Oil
Oil Prices Remain Under Pressure As Brent Sells below $72 per barrel
The collapse of the Syrian government prompted the oil markets to look at Middle Eastern geopolitical risks again, but the relatively small volumes directly at risk in Syria means the impact on prices has been limited. ICE Brent continues to linger below $72 per barrel while WTI is trading below $68.59. Low trading liquidity and a lack of tradable fundamental events would most probably steer the markets’ attention to monetary policy, ahead of the US Federal Reserve’s meeting next week.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman defended the ‘flexibility’ of OPEC+ in deferring the unwinding of production cuts, adding that the group understood Q1 2025 would not be a good quarter to bring back volumes.
According to the IAEA, Iran has started to ‘dramatically’ accelerate its enrichment of uranium to up to 60% of purity, reportedly having enough enriched material to be able to make four nuclear weapons soon, just as Iran-EU talks have collapsed.
US oil major Chevron (NYSE:CVX) confirmed it had not held any discussions with the incoming Trump administration on its Venezuelan operations, having ramped up production above 200,000 b/d in recent months, almost 25% of the country’s total.
The outgoing Biden administration launched the first offshore lease sale in the Gulf of Mexico since December 2023, offering a 45-day commenting period on a draft environmental review, however it would be Trump deciding on how much federal acreage would be put on offer.
Leading oil majors Chevron (NYSE:CVX) and Shell (LON:SHEL) are reportedly in negotiations with Argentina’s leading oil firm YPF (NYSE:YPF) to take equity stakes in the 3 billion Vaca Muerta Sur pipeline, sending 500,000 b/d of shale oil to exports.
Chinese automobile sales have risen by almost 17% year-over-year in November, reaching 2.45 million units at their fastest pace since the beginning of the year, as the trade-in opportunities for EVs and hybrids subsidized by the China’s government gather steam.
The last previously unused section of the Power of Siberia 1 gas pipeline began commercial operations this month, allowing midstream firm PipeChina to surpass throughput levels of 31.5 bcm per year and reach the conduits’ designed capacity.
Australia’s national science agency ruled that nuclear energy would not be a cost-effective solution for the country’s energy mix as it takes too long to build, arguing that in the short term solar and wind would be cheaper.
The government of Chile has designated six more sites where private miners would be eligible to extract lithium, in addition to the six already announced, seeking to boost output from the Antofagasta region to complement its efforts via state-owned Codelco.
Norway’s national oil company Equinor (NYSE:EQNR) decided to postpone the start-up of its 220,000 b/d Johan Castberg oil field to January-February 2025 from the end of this year due to adverse weather conditions in the Barents Sea.
Production of ultra-low sulfur diesel soared to 5.153 million b/d in the last weekly data published by the US Energy Information Administration, marking the highest weekly output since January 2019 as diesel cracks remained robust around 15-16 per barrel.
The end of the Assad family’s 53-year rule in Syria has had only minor ramifications on the oil markets, with production in government-controlled regions averaging only 15,000 b/d with most of the country’s output taking place in Kurdish lands.
The International Air Transport Association expected the global aviation industry to generate $36.6 billion next year, up from $31.5 billion in 2024, with newer aircraft offering 10-15% efficiency gains on consumption and lower jet fuel prices easing margin pressures.