2024.11.13

OPEC Cuts Oil Demand Growth Forecasts for 2024 and 2025 Amid Weak Chinese Demand

OPEC has reduced its global oil demand growth forecasts for 2024 and 2025 due to weaker-than-expected demand from China and other regions.

The 2024 estimate dropped to 1.82 million barrels per day (bpd) from 1.93 million bpd, with China’s economic slowdown impacting oil use, particularly diesel.

OPEC+ postponed a planned output increase to address continued low demand and rising non-OPEC supply.

Meanwhile, OPEC production increased slightly in October, driven by gains in Libya and small overages by Russia and Kazakhstan.

[SLOW] EIA - Crude Oil Outlook

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Oil Prices Steady Near 2-Week Low as OPEC Cuts Demand Forecasts

Oil prices remained near a two-week low following OPEC's downward revision of global demand growth for 2024 and 2025. Brent and WTI crude edged up slightly but stayed close to recent lows. OPEC’s reduced forecast reflects ongoing weak demand from China and a stronger U.S. dollar, which makes oil more expensive abroad. Analysts noted China’s recent stimulus fell short of expectations, adding to concerns over its economic growth. The U.S. dollar's strength and potential new tariffs on Chinese goods under Trump’s administration could further pressure oil demand.

[SLOW] Oil Market - Oil Price

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Dangote Refinery to Export Winter Diesel, Boost Fuel Supply

Nigeria’s Dangote Oil Refinery, now producing 550,000 barrels per day, is set to export winter diesel to Europe and gasoline to West Africa and the Caribbean. Local fuel marketers have agreed to buy gasoline directly from the refinery at lower prices, reducing reliance on imported fuel. This development marks a significant shift in Nigeria’s fuel market.

[SLOW] Trade Flow _ World Monthly Trade Flow (CPP/CHEM, Ocean, by destination countries, Based on Loading date)

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Product Tankers Enter Crude Market Amid Lower LR2 Earnings

With lower earnings in clean petroleum product (CPP) trades, LR2 tankers are increasingly shifting to "dirty" trades, competing in the aframax crude oil market.

According to Sources, around 43% of LR2 tankers are now carrying crude or dirty petroleum products (DPP), while aframax and VLCC tankers are exiting the product market due to low rates.

Rising crude exports from Russia and anticipated U.S. shipments may further impact market dynamics.

Torm and Odfjell shipping companies noted this cross-sector competition has pressured earnings, though Torm expects export volumes to boost demand in the fourth quarter.

[SLOW] LR2 Market Monitor

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John Bassadone Expands Hercules Tanker Fleet with $200M Newbuilding Order

John Bassadone’s Hercules Tanker Management (HTM) has placed an order for up to 10 new ultra-spec chemical tankers at Jiangmen Hangtong Shipbuilding in China.

The order includes six firm units and four options, potentially worth $200 million. These 7,700-dwt IMO II chemical tankers are designed to serve Bassadone's Peninsula operation, with a focus on reducing emissions and enhancing manoeuvrability.

The first units are set for delivery in mid-2024, with the expanded order completing by June 2026. HTM currently operates 44 vessels, including those from Peninsula's fleet.

 [SLOW] Shipyard Analytics

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Term Rates Strengthen as Hafnia Signs $30,000/Day Petronas Charter

Charterers are locking in higher-term rates for product carriers ahead of a strong winter season.

Hafnia’s 50,000-dwt MR tanker, Hafnia Puma, has been chartered to Petronas for two years at $30,000 per day, totaling $21.9 million.

This follows similar deals in the clean tanker sector, with companies like Ardmore Shipping and d’Amico International Shipping also securing profitable contracts.

Rates for longer-term charters have risen recently, signaling a firming market, despite a 16% drop in MR spot rates over the past week.

[SLOW] Flow 

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Vitol Leads as First VLCCs Fix for Shandong Yulong Refinery

VLCC owners have seen new demand from China with the opening of the Shandong Yulong refinery, which received its first crude cargo on November 6.

The Taiwanese-owned Gem No 2, a 302,800-dwt VLCC, was fixed by trader Vitol to deliver Oman crude. The refinery, which began trial operations in late September, has secured at least four VLCCs to bring Middle Eastern and Russian crude.

Despite this boost, China's fiscal stimulus package, announced last week, fell short of market expectations, dampening hopes for an immediate economic recovery.

[SLOW] Flow