nigeria’s demand for all refined petroleum products. So far, Nigeria, the biggest oil producer in Africa, has been importing all of the fuel it consumes.
The refinery will also have a surplus of each of the products for export. It has yet to reach full capacity, expected at some point next year.
So far, most of the refinery’s shipments of fuel have been picked up by the three major oil traders—the world’s largest independent oil trader, Vitol Group, commodity trading giant Trafigura, and integrated oil and gas major BP, according to Precise Intelligence’s data.
The figures also showed that the Dangote refinery has loaded nearly 45 million barrels of fuel since it began operations earlier this year. Diesel and fuel oil have dominated loadings as they have accounted for 60% of all shipments.
Aliko Dangote has discussed crude supply to the refinery and fuel supply to Nigeria with Nigeria’s President Bola Tinubu.
In October, the Dangote refinery received four cargoes from state oil firm NNPC under a sale agreement to deliver crude which the refinery will pay in naira, the local currency, Nigerian media reported at the time.
By Tsvetana Paraskova for Oilprice.com
UAE’s ADNOC to Supply Gas to Germany from Its New LNG Project
UAE’s ADNOC to Supply Gas to Germany from Its New LNG Project
Abu Dhabi’s national oil company ADNOC signed on Wednesday a long-term supply agreement for its Ruwais LNG project currently under development and will deliver 1 million tons of the super-chilled fuel to German company SEFE for 15 years.
The deal signed today converts the previous Heads of Agreement between ADNOC and German state firm SEFE announced in March into a definitive agreement.
The liquefied natural gas that will be delivered to SEFE will primarily be sourced from the Ruwais LNG project, with deliveries expected to start in 2028 upon commencement of its commercial operations.
So far, ADNOC has secured more than 7 million tonnes per annum (mtpa) of Ruwais LNG project’s production capacity as committed to international customers through long-term agreements, the UAE’s company said.
Commenting on the deal with the German company today, Fatema Al Nuaimi, Executive Vice President, Downstream Business Management at ADNOC, said, “Natural gas accounts for over a quarter of Germany’s energy supply and we are very pleased to support the country’s energy security through this landmark agreement with SEFE for the lower-carbon Ruwais LNG project.”
In June, ADNOC took the final investment decision to move forward with the Ruwais LNG project, which will more than double the existing LNG production capacity in the United Arab Emirates.
The project will consist of two 4.8 million metric tons per annum (mmtpa) LNG liquefaction trains with a total capacity of 9.6 mmtpa. This would more than double ADNOC’s existing UAE LNG production capacity to around 15 mmtpa, as the company builds its international LNG portfolio.
The project, located in Al Ruwais Industrial City in the Al Dhafra region of Abu Dhabi, will be the first LNG export facility in the Middle East and North Africa (MENA) region to run on clean power, making it one of the world’s lowest-carbon intensity LNG plants, ADNOC says.
By Charles Kennedy for Oilprice.com
Senegal Set to Ship Its First LNG in Early 2025
Senegal Set to Ship Its First LNG in Early 2025
West African country Senegal is on track to see the first LNG shipment from a major gas and LNG project operated by BP early next year, Senegal’s Deputy Energy Minister Cheikh Niane told Bloomberg on Wednesday.
The Greater Tortue Ahmeyim (GTA) continues to be “on track” per the latest timeline, and the first gas extraction is expected this year, Niane told Bloomberg on the sidelines of the ADIPEC energy industry event in Abu Dhabi.
The Greater Tortue Ahmeyim LNG export project offshore Mauritania and Senegal is being developed by UK-based supermajor BP and has seen several delays in recent years.
Source: https://oilprice.com/Latest-Energy-News/World-News/Senegal-Set-to-Ship-Its-First-LNG-in-Early-2025.html
Vitol CEO sees $70-$80/bbl oil prices in 2025, flags supply uncertainty
Vitol CEO sees $70-$80/bbl oil prices in 2025, flags supply uncertainty
SINGAPORE, Nov 7 (Reuters) - Global oil prices are expected to stay in the $70 to $80 per barrel range in 2025, similar to 2024, while geopolitical risks create uncertainty around supply, Russell Hardy, CEO of Vitol, the world's largest independent oil trader, said on Thursday.
World oil prices have been capped by concerns about an unwinding of OPEC+ supply cuts in 2025 and China's weak oil demand growth despite risks of supply disruption in the Middle East.
China faces a squeeze on supplies of cheap Iranian crude, which make up about 13% of imports by the world's biggest importer of oil, if Donald Trump ramps up enforcement of sanctions on Tehran after his return as U.S. president in January.
Janet Kong, CEO of Singapore-based Hengli Petrochemical International, said there is currently 4 million barrels per day (bpd) of spare oil capacity globally, reducing concerns about supply.
Instead, she expects fuel demand growth in China and India, the world's No. 2 and 3 oil consumers, to drive global oil prices in 2025.
Weak fuel demand and export constraints have led to a drop in Chinese refining utilization rates to below 80%, which is "very low" by industry standards, said Kong, who heads the trading arm of Chinese producer Hengli Petrochemical (600346.SS). Chinese refining margins are unlikely to recover in the near term, she said.
Russia explores plan to merge Rosneft with Gazprom subsidiary and Lukoil, WSJ reports
Russia explores plan to merge Rosneft with Gazprom subsidiary and Lukoil, WSJ reports
Nov 9 (Reuters) - Russia is working on a plan to merge state-backed Rosneft Oil (ROSN.MM), with Gazprom Neft (SIBN.MM) and Lukoil (LKOH.MM),
, creating the world's second-biggest crude oil producer, the Wall Street Journal reported on Friday.
Talks between executives and government officials took place over the past few months, and a deal may or may not happen, the newspaper said, citing people familiar with the matter whom it did not identify.
Source: https://www.reuters.com/markets/deals/russia-explores-plan-merge-rosneft-with-gazprom-subsidiary-lukoil-wsj-reports-2024-11-09/
UAE Invests Billions in AI to Diversify Economy Beyond Oil
UAE Invests Billions in AI to Diversify Economy Beyond Oil
The United Arab Emirates’ state-owned energy giant Abu Dhabi National Oil Company (ADNOC) is breaking barriers in the global energy industry by integrating a highly autonomous form of Artificial Intelligence known as “Agentic AI” across the entire length of its value chain. The massive project is a joint undertaking, with ADNOC partnering with other international industry heavyweights G42, Microsoft and AIQ in the hopes of accessing the United States’ technologies to catalyze the Emirates’ own ambitious tech sector.
This innovative approach comes as part of an effort to diversify the United Arab Emirates' economy and ease its heavy dependence on oil and other hydrocarbons. The government-backed G24 received a $1.5 billion investment from Microsoft in April to do just that. “Emirati officials believe the Gulf state's bet on artificial intelligence will strengthen its international clout by making it a key economic actor long after demand for oil has dried up,” Reuters reports.
As part of this initiative, the UAE is investing billions of its own dollars into developing and applying Artificial Intelligence. So far, this has funded projects including Arabic and Hindi language chatbot applications modeled off of OpenAI's ChatGPT. But the scale of Agentic AI will be leaps and bounds beyond those pilot projects.
Agentic AI allows computing systems to operate autonomously, independently carrying out tasks on behalf of humans to achieve set goals. “Unlike traditional AI models that simply respond to prompts or execute predefined tasks, agentic AI can make decisions, plan actions, and even learn from its experiences – all in pursuit of objectives set by its human creators,” a September Forbes article explained.
Source: https://oilprice.com/Energy/Crude-Oil/UAE-Invests-Billions-in-AI-to-Diversify-Economy-Beyond-Oil.html
OPEC's Leader is Making Big Moves in Carbon Markets
OPEC's Leader is Making Big Moves in Carbon Markets
While the world is watching COP29 in oil rentier state Azerbaijan, OPEC's leader, Saudi Arabia, presents a new addition to its economic diversification strategy: a voluntary carbon market. Even though most analysis is currently linking the announcement of a new carbon-trading market to the COP29 breakthrough entailing rules for a UN-administered global emissions market, the real drivers of the Saudi move are clear: monetization of every single asset the country holds in theory. A statement made by Riham ElGizy, CEO of Saudi's RVCMC (Regional Voluntary Carbon Markets Company), indicated that 2.5 million tons of carbon credits will start to be auctioned today. RVCMC also stated that the funds will help climate projects in the global south and support the Kingdom's net zero goals.
The Saudi move was already anticipated since 2021, when RVCMC was set up as a joint venture between the Saudi sovereign wealth fund PIF and the Saudi Tadawul Group Holding Company (Tadawul Group), with PIF holding 80% and the Saudi Tadawul Group 20%. It is now remarkable that PIF is also the latter group's main shareholder. In 2021, PIF and Tadawul announced the Voluntary Carbon Market (VCM) initiative. In 2022, during the so-called 'Davos in the Desert' or Future Investment Initiative (FII), 1 million tons of carbon credits were already auctioned. For PIF and others, setting up VCMC is a logical step, as it supports and finances the Kingdom's green agenda, as shown in several green bonds, raking in billions of dollars and financing major renewable energy projects. In October 2024, an MOU was signed between the Regional Voluntary Carbon Market Company (RVCMC) and the Clean Development Mechanism Designated National Authority (CDMDNA), with a complete strategy to increase, expand, and support the Kingdom's carbon markets. It also falls directly in the Saudi Vision 2030 strategy, supported by Crown Prince Mohammed bin Salman, to reach net-zero emissions by 2060 and cut carbon emissions by 278 million tons annually by 2030 under the Saudi Green Initiative. The latter also includes ambitious carbon capture targets, with plans to capture 44 million tons of CO2 annually by 2035 and utilize 2 million tons daily to produce eco-friendly products like green methanol and clean fuels.
South Korean shipbuilder HD Hyundai Mipo has secured a new order worth KRW 514.8 billion (around $370 million) for the construction of four LNG bunkering vessels.
South Korean shipbuilder HD Hyundai Mipo has secured a new order worth KRW 514.8 billion (around $370 million) for the construction of four LNG bunkering vessels.
The shipbuilding contract was revealed in HD Hyundai Mipo’s stock exchange filing on November 7, 2024.
The deal includes the construction of four 18,000 cubic meter (cbm) LNG bunkering vessels scheduled to be delivered by the end of October 2028 to an undisclosed shipping company in Asia.
While the shipbuilder did not disclose the name of the shipowner, market rumors indicate that Singapore’s Eastern Pacific Shipping (EPS) and Swiss major MSC Mediterranean Shipping Company have jointly ordered these four bunkering vessels.
Offshore Energy has reached out to the shipping companies and is yet to receive a response.
The latest order underpins the ongoing rise in the number of LNG-fueled ships. According to the industry coalition SEA-LNG, over 2,000 of the world’s 60,000 largest vessels will be powered by LNG in the near future with active LNG-fueled vessels now representing over 2% of the global shipping fleet.
In support of this expansion, LNG bunkers are currently available in 185 ports, with an additional 50 being added next year. The bunkering vessel fleet has increased from a single vessel in 2010 to 60 in operation today, with a further 13 on order and significant interest in the maritime community to continue to invest in these assets.
Just recently, MSC signed a deal with Chinese Jiangsu Rongsheng Heavy Industries for the construction of up to twelve new LNG dual-fuel containerships. The price tag for the 12,000 TEU vessels is believed to be $170 million each, bringing the cumulative value of the deal to more than $2 billion.
The shipowner also has 18 LNG-powered 19,000 TEU and 11,500 TEU containerships on order at two Chinese yards, Shanghai Waigaoqiao Shipbuilding (SWS) and Penglai Jinglu. The ships are slated for delivery between 2027 and 2028.
Source" https://www.offshore-energy.biz/south-korean-shipyard-bags-370-million-contract-to-build-4-lng-bunker-vessels/
Final Chinese Module Arrives at Russian Arctic LNG 2 Plant, As U.S. Snoozes on Sanctions Action
Final Chinese Module Arrives at Russian Arctic LNG 2 Plant, As U.S. Snoozes on Sanctions Action
China has successfully completed a two-month-long shipping operation to deliver a 650 MW power plant to the Russian Arctic. The final heavy lift vessel, Hunter Star, called at the Arctic LNG 2 project after a challenging late-season voyage across thousands of miles of sea ice.
Three heavy lift vessels, Ocean 28, Nan Feng Zhi Xing, and Hunter Star, departed from ports in eastern China throughout September. They carried power plant modules constructed at Wison New Energies’ Zhoushan yard.
Industry insiders expressed surprise that the U.S. failed to stop the vessels.
“It’s a fact that hardliner Assistant Secretary Pyatt has seemingly exempted Wison New Energies from his stated goal to “kill Arctic LNG 2” and any sanctions actions. That is concerning,” one analyst told gCaptain.
The U.S. State Department had announced a new round of sanctions last week, but did not include Wison. Focus appears to have shifted to interdicting the transport of LNG from Arctic LNG 2, rather than stopping the continued construction of the facility. According to reports Novatek plans to re-start assembly of Train 3 in January 2025 and has begun to re-hire workers for its Belokamenka construction yard.
Wison has been Novatek’s key ally in completing the flagship liquefied natural gas project. The company constructed more modules for the plant than any other Chinese yard. In total it completed 17 out of 33 modules for Arctic LNG 2 weighing between 5,000 and 25,000 tons with construction contracts valued at several billion USD. Four modules remain undelivered at its Zhoushan yard, with a further two aboard heavy lift vessel Wei Xiao Tian Shi near Harbin Island in southern China.
The company recently announced a pivot away from Russia and has made inroads in cooperating with U.S. and European firms, including with companies Baker Hughes, Chart, and Eni. During an investor call earlier this year Chart listed Wison as a customer.
Asked about its cooperation with Wison and the company’s apparent delivery of modules to Russia, an Eni spokesperson told gCaptain that “Eni fully complies with the international sanctions regime; our activities with Wison are not affected by any kind of international restriction.”
“Wison’s increasing interconnectedness with Western markets appears to have shielded it from facing any consequences for its apparent sanctions violation,” an LNG market analyst concluded.
In contrast, smaller yards, like Penglai Jutal Offshore Engineering Heavy Industries Co. (PJOE) were unable to escape U.S. sanctions earlier this year. PJOE was sanctioned for its “involvement in the manufacture and shipment of highly specialized LNG modules specifically designed for the Arctic LNG 2 project in Russia.”
The delivery of Wison’s power plant solves the plant’s power supply issue. Novatek intends to commission Train 2 as early as December and start-up production will be used for cool-down of internal storage tanks. Train 1 was commissioned in similar fashion at the end of December 2023.
Source: https://gcaptain.com/final-chinese-module-arrives-at-russian-arctic-lng-2-plant-as-u-s-snoozes-on-sanctions-action/
Artificial Photosynthesis Breakthrough: Revolutionary Gel Turns Sunlight Directly into Clean Fuel
Artificial Photosynthesis Breakthrough: Revolutionary Gel Turns Sunlight Directly into Clean Fuel
Scientists design bioinspired hydrogels that mimic plant photosynthesis for clean hydrogen energy production.
A new hydrogel developed by Japanese scientists uses sunlight to efficiently produce hydrogen from water, mimicking natural photosynthesis. This innovation promises to enhance clean energy production by improving efficiency and reducing costs, potentially replacing current technologies with a more sustainable solution.
Artificial Photosynthesis Renewable Energy Technology
Scientists have long aspired to replicate how plants convert sunlight into energy, hoping to create sustainable energy solutions. Artificial photosynthesis, the process of using sunlight to drive clean energy-producing reactions, aims to imitate this natural method. Yet, achieving a synthetic system that functions as smoothly as photosynthesis has been a major challenge—until now.
Researchers from the Japan Advanced Institute of Science and Technology (JAIST) and the University of Tokyo have developed a new bioinspired hydrogel capable of generating hydrogen and oxygen by using sunlight to split water molecules. This innovation holds significant promise in the clean energy landscape, with hydrogen viewed as a highly viable fuel for the future. Unlike solar photovoltaics and electrolysis-based hydrogen production, which require external energy inputs, this hydrogel system directly uses sunlight to split water, mirroring nature and potentially increasing both efficiency and cost-effectiveness. The study was recently published online in Chemical Communications.
How I’m turning seaweed into biofuel for cars in Barbados
How I’m turning seaweed into biofuel for cars in Barbados
“Barbados has committed to becoming fossil-fuel-free by 2030, but that will probably cause huge economic damage because not a lot of people here can afford an electric car. Brazil solved this problem with cars fuelled by sugar-cane biodiesel, but there’s not enough sugar cane grown here to copy that approach. One of my undergraduate students, Brittney McKenzie, saw a possible solution. There is a sargassum seaweed crisis in Barbados. One tourist resort was spending US$2 million every year to remove it from the resort beach. McKenzie asked, what if we use sargassum to make biofuel?
She tested it in the laboratory, and it worked so well that it shifted my whole research trajectory. In this photo, I’m collecting sargassum to put into a digester, along with rum distillery wastewater. Under anaerobic conditions, the microbes in the mix, feeding on the sugar in the wastewater, digest the sargassum and produce gaseous methane biofuel. All the islands in this region of the Caribbean have a sargassum problem and a rum wastewater problem — and ultimately a climate-change problem. This solution is a win–win–win.
We estimate that, if we converted 100,000 fossil-fuel-powered vehicles in Barbados — around 75% — to run on our biofuel, it would remove 17 million tonnes of carbon emissions from the atmosphere over the average vehicle lifetime of 14 years. It would also halve the cost of vehicle fuel for people in Barbados.
In 2021, my colleagues and I co-founded a start-up company, Rum & Sargassum, and now the first challenge is to find ways to scale this up to meet our initial target of 2,000 customers here. Then, we must convince investors that this is a scalable solution for renewable energy.”
Nature 635, 516 (2024)
Oil could plunge to $40 in 2025 if OPEC unwinds voluntary production cuts
Oil could plunge to $40 in 2025 if OPEC unwinds voluntary production cuts
Oil prices may see a drastic fall in the event that oil alliance OPEC+ unwinds its existing output cuts, said market watchers who are predicting a bearish year ahead for crude.
“There is more fear about 2025′s oil prices than there has been since years — any year I can remember, since the Arab Spring,” said Tom Kloza, global head of energy analysis at OPIS, an oil price reporting agency.
“You could get down to $30 or $40 a barrel if OPEC unwound and didn’t have any kind of real agreement to rein in production. They’ve seen their market share really dwindle through the years,” Kloza added.
A decline to $40 a barrel would mean around a 40% erasure of current crude prices. Global benchmark Brent is currently trading at $72 a barrel, while U.S. West Texas Intermediate futures are around $68 per barrel.
Oil, Natural Gas, and US Dollar Technical Analysis: CPI Data, OPEC Cuts, and Geopolitical Tensions
Oil, Natural Gas, and US Dollar Technical Analysis: CPI Data, OPEC Cuts, and Geopolitical Tensions
The US Dollar (DXY) shows strength, supported by rising US yields and steady economic data. Market participants also considered the potential for further gains tied to the “Trump trade.” The US dollar continues to rise after the release of October’s Consumer Price Index (CPI) readings. As per the data, the headline inflation remained stable at 0.2% monthly, while the annual rate peaked at 2.6% from 2.4%. Core inflation remained steady monthly at 0.3%, reinforcing the Fed’s cautious approach. Despite the Federal Reserve’s data-dependent approach, recent inflation figures suggest a stable economic outlook. This has led traders to reduce expectations of an interest rate cut in December.
Oil prices have significantly declined over the past few sessions. Investor sentiment weakened in response to China’s underwhelming fiscal measures, which failed to boost demand optimism. Concerns over supply disruptions in the Gulf of Mexico have eased as Tropical Storm Rafael has dissipated. Meanwhile, OPEC cut its global oil demand growth outlook for 2024 for the fourth consecutive month, citing slowing demand from China and a global shift towards cleaner energy sources.
French Terminals Import Record Volumes of LNG From Russia
French Terminals Import Record Volumes of LNG From Russia
France is importing record volumes of Russian LNG even as overall LNG purchases are falling, ship-tracking data compiled by Bloomberg showed on Monday, highlighting Europe’s growing imports of Russian LNG.
So far this year, France has already imported more LNG from Russia’s Yamal export plant than in any other full year since these deliveries began six years ago, per the data collated by Bloomberg.
Shipments into the French terminal of Dunkirk have surged in particular, also helped by deliveries of German state firm Securing Energy for Europe GmbH (SEFE), the former Gazprom unit in Germany, which the German government nationalized in 2022 after the Russian invasion of Ukraine. EFE has a contract to deliver LNG cargoes from Yamal into Dunkirk inherited by the former owner, Gazprom.
The German state company is buying the Russian LNG cargoes and the contract “is therefore being fulfilled in order to keep the advantage for the Russian side as low as possible,” a spokesperson for Germany’s economy ministry told Bloomberg.
SEFE has never delivered or attempted to deliver Russian LNG into Germany, company spokesman Jan-Peter Haack told Bloomberg in an email.
Saudi Arabia’s Crude Oil Exports Hit a 3-Month High in September
Saudi Arabia’s Crude Oil Exports Hit a 3-Month High in September
Saudi Arabia’s crude oil exports increased by 80,000 barrels per day (bpd) to 5.75 million bpd in September—the highest in three months, the latest data from the Joint Organizations Data Initiative (JODI) showed on Monday.
The September crude exports were the highest since June, likely due to the lower direct crude burning for power generation as the hottest months in the Kingdom ended.
Direct crude burning slumped by 296,000 bpd from August to stand at about 518,000 bpd in September, according to the JODI data which compiles self-reported figures from individual countries.
Saudi Arabia, the world’s top crude oil exporter, saw its oil production fall slightly by 17,000 bpd to 8.98 million bpd in September, while refinery runs hit a four-month high of 2.756 million bpd, up by 35,000 bpd from August, per the JODI data.
The Saudi crude oil production was in line with the Kingdom’s pledge from last summer to keep output at “around 9 million bpd” with the OPEC+ production cuts and the voluntary 1-million-bpd reduction.
Saudi Arabia and its OPEC+ partners have delayed their planned production increase to January 2025 from December 2024. The group currently intends to start adding supply to the market in January next year, initially at a pace of 180,000 bpd for the first month.
However, for a fourth consecutive month, OPEC last week slashed its estimate of global oil demand growth for both this year and next.
LNG Tankers Divert to Europe from Asia After Russia Halts Supplies
LNG Tankers Divert to Europe from Asia After Russia Halts Supplies
LONDON, Nov 18 (Reuters) – At least five cargoes of liquefied natural gas have diverted from Asia to Europe in the past few days, drawn by higher gas prices on the continent after Russia’s Gazprom halted supplies to Austria’s OMV, data from analytics firm Kpler showed.
On Saturday Gazprom halted supplies to top Austrian gas importer OMV after OMV threatened to impound some of the Russian state firm’s gas as compensation for an arbitration it had won over a contractual dispute.
Gazprom notified OMV of the planned halt on Friday, causing European gas prices at the Dutch TTF hub to surge, making it more profitable to send gas to Europe rather than Asia. “ JKM-TTF spread flipped into negative territory last week amid Russian pipeline gas supply concerns and an upcoming cold spell, which saw traders divert LNG cargoes away from Asia and towards Europe,” said Laura Page, manager of gas and LNG insight at Kpler.
The benchmark front-month contract at the Dutch TTF hub was trading at 46.00 euros per megawatt hour on Monday, or $14.49 per mmBtu, the highest level since Nov. 23, 2023. The Asian benchmark Japan Korea Marker (JKM) was trading at around $14/mmBtu, LSEG data showed.
Vivert City LNG tanker, which loaded a cargo from Equatorial Guinea and was heading to Bangladesh, diverted on Friday and is now heading towards Britain’s South Hook terminal.
Gaslog Windsor tanker, which had a cargo loaded with U.S. LNG from Sabine Pass that was initially headed to China, changed its destination on Friday towards Britain’s Isle of Grain terminal.
TC Energy Sees Natural Gas Demand Boosting Core Profit in 2025
TC Energy Sees Natural Gas Demand Boosting Core Profit in 2025
TC Energy Corporation expects to book a higher core profit in 2025 compared to 2024 amid increased demand for natural gas and electricity in North America, the Canada-based pipeline operator said on its Investor Day event on Tuesday.
TC Energy expects its comparable core earnings – or earnings before interest, tax, depreciation, and amortization (EBITDA) – to be in the range of US$7.6 billion-US$7.77 billion (C$10.7 billion to C$10.9 billion) in 2025, up from the top end of US$7.2 billion (C$10.1 billion) of the range expected for this year.
“With natural gas and electricity projected to drive 75 percent of the growth in final energy consumption through 2035, TC Energy’s portfolio of natural gas and power assets strategically align with the vast opportunity we are seeing across our North American footprint,” president and chief executive officer, François Poirier, said in a statement.TC Energy has now aligned its portfolio across complementary businesses, natural gas and power, where wide-scale electrification is a significant common driver of future demand growth, the company said.
“Led by a three-fold increase in LNG exports, strong growth in power generation driven by coal retirements and data center demand, our forecast shows North American natural gas demand increasing by nearly 40 Bcf/d by 2035,” according to the company.
Natural Gas and Oil Forecast: Is a Breakout Above $73.85 on the Cards
Natural Gas and Oil Forecast: Is a Breakout Above $73.85 on the Cards
Key Points:
Key Points:
Brent oil struggles near $73.83 resistance as geopolitical tensions and supply concerns shape market trends.
WTI crude holds steady above $69, reflecting mixed signals from rising inventories and easing Middle East tensions.
U.S. crude inventories surged by 4.8 million barrels, exceeding forecasts, adding downward pressure to oil prices.
Market Overview
Market Overview
WTI crude oil futures held steady above $69 per barrel on Wednesday, supported by a risk premium linked to escalating geopolitical tensions. While heightened uncertainty weighed on energy markets, partial production resumption at Europe’s largest oilfield, Johan Sverdrup, provided some relief.
Simultaneously, a sharp 4.8-million-barrel increase in U.S. crude inventories far exceeded expectations, adding downward pressure. Global energy markets remain balanced between supply concerns and easing tensions in some regions, with oil prices reflecting a mix of geopolitical risks and inventory-driven adjustments. Natural gas markets, similarly, face volatility as traders assess supply stability amid ongoing global uncertainties.
Oil Prices Inch Up on China Demand and Ukraine Escalation
Oil Prices Inch Up on China Demand and Ukraine Escalation
Crude oil prices ticked higher on Wednesday on signs that Chinese demand was picking up and the latest escalation between Russia and Ukraine.
Brent crude was trading at $73.25 per barrel at the time of writing, with West Texas Intermediate at $69.39 per barrel. Both have added over $2 per barrel since last Friday after Ukraine shot ATACMS missiles at targets in Russia following the Biden administration’s U-turn on using the weapons for striking Russian territory.
“This marks a renewed build up in tensions in the Russia-Ukraine war and brings back into focus the risk of supply disruptions in the oil market,” ANZ analysts said in a note, as quoted by Reuters.
Meanwhile, signs are emerging that crude oil demand in China may be on the rebound, Reuters reported, citing Kpler data about Chinese imports. The data suggests that oil imports into China this month could be close to or at record highs—despite repeated reports that Chinese oil demand growth is on life support.
The Kpler data follows a report about China’s oil inventories saying the country’s oil surplus shrank in October, to 550,000 bpd from 930,000 bpd in September. In that report, Reuters’ Clyde Russell said the surplus shrinkage should not be taken as a bullish sign for oil prices, interpreting the numbers as evidence that China was importing more crude that it needed immediately.
Venture Global LNG Project Faces Major Cost Overruns
Venture Global LNG Project Faces Major Cost Overruns
The Plaquemines LNG project led by Venture Global is running over budget and could end up with a total price tag of between $21 billion and $22 billion, Reuters has reported, citing Venture Global’s IPO documents.
Plaquemines LNG will be the company’s second production facility after Calcasieu Pass, with a capacity to produce 20 million tons of the superchilled fuel annually. Production should begin in the coming weeks, despite the setbacks.
The cost overrun for Plaquemines stands at $2.35 billion at the moment but the number could rise further, according to the Venture Global documents, due to rising labor costs, higher steel prices, and more expensive equipment. Venture Global has been embroiled in a dispute with half a dozen European energy majors, which signed up for long-term deliveries from the Calcasieu Pass facility, only to see the LNG sold on the spot market for higher prices and their deliveries delayed.
The way Venture Global did this was by using a loophole that stipulated it could trade its product on the spot market before the production facility was completed. In view of keeping the spot market business going, Venture Global has been delaying the official completion of the Calcasieu Pass for as long as it has been able to. Now that the investors are suing, it may be running out of postponements.
Auction for Bankrupt Sinochem Refineries Fails to Attract Interest
Auction for Bankrupt Sinochem Refineries Fails to Attract Interest
Chinese state-controlled refining and chemicals giant Sinochem may opt to keep three of its small, old, and now-bankrupt refineries, after failing to sell them at auctions, Reuters reported on Wednesday, citing sources with knowledge of the matter.
The three refineries in the eastern part of China are smaller and less sophisticated than the larger newer processing plants.
Two months ago, a Chinese court declared a third Sinochem refinery bankrupt, as Chinese refiners have been struggling this year with tepid fuel demand in the world’s largest crude oil importer.
The bankrupt refineries owned by Sinochem – Shandong Changyi Petrochemical, Shandong Huaxing Petrochemical Group and Zhenghe Group Co Ltd – have a combined processing capacity of 380,000 barrels per day (bpd) of crude.
As the auctions to sell these drew scarce interest, Sinochem is likely to keep them in its portfolio by writing down their debts and renegotiating the back taxes the facilities owe, according to Reuters’s sources familiar with the state giant’s thinking.
Slumping refining margins amid tepid fuel demand in China have already claimed victims among the refineries in the Shandong province, where two plants operated by Sinochem were declared bankrupt in September.
China has seen weaker-than-expected road fuel demand this year, which has prompted a decline in refining margins, leaving many plants in debt.
Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Markets Test Weekly Highs
Natural Gas, WTI Oil, Brent Oil Forecasts – Oil Markets Test Weekly Highs
Key Points:
Key Points:
Natural gas moved away from session highs after the release of the EIA report.
WTI oil is trying to settle above the psychologically important $70.00 level.
Brent oil tests the $74.00 level.
Natural gas pulled back from session highs as traders reacted to the EIA report, which showed that working gas in storage declined by -3 Bcf from the previous week.
If natural gas pulls back below the support at $3.20 – $3.25, it will move towards the next support level, which is located in the $3.00 – $3.05 range.
WTI oil tested new highs as traders focused on rising geopolitical tensions. The strong U.S. job market data provided additional support to oil markets.
If WTI oil settles above the 50 MA at $70.68, it will head towards the next resistance level at $72.00 – $72.50.
Brent oil is trying to settle above the $74.00 level amid broad rally in the oil markets.
A move above the 50 MA at $74.33 will push Brent oil towards the resistance at $77.00 – $77.50.
For a look at all of today’s economic events, check out our economic calendar.
StanChart: Traders Continue to Ignore Non-OPEC Supply Slowdown
StanChart: Traders Continue to Ignore Non-OPEC Supply Slowdown
Standard Chartered: global oil demand in September clocked in at 103.012 million barrels per day.
StanChart points out that traders continue to ignore the fact that non-OPEC supply has slowed more than demand so far in 2024.
StanChart has reported that its model shows that market conditions would allow all the OPEC+ voluntary cuts being rolled back in 2025.
Last month, commodity analysts at Standard Chartered reported that global oil demand hit an all-time high of 103.79 million barrels per day (mb/d) in August, marking the third successive month in which a new all-time demand high has been set. According to StanChart, global oil demand growth clocked in at a healthy 1.32 mb/d in August. Well, it appears that oil markets are poised to finish the year on a bullish note.
On Tuesday, the Joint Organisations Data Initiative (JODI) released its latest oil market report. Following the release, StanChart has worked out that global oil demand in September clocked in at 103.012 million barrels per day (mb/d), the fourth consecutive month global demand has ever exceeded 103 mb/d. The y/y increase in demand in September was 1.136 mb/d, slightly below the average of 1.332 mb/d YTD but an improvement on August, when growth was just 0.631 mb/d.
Previously, StanChart pointed out that oil demand growth, not absolute oil demand, is what has been slowing down from earlier post-pandemic years. Indeed, StanChart has noted that global oil demand has been setting a series of new all-time highs in the current year.
Samsung Heavy unveils wind-assisted LNG carrier design
Samsung Heavy unveils wind-assisted LNG carrier design
Samsung Heavy Industries (SHI) has rolled out its own design for an LNG carrier equipped with wind-assisted propulsion.
The South Korean shipbuilder has been granted approval in principle by the compatriot class society Korean Register and the Liberian Registry for the vessel that sports wing sail technology.
The unit has been designed with the wheelhouse positioned at its bow to address visibility issues, highlighted as a significant challenge for ships equipped with wind-assisted propulsion devices.
In addition, the ship would feature an air reduction device, which, when paired with the wing sails, can significantly improve fuel efficiency while simultaneously reducing carbon emissions, the shipbuilder said.
Commenting on the approval of the ship’s basic design Jang Hae-gi, head of SHI’s technology development unit, said: “Wind power is an important axis in achieving carbon neutrality in the shipbuilding industry,” adding that the company would continue developing other eco-friendly ships that utilise wind power.
Japanese shipping giant Mitsui OSK Lines (MOL) became the first to receive a stamp of approval for a wind-assisted LNG ship earlier this year. The company will install two Wind Challenger rigid, telescopic sails developed jointly with Oshima Shipbuilding on an LNG carrier under construction at Hanhwa Ocean in South Korea, set for delivery in 2026.
Natural Gas and Oil Forecast: Will OPEC+ Delay Output Amid Volatile Demand?
Natural Gas and Oil Forecast: Will OPEC+ Delay Output Amid Volatile Demand?
Key Points:
Key Points:
Geopolitical risks elevate natural gas and oil prices as markets await OPEC+ decisions on production plans.
WTI crude holds above $70, signaling bullish momentum despite weak Chinese demand and volatile global conditions.
OPEC+ meeting on December 1 could postpone production increases amid sluggish global demand and economic uncertainty.
Market Overview
Market Overview
WTI crude oil futures climbed above $70 per barrel, poised for their strongest week in two months, as geopolitical tensions elevated the risk premium in energy markets.
Traders are also closely monitoring the upcoming OPEC+ meeting on December 1, amid speculation that production increases may be further delayed due to sluggish global demand. Weak economic growth in China, a key importer, continues to weigh on consumption, adding complexity to supply dynamics.
Aramco, SINOPEC, and Fujian Petrochemical break ground
Aramco, SINOPEC, and Fujian Petrochemical break ground
The facility is planned to have a 16 million tons-per-year oil refining unit (320,000 barrels per day), a 1.5 million tons-per-year ethylene unit, a two million tons paraxylene and downstream derivatives capacity, and a 300,000 tons crude oil terminal. FPCL, a 50:50 joint venture between SINOPEC and Fujian Petrochemical Industrial Group Company, will own a 50% stake in the complex, with Aramco and SINOPEC each taking a 25% stake. The project is expected to be fully operational by the end of 2030.
The facility is planned to have a 16 million tons-per-year oil refining unit (320,000 barrels per day), a 1.5 million tons-per-year ethylene unit, a two million tons paraxylene and downstream derivatives capacity, and a 300,000 tons crude oil terminal. FPCL, a 50:50 joint venture between SINOPEC and Fujian Petrochemical Industrial Group Company, will own a 50% stake in the complex, with Aramco and SINOPEC each taking a 25% stake. The project is expected to be fully operational by the end of 2030.
Mohammed Y. Al Qahtani, Aramco Downstream President, said: “Building on our strong relationships with both SINOPEC and Fujian Petrochemical, today’s groundbreaking further expands Aramco’s growing downstream investment portfolio in China. We will supply in excess of one million barrels per day of our crude oil to these high chemical conversion assets in China, reinforcing Aramco’s role as a reliable and long-term partner in China’s development. This also advances our liquids-to-chemicals strategy, through which we intend to direct more of our crude towards helping meet rising global petrochemicals demand.”
Ma Yongsheng, SINOPEC Chairman, said: “Both SINOPEC and Aramco are committed to promoting the high-quality development of the petroleum and petrochemical industry. Aramco’s participation supplies long-term reliable and competitive feedstock for the project and further boosts the healthy development of Gulei Petrochemical Base. Successful cooperation in this project marks a new milestone in the China-Saudi all-weather strategic partnership, with a focus on greater domestic circulation and in line with the dual circulation strategy.”
Latest US Sanctions Will Not Hit Osaka Gas Purchases of Russian LNG
Latest US Sanctions Will Not Hit Osaka Gas Purchases of Russian LNG
The latest U.S. sanctions against Russia are not expected to affect the purchases of Japan’s Osaka Gas of Russian LNG under its long-term contract for LNG from the Sakhalin-2 LNG project, Osaka Gas’s president Masataka Fujiwara said on Friday.
On Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Gazprombank in what the Treasury said was “another major step in implementing commitments made by G7 leaders to curtail Russia’s use of the international financial system to further its war against Ukraine.”
The latest sanction measures include the designation of Gazprombank, more than 50 internationally connected Russian banks, more than 40 Russian securities registrars, and 15 Russian finance officials.
Japan’s city gas provider Osaka Gas, which has a long-term agreement to receive LNG from Sakhalin-2, will not see its transactions affected because it does not use Gazprombank for payment settlement for the fuel, Fujiwara said on Friday, as carried by Reuters.
So far, the U.S. Treasury has refrained from imposing sanctions on Gazprombank, which has been used by Russia’s European customers to pay for the natural gas they still receive from Russia.
Europe has reduced its overall reliance on Russian natural gas but has seen its LNG imports from Russia rise.
Russian LNG accounted for 20% of the EU’s liquefied natural gas imports in the first nine months of 2024, compared to 14% for the same period last year, amid markedly lower EU imports of the super-chilled fuel, a report by the EU Agency for the Cooperation of Energy Regulators (ACER) showed last month.
Goldman Sachs Expects Brent Oil to Average $76 Per Barrel in 2025
Goldman Sachs Expects Brent Oil to Average $76 Per Barrel in 2025
Brent Crude oil prices are set to average $76 per barrel next year, down from an expected average of $80 a barrel in 2024, amid an expected surplus on the market, according to Goldman Sachs.
“Our base case is that Brent stays in a $70-85 range, with high spare capacity limiting price upside, and the price elasticity of OPEC and shale supply limiting price downside. However, the risks of breaking out are growing,” the investment bank’s analysts wrote in a note carried by Reuters.
Goldman Sachs expects 400,000 barrels per day (bpd) of surplus on the market in 2025. This surplus is expected to grow to 900,000 bpd in 2026. Therefore, the Wall Street bank sees Brent Crude prices averaging $71 per barrel in 2026.
Goldman Sachs kept its 2025 average price forecast from last month when it said that it sees limited upside for oil prices next year amid sufficient supply and ample spare capacity.
However, there is an upside risk to prices in the near term, if the U.S. enforces stricter sanctions on the Iranian oil industry and exports, according to Goldman Sachs.
Brent Crude prices have the potential to spike to the mid-$80s early next year if Iran’s oil supply declines by about 1 million bpd in case of stricter sanction enforcement when Donald Trump becomes U.S. President, the bank’s analysts noted.
Early on Friday, Brent Crude prices were up by 0.4% at $74.57, and the U.S. benchmark, WTI Crude, traded 0.36% higher at $70.40, amid renewed Ukraine-Russia tensions.
Russia Resumes Ship-to-Ship LNG Transfers Ahead of EU Transshipment Ban
Russia Resumes Ship-to-Ship LNG Transfers Ahead of EU Transshipment Ban
Transshipments of liquefied natural gas have resumed in Russia’s Arctic off Kildin Island near Murmansk. The restart comes around a month earlier than during previous years. The Kildin anchorage is located off the coast of the Kola Peninsula in the eastern Barents Sea.
Energy giant Novatek uses the ship-to-ship transfer of LNG to optimize the utilization of its fleet of ice-capable carriers. Mounting Western sanctions have rendered parts of Novatek’s logistics network, including two floating LNG storage units, unusable.
The first STS of the 2024/25 winter involves the Arc7 ice-class vessel Nikolay Urvantsev and Chinese newbuild Wen Cheng. Transfers routinely take around 48 hours.
Satellite images show Nikolay Urvantsev and Wen Cheng at East Kildin on November 18. Additional transfers can be expected with Singaporean carrier Gui Ying destined for Kildin and holding nearby after traveling up the Norwegian seaboard based on AIS information.
The open water transfer of LNG will gain increasing importance in 2025 as the EU’s transshipment ban takes effect in March. Currently, around 20 percent of Russian Arctic LNG production from the Yamal project is re-exported via European terminals.
If Russia aims to transfer a similar volume via STS operations, the Kildin anchorage could see 55 additional reloadings throughout the next year. In a typical year the site sees around 20 transfers, primarily during winter when conventional LNG carriers cannot travel to Yamal LNG.
Novatek previously relied on a transshipment point further west in sheltered Norwegian waters near the Nordkapp. It transferred several dozen cargoes near Honningsvåg between 2018 and 2020 before switching operations to Russian waters off Kildin Island in August of 2020.
Page updated
Google Sites
Report abuse