2024.12.26

Oil Prices Rise 1% Amid Pre-Holiday Thin Trading and Supply Optimism

Oil prices climbed over 1% on Tuesday, with Brent crude settling at $73.58 and WTI at $70.10, as thin holiday trading and expectations of tightening supplies supported the market. Analysts anticipate price fluctuations during the holiday season due to reduced market activity.

Factors boosting prices include expectations of declining U.S. crude and distillate stocks, China's fiscal stimulus plans to inject $411 billion into its economy, and indications of stronger oil demand in early 2024.

While U.S. consumer confidence weakened, strong capital goods orders and home sales point to a resilient economy, adding to market optimism. However, gasoline stocks were seen rising, which could temper bullish sentiment. Official U.S. inventory data is expected Friday, with markets closed on Dec. 25 for Christmas.

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Indian Refiners Turn to Middle East Amid Russian Oil Shortage

Indian state refiners are considering Middle Eastern crude to replace an 8-10 million barrel shortfall in Russian oil caused by rising domestic demand in Russia, OPEC commitments, and limited spot sales.

Reliance on Russian oil, which makes up over a third of India's imports, faces challenges, prompting refiners to tap inventories or issue tenders for alternatives.

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Volunteers Plead for Putin's Aid in Black Sea Oil Spill Crisis

Volunteers cleaning up a major oil spill along Russia's Black Sea coast have appealed to President Putin for urgent federal assistance, stating that local authorities lack the resources to handle the disaster. The spill, caused by two ageing tankers damaged in a Dec. 15 storm, has devastated wildlife and polluted beaches near Anapa.

While over 10,000 people are involved in the cleanup, volunteers say the scale of the crisis demands professional expertise, pollution specialists, and international aid. The spill continues to affect 40 km of coastline, with oil still leaking and weather conditions hampering efforts.

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Mexico's Oil and Gas Output Hits Annual Low in November

Mexico's oil and gas production in November fell to its lowest levels of the year, with liquid hydrocarbons at 1.747 million barrels per day (bpd) and natural gas at 3.531 billion cubic feet per day. This marked the second consecutive month Mexico missed its 1.8 million bpd target, a goal set by President Claudia Sheinbaum.

State-owned Pemex, responsible for over 90% of production, continues to face challenges despite substantial government support, with output far below its peak two decades ago. Concerns mount that without significant investment, Mexico may need to import crude to sustain its refineries in the coming years. While President Sheinbaum advocates for renewable energy, plans to address Pemex's struggles or reduce reliance on fossil fuels remain unclear.

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Russia Offers Multiple Gas Supply Routes as Ukraine Transit Deal Ends

Russia is prepared to continue gas exports to Europe through alternative routes, including TurkStream and LNG shipments, as the Ukraine transit deal nears expiration. Deputy Prime Minister Alexander Novak emphasized Russia's willingness to maintain supplies, contingent on agreements between Kyiv and the EU.

The end of the Ukraine route raises concerns for countries like Slovakia, which heavily depends on Russian gas, especially amid colder weather forecasts and tight global markets for liquefied natural gas (LNG).

In 2023, Russia exported over 50 billion cubic meters of gas to Europe, with Novak highlighting its competitive pricing and logistical advantages. President Putin has also expressed readiness to use the Nord Stream pipeline for gas supplies, despite its controversial history.

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Italy’s Marnavi Orders $60M Chemical Tankers from China

Naples-based Marnavi has signed a $60 million contract for two 13,000-dwt stainless steel chemical tankers, marking its first order in China since 2017. The vessels, costing $30 million each, will be built in Zhoushan and are scheduled for delivery by late 2026 or early 2027.

Ievoli last ordered tankers in China at Wuchang Shipbuilding in 2017.

That involved an order for two chemical tankers although only one was delivered, the 15,000 dwt Rita Ievoli (built 2023).

Marnavi, which operates a fleet of 36 vessels including chemical parcel tankers and offshore ships, is also a major stakeholder in Next Geosolutions. The offshore company recently acquired the multipurpose survey vessel Sea Admiral for $7 million, with plans to invest up to €5 million in upgrades. Next Geosolutions is listed on Euronext Growth Milan, supporting its expansion in offshore services.

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