2024.12.12

Oil settles up $1 as EU agrees further sanctions threatening Russian oil flows

Oil prices rose by over $1 on Wednesday following the European Union's agreement on a new round of sanctions targeting Russia's "shadow fleet," which has been helping Russia bypass the G7's price cap on seaborne crude oil.

Brent crude futures increased by $1.33 to $73.52 a barrel, while U.S. West Texas Intermediate crude futures rose by $1.70 to $70.29.

Meanwhile, the Energy Information Administration reported larger-than-expected increases in fuel inventories, and OPEC cut its demand growth forecasts for 2024 and 2025 for the fifth consecutive month. Investors are also anticipating a rise in Chinese demand as Beijing plans to boost economic growth.

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OPEC makes fifth and biggest cut to 2024 oil demand growth forecast

OPEC has reduced its 2024 global oil demand growth forecast for the fifth consecutive month, citing bearish third-quarter data. The new forecast predicts a rise of 1.61 million barrels per day (bpd), down from 1.82 million bpd. This 210,000 bpd cut is the largest reduction OPEC has made since August. The downgrade reflects weaker demand from China, India, and other regions. OPEC+ has delayed plans to increase output until April 2025 due to falling prices. The International Energy Agency (IEA) is expected to release updated forecasts soon, with its current estimate for 2024 demand growth at 920,000 bpd.

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US crude stocks fall, fuel inventories rise on robust refining, EIA says

U.S. crude inventories fell by 1.4 million barrels to 422 million barrels for the third consecutive week, according to the Energy Information Administration (EIA). However, fuel stockpiles, including gasoline and distillates, rose significantly due to strong refinery activity. Crude stocks at the Cushing, Oklahoma hub also decreased by 1.3 million barrels. Despite the larger-than-expected build in fuel inventories, Brent and U.S. crude futures remained up on the day. U.S. refinery utilization rates remained robust, though slightly lower than the previous week. U.S. field production of crude reached a record high of 13.6 million barrels per day.

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Nigeria's Dangote Refinery makes first petrol export to Cameroon

Nigeria's Dangote Refinery has made its first petrol export to Cameroon, marking a significant step towards regional energy integration and fuel price stabilization. The 650,000 barrel-per-day refinery, built by billionaire Aliko Dangote, aims to compete with European refiners and transform refined product trading in the Atlantic basin. Cameroon's Neptune Oil highlighted the potential for a reliable supply chain and new opportunities across the region.

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Odfjell goes Christmas shopping with seven tankers and fresh financing

Odfjell, a Bergen-based chemical tanker owner, is acquiring seven vessels, five of which are at a 30% discount to market rates. The company exercised purchase options on four super-segregators and added three more to its fleet. The discounted vessels, built between 2016 and 2020, are valued at $327 million but were bought for approximately $228 million. The acquisitions will be financed through a new $242 million revolving credit facility. Odfjell's CEO, Harald Fotland, highlighted that these deals were negotiated before the recent surge in asset prices, allowing the company to expand its fleet cost-effectively.

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One of the oldest working aframaxes heads for the torch in rare tanker scrapping

The 96,000-dwt Athina I, one of the oldest aframax tankers still in operation, has been sold for scrapping. Built in 1995, the vessel was primarily used as floating storage in the Red Sea. Recently, it changed ownership and flag, now registered under St Kitts and Nevis. The Athina I is the 11th-oldest aframax in the global fleet and the third to be scrapped this year. The ship's sale marks a rare tanker scrapping, with recent prices for scrapping in Bangladesh, India, Pakistan, and Turkey ranging from $320 to $490 per ldt.

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