2024.11.11

"U.S. Refiners Sustain High Output as Fuel Inventories Remain Low"

U.S. refiners are keeping production above 90% capacity through the end of 2024 due to low fuel inventories, despite typical seasonal slowdowns and lower profit margins. Major refiners like Marathon Petroleum, Valero, and Phillips 66 plan high run rates to meet consistent gasoline and diesel demand.

Analysts note this continued high output reflects minimal seasonal decline and reduced maintenance, driven by profitability on incremental production and inventory concerns, even as new refineries worldwide have pressured margins.

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"Biden Administration Completes Final Oil Purchase for Strategic Reserve as Funds Run Out"

The Biden administration made its final oil purchase for the Strategic Petroleum Reserve (SPR) after depleting funds. The Department of Energy bought 2.4 million barrels for Texas delivery, following a 2022 sale of 180 million barrels to offset price spikes from the Ukraine conflict. The 2022 sales raised nearly $17 billion, but Congress redirected some funds, limiting further buybacks. The administration repurchased 59 million barrels at an average of under $76 per barrel, profiting about $3.5 billion. With SPR levels currently at 390 million barrels, the reserve remains crucial for U.S. energy security amid reduced mandatory sales through 2027.

[SLOW] EIA - Crude Oil Outlook

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"Trump's Return Could Boost U.S. Oil Exports and Tanker Demand, Says d’Amico International CEO"

Carlos Balestra di Mottola, CEO of Italy's d’Amico International Shipping, suggests that Donald Trump’s return to office could positively impact the tanker industry due to his support for U.S. oil production and potentially stricter policies on Iranian exports. He also sees potential benefits from a possible peace deal in Ukraine, which could bolster the European economy, especially if Europe maintains sanctions on Russian oil. While third-quarter profits for d’Amico were down slightly, the company performed well despite a weaker summer market by securing favorable contracts for its tankers.

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"Trump’s Energy Export Boom Faces Risks Amid Potential EU Trade Spat"

Under a Trump administration, U.S. oil and gas producers expect streamlined regulations, likely boosting output and export capacity. However, Trump’s proposed tariffs on European goods could spark retaliatory tariffs from the EU, which currently accounts for nearly half of U.S. LNG and crude oil exports. Losing Europe as a buyer would hurt U.S. exporters, especially LNG, as shipping costs and turnaround times would rise sharply if exports were redirected to Asia. While Europe may seek alternative suppliers to reduce reliance on U.S. imports, the situation presents risks to both U.S. exporters and the transatlantic trade relationship.

[SLOW] EIA - Crude Oil Outlook

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"Torm Sees Crude Tankers Exit Product Market as Middle East Volumes Decline"

Jacob Meldgaard, CEO of Torm, noted that crude tankers that had temporarily entered the product tanker market in the third quarter, affecting earnings, have largely exited. This shift, which restrained Torm’s Q3 earnings ($33,722 per day), is fading, but challenges persist as Middle East export volumes dropped by about 10% month-on-month. Currently, Torm’s fourth-quarter rates are $29,044 per day. Analysts viewed the Q4 performance as steady, with Fearnley Securities noting the bookings were sound, and Omar Nokta from Jefferies maintaining a positive outlook, expecting stable utilization in 2025 despite new deliveries.

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"Russia Considers Merging Top Oil Companies"

Russian officials and business leaders have reportedly discussed a potential merger of the country's biggest oil companies, including state-owned Rosneft, Gazprom Neft, and Lukoil, according to Sources If successful, Rosneft could absorb Gazprom Neft and Lukoil, creating the world's second-largest oil producer after Saudi Aramco. However, all parties involved, including the companies and Kremlin spokespeople, have denied any formal merger discussions. The talks are ongoing but may not result in a deal, and the plans could change.

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