2024.12.19

OPEC+ concerned over US oil growth under Trump

OPEC+ is wary of increased U.S. oil production under Donald Trump, which could erode its market share and complicate efforts to stabilize prices. U.S. output has risen 11% since 2022, and Trump’s plans to deregulate the energy sector may further boost production. While some OPEC+ members see potential benefits in higher U.S. demand, others fear increased competition from U.S. exports. Analysts suggest U.S. production growth will depend on profitability and market conditions, with OPEC forecasting a 2.3% rise next year. This shifting dynamic poses challenges for OPEC+ as U.S. production reshapes the global oil market.

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Saudi Arabia's crude exports hit four-month high in October

Saudi Arabia's crude oil exports reached a four-month high in October, rising by 0.174 million barrels per day (bpd) to 5.925 million bpd, according to the Joint Organizations Data Initiative (JODI). Despite this increase, the kingdom's production slightly decreased to 8.972 million bpd from 8.975 million bpd in September. Refinery throughput also declined, while direct crude burning fell by 156,000 bpd. OPEC+ has extended oil cuts, and despite OPEC revising down its 2024 global demand growth forecast, the International Energy Agency expects the global oil market to be well-supplied by 2025.

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UAE's Fujairah sees lowest November bunker sales in 17 months

Bunker fuel sales at Fujairah, the UAE's key marine fuel hub, dropped to their lowest levels in 17 months in November, impacted by competitive pricing at nearby Khor Fakkan and ongoing geopolitical tensions. Sales totaled 606,042 cubic meters, a 4.6% decrease from October and a 0.7% decline year-on-year, marking a fifth consecutive month of year-over-year declines. Low-sulphur bunker sales rose to 71% of total sales, up from 68% in October, while high-sulphur sales fell 11.8%. The narrowing price difference between low and high-sulphur fuels likely encouraged more uptake of low-sulphur bunkers.

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China’s gasoline exports surge in November ahead of tax rebate cuts

China's gasoline exports soared 42.1% year-on-year in November to 1.26 million metric tons, the highest since August 2023, as exporters rushed to sell ahead of a tax rebate cut from 13% to 9% in December. The reduced rebate is expected to lower export margins by 200-300 yuan per ton, leading to a likely decline in December exports. While gasoline exports surged, diesel exports plummeted 65.9% year-on-year to 400,000 tons, and jet fuel exports dipped 1% to 1.58 million tons, though they rebounded from October’s nine-month low. Overall, refined fuel exports rose 2.8% year-on-year to 5.23 million tons, recovering from an 18-month low in October. Meanwhile, liquefied natural gas (LNG) imports fell 8.7% year-on-year in November but showed a 10.7% increase for the year to date.

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China’s gasoline exports surge in November ahead of tax rebate cuts

China's gasoline exports soared 42.1% year-on-year in November to 1.26 million metric tons, the highest since August 2023, as exporters rushed to sell ahead of a tax rebate cut from 13% to 9% in December. The reduced rebate is expected to lower export margins by 200-300 yuan per ton, leading to a likely decline in December exports. While gasoline exports surged, diesel exports plummeted 65.9% year-on-year to 400,000 tons, and jet fuel exports dipped 1% to 1.58 million tons, though they rebounded from October’s nine-month low. Overall, refined fuel exports rose 2.8% year-on-year to 5.23 million tons, recovering from an 18-month low in October. Meanwhile, liquefied natural gas (LNG) imports fell 8.7% year-on-year in November but showed a 10.7% increase for the year to date.

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Denmark warns of rising tensions as Russia may escort oil tankers through Baltic

Denmark warns that Russia may deploy warships to escort oil tankers through its straits, escalating tensions with NATO. This move could follow recent checks by Northern European nations on Russian tanker insurance, with Denmark playing a key role due to its strategic location. The Danish intelligence report also highlights risks of Russian military exercises, GPS jamming, and confrontational behavior near NATO territories, raising the likelihood of misunderstandings and minor incidents in the Baltic and Arctic regions.

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Veteran tanker values decline as buyer demand weakens

Tanker values, which reached a 15-year high earlier in 2024, have recently dropped due to market uncertainty and elevated secondhand prices. According to Rebecca Galanopoulos of Veson Nautical, large tanker sales slowed significantly, with only 43 deals in the past three months compared to 92 in January. Contributing factors include weak demand from China, uncertainty over the U.S. elections, and falling time charter rates. While values for a 10-year-old VLCC rose 8.9% year-on-year to $84 million, they corrected lower last month across most categories. Suezmaxes were hit hardest, with 20-year-old vessels losing nearly 9% of their value this month. In contrast, the product tanker market is outperforming, driving demand for secondhand MRs. However, sellers are holding firm on prices due to a strengthening freight market, while the emergence of new sales candidates is expected to cap values.

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North Dakota oil recovery slows after October wildfires

North Dakota oil facilities are still recovering from October wildfires that damaged equipment and power lines, causing a 520,000-barrel production drop as operators shut in wells to prevent further harm. The state’s October output fell to 1.178 million barrels per day (bpd) from 1.2 million bpd in September. The rig count remains steady at 37 in December, with expectations to rise to the mid-40s in the coming years. Active hydraulic fracturing crews have decreased from 18 in October to 14 in December. While winter weather has had minimal statewide impact so far, Bakken oil at Clearbrook, Minnesota, is trading at a $1.55 discount to WTI, wider than last month’s 90-cent discount.