Oil Prices Under Pressure as Supply Disruptions Fail to Materialize

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The oil market was on a knife’s edge all weekend and early this week, with traders awaiting Israel’s riposte vis-à-vis Iran, but when no major supply disruption came, both WTI and Brent fell, with Brent breaking below $78.

If there is no large-scale strike on Iranian oil infrastructure, prices could fall even further, with Libyan supply coming back online and Chinese demand yet to materialize.

According to Kpler data, China’s crude oil imports averaged only 10.8 million b/d in September, a more than 500,000 b/d decline compared to August numbers, indicating that even the promise of economic stimulus did not lift the country’s buying activity, OilPrice.com reports.

One of Europe’s most ambitious hydrogen infrastructure projects, the cross-border pipeline between Denmark and Germany, has been postponed by three years to 2031, with seemingly little industry interest to book term capacity.

According to Guyanese government agencies, a total of 27 bidders have applied to market Guyana’s share of crude oil produced at the ExxonMobil-operated Stabroek block, equivalent to 33 shipments per year, pitting Exxon, Chevron, BP and Total against one another.

Libya’s production rates are recovering after the month-long oil blockade, with current output nearing the 1.2 million b/d peak production level as Bloomberg reported that most of shut-in wells have been restarted and production hit 1.067 million b/d.

Norway’s 2025 budget shed light on the country’s runaway project costs as the upcoming Johan Castberg project is now expected to cost $8.1 billion compared to its initial assessment of $4.6 billion, whilst Aker BP’s Yggdrasil skyrocketed to $12.6 billion.

Even though the upstream impact of Hurricane Milton is expected to be less than that of Francine and Helene, US major Chevron (NYSE:CVX) has pre-emptively shut its 65,000 b/d Blind Faith platform some 150 miles southeast of New Orleans.

Prompted by low lithium prices, Australia’s mining major Rio Tinto (NYSE:RIO) has approached lithium producer Arcadium Lithium (NYSE:ALTM), itself the result of the recent Allkem-Livent merger, in a deal that could be valued between $4 and $6 billion.

US oil major Chevron (NYSE:CVX) agreed to sell its assets in Canada’s Athabasca Oil Sands and Duvernay Shale to Calgary-based Canadian Natural Resources (TSO:CNQ) for $6.5 billion, shedding assets that produced some 84,000 b/d of oil equivalent in 2023.

Partnering up with Brazilian offshore specialist Petrobras (NYSE:PBR), Colombia’s state oil firm Ecopetrol (NYSE:EC) announced the discovery of a giant 6 TCf gas field with its Sirius-2 well, more than doubling the nation’s 2.4 TCf current reserves.
According to US BTS data, the consumption of jet fuel by US airlines in August rose to the highest for the month in 23 years, a total of 1.69 billion gallons that is 1% higher than last year’s tally, with average jet fuel costs averaging $2.47 per gallon over the month.

The government of Panama is set to decide on the future of the giant Cobre Panama copper field next year, with the project equivalent to 5% of global production before its forced shutdown, after the Supreme Court ruled that First Quantum’s contract was unconstitutional.

The Central Asian nation of Kazakhstan held a referendum on the construction of nuclear power plants in the country, and with 71% of the electorate voting affirmatively, the world’s largest uranium miner should soon start working on new capacity.

The Russian government has held preliminary negotiations with its oil companies to decide whether firms that do not produce diesel should be banned from exporting middle distillates, with diesel exports averaging 920,000 b/d so far in 2024.