Oil
Demand Concerns Still Weigh on Oil Ahead of Fed Meeting
ICE Brent continues to trade within a narrow range of $72-74 per barrel as the previous week’s slightly bullish sentiment, coming mostly from US and EU sanctions on Russia, has hit another roadblock. It’s China again souring the demand outlook, with November data for industrial output and retail sales both coming in below expectations, so it’s only the Fed that can add some upside now.
According to a Reuters report, the incoming administration of Donald Trump is suggesting the elimination of Biden’s $7,500 tax credit on EVs, easing tailpipe pollution mandates and imposing tariffs on all battery materials globally to kickstart US production.
China’s coal production rose to an average daily rate of 14.27 million tonnes in November, the highest pace on record a whopping 7% month-over-month increase, as state-controlled producers ramped up output ahead of winter heating demand.
Global trading house Trafigura saw a steep decline in its 2024 earnings on the heels of its billion-dollar fraud scheme in Mongolia, posting a 60% year-over-year decline to $2.8 billion even as its traded oil and fuel oil volumes rose to 6.8 million b/d.
As November data for Chinese imports and refinery runs trickled in, China has imported and produced 1.77 million b/d more than it consumed last month, and even accounting for some lacking information this seems to suggest a huge stock build across the country.
In line with OPEC+’s push for stronger discipline in meeting joint production targets, the UAE’s state oil firm ADNOC has pledged to cut exported volumes by up to 230,000 b/d in Q1 2025, mostly cutting flows of light Murban and medium sour Upper Zakum.
Venture Global LNG produced its first commercial LNG from its 20 mtpa Plaquemines plant, the first new US site to produce the super-chilled gas in two years, reaching first production after a mere 30 months since the project was given the go-ahead.
Libya’s state oil company NOC declared force majeure at its 120,000 b/d Zawia refinery after several storage tanks were ‘severely damaged and caught fire’ after direct hits coming from nearby armed clashes, halting operations two months after it was fully repaired.
Serbian authorities said the White House will be slapping sanctions on Serbia’s oil company NIS because of its Russian ownership, potentially disrupting oil flows to the 96,000 b/d Pancevo refinery that is fed through the Croatian port of Omisalj.
Prices for gallium, a rare metal used mostly in semiconductors and radar equipment, have jumped to their highest since 2011 on the back of China’s tightening of export restrictions, selling at $595 per kg, as Beijing still controls 98% of global output.
A Russian oil tanker carrying several thousand tonnes of fuel oil in the Kerch Strait of the Black Sea split apart after running aground, with the 136-metre tanker triggering an oil spill amidst a heavy winter storm that rendered environmental mitigation difficult.
Oman is set to start talks with key investors BP, Shell, and TotalEnergies about whether they could commit gas supplies for a mulled 3.8 mtpa fourth train at the Oman LNG site, seeking to expand the nation’s LNG production capacity to 15.2 mtpa.
Malaysia’s state-owned oil firm Petronas and Italian oil major ENI (BIT:ENI) awarded a $1 billion contract to Korean engineering firm Samsung to build a 650,000 mtpa biorefinery in Johor, Malaysia, focusing mostly on production of SAF and HVO.
US oil major ExxonMobil (NYSE:XOM) announced that it had developed a drilling process to use fluid petroleum coke instead of sand as a proppant for hydraulic fracturing, with the refinery product allegedly improving recovery by up to 15%.