2024.12.13

Oil Prices Hold Steady Amid IEA Surplus Forecast and Fed Rate Cut Optimism

Oil prices ended Thursday nearly unchanged, balancing concerns over a potential supply surplus with optimism about a Federal Reserve rate cut. Brent crude fell by 0.15% to $73.41 a barrel, while WTI dropped 0.38% to $70.02.The International Energy Agency (IEA) revised its 2025 oil demand growth forecast upward but maintained its view of ample supply, even as global oil inventories fell by 39.3 million barrels in October due to rising demand and lower refinery activity. Meanwhile, OPEC cut its 2024 demand growth projection for the fifth consecutive month.In the U.S., inflation rose slightly in November, reinforcing expectations of a Fed rate cut that could boost economic growth and energy demand. Gasoline and distillate inventories also rose more than expected.China's crude imports surged 14% in November year-over-year, marking the first annual growth in seven months. In the Middle East, Iran agreed to stricter nuclear monitoring, influencing market sentiment. Despite slower-than-expected global demand growth in December, resilience in consumption was noted.

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Canadian Oil Producers Forecast Rising Output in 2025 Amid Resilient Demand

Canada’s top oil producers, including Suncor Energy, Cenovus Energy, and Imperial Oil, project higher crude output for 2025, driven by robust demand in U.S. and international markets. Suncor expects production to rise by 4.4%, while Cenovus and Imperial Oil forecast increases of 4.4% and 3.1%, respectively.The U.S., the largest market for Canadian crude, is anticipated to see increased fuel demand due to lower borrowing rates supporting industrial activity. However, potential U.S. tariffs on Canadian goods under President Donald Trump's administration could impact exports.The Trans Mountain pipeline expansion, operational earlier this year, has boosted Canadian crude prices and improved access to Asian and U.S. West Coast markets.Suncor also predicts a slight increase in refinery throughput and plans a 3% reduction in capital spending for 2025. Imperial Oil, meanwhile, plans higher capital expenditures, focusing on multi-year projects and additional drilling.Shares of major producers, however, saw slight declines, reflecting broader market dynamics and cautious investor sentiment.

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Rosneft and Reliance Sign $13 Billion Oil Deal

Rosneft will supply 500,000 bpd of crude to Reliance Industries under a 10-year, $13 billion annual deal, marking the largest energy agreement between India and Russia. The deal strengthens India-Russia ties as India benefits from discounted Russian oil amid Western sanctions, challenging Middle Eastern competitors. Deliveries start in January, with annual reviews for pricing and volumes.

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Saudi Oil Supply to China Set to Rebound in January

Saudi Arabia's crude oil shipments to China will rise to 46 million barrels in January, the highest since October, driven by price cuts from Saudi Aramco. This marks a significant increase from December's 36.5 million barrels.

Chinese refiners, including state-owned Sinopec and PetroChina and private firms Rongsheng and Shenghong, are boosting Saudi crude purchases following two consecutive months of price reductions. The flagship Arab Light crude’s price for Asia has been cut to a four-year low.

The rebound comes as tighter Iranian oil supplies and higher prices prompt Chinese refiners to seek alternative Middle Eastern sources.

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DHT Holdings Sells Oldest Tanker for $43.4 Million Windfall

DHT Holdings has sold its oldest VLCC, the DHT Scandinavia (built 2006), for $43.4 million, surpassing its $41.8 million valuation. With no debt tied to the vessel, the proceeds will support general corporate purposes.

The sale aligns with DHT's strategy to lower its fleet’s average age and enhance fuel efficiency under standards like the Carbon Intensity Index (CII). This reduces the fleet to 23 VLCCs, but DHT has four 320,000-dwt newbuildings scheduled for delivery in 2026 from South Korean yards.

CEO Svein Moxnes Harfjeld hinted at this strategy during a November earnings call, noting that older ships in good condition and low debt could generate meaningful returns if sold. The proceeds may support funding for newbuilds or other corporate opportunities

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Lomar Partners with Mythos AI to Advance Autonomous Ship Navigation

Lomar’s technology arm, Lomarlabs, has joined forces with U.S.-based Mythos AI to pilot autonomous navigation systems aboard Lomar’s fleet. This partnership aims to revolutionize maritime safety and efficiency through cutting-edge AI-driven technologies.

Mythos AI, founded by Silicon Valley engineers, has already developed Archie, an unmanned survey vessel equipped with advanced autonomy for congested waterways. With access to Lomar’s ships, the company will test its innovative systems, enhancing navigation officers' capabilities, route optimization, and real-time situational awareness.

The collaboration aligns with the International Maritime Organization's 2025 goal of adopting the Maritime Autonomous Surface Ships Code, emphasizing safety and sustainability in shipping. Lomar CEO Nicholas Georgiou highlighted the partnership’s potential to position the company at the forefront of maritime innovation.