Latest news with #non-OPEC+
Yahoo
05-06-2025
- Business
- Yahoo
StanChart: OPEC+ Is About To Become Much More Transparent
A week ago, the 39th OPEC and non-OPEC Ministerial Meeting was held via videoconference, chaired by Prince Abdulaziz bin Salman Al-Saud, Saudi Arabia's Minister of Energy. According to a press release, the group pledged to 'develop a mechanism to assess the maximum sustainable production capacity (MSC) of member countries that will be used as reference for 2027 production baselines'. Whereas the long-term nature of the undertaking elicited little response from oil markets, commodity analysts at Standard Chartered have noted that this is a highly significant development. According to StanChart, establishing MSCs is likely to involve a series of data-related tasks over the next year, a task that's unlikely to prove too difficult. Indeed, the ongoing unwinding of voluntary cuts suggests that the market has tended to overestimate sustainable capacity of some producers and has, therefore, frequently overestimated spare capacity. StanChart says setting MSC levels will improve the visibility and transparency of member countries, making it much harder for some OPEC+ members to obfuscate the degree of their non-compliance with their pledges by creating opaque data flows and vague (or shifting) definitions. This move will give more accurate production data thus reducing oil price second key OPEC+ decision came on 31 May, with Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman agreeing to continue the accelerated unwinding of the 2023 production cuts by 411kb/d in July 2025. July's accelerated clip was similar to that for the previous two months. Previous media reports had warned that the group might decide to unwind more than 411kb/d if the worst overproducers (Kazakhstan and Iraq) continued to defy calls to stick to their quotas. However, an Algerian government press release revealed that no such discussion took place. And now StanChart says that oil markets are likely to remain relatively well balanced for the remainder of the year--if OPEC+ sticks to its current trajectory. According to the analysts, current balances imply a global stock draw of 0.4 mb/d in the third quarter, which will be offset by a 0.4 mb/d inventory build in the final quarter of the year. Contributing to the balance will be the continuation of significant non-OPEC+ supply underperformance relative to consensus expectations in 2025, coupled with relatively robust demand growth which is expected to clock in at 1.17 mb/d in 2025 and 1.07 mb/d in 2026. Meanwhile, current low prices are likely to create some additional potential demand upside. Looking at natural gas markets, the ongoing seasonal build in EU gas inventories accelerated sharply over the past week. According to Gas Infrastructure Europe (GIE) data, EU gas inventories clocked in at 56.79 billion cubic metres (bcm) on 1 June, good for a w/w build of 3.057 bcm. This marked the first time the w/w net injection exceeded 3 bcm since August 2022, with last week's build nearly 50% above the previous week's mark and 24% higher than the five-year average. The faster-than-average build has trimmed the y/y deficit to 24.44 bcm, lower than the 30.07 bcm deficit reached in mid-April. Natural gas prices have failed to sustain the momentum they built in the first three weeks of May: Dutch Title Transfer Facility (TTF) gas for July delivery settled at EUR 35.015 per megawatt hour (MWh) on 2 June, good for a w/w fall of EUR 2.354/MWh. Europe's gas prices have underperformed other energy prices in the year-to-date, by a significant margin. The latest Energy Information Administration (EIA) weekly release was bullish, with the deficit in combined crude oil and oil product inventories relative to the five-year average widening by 7.04 mb w/w to 47.76 mb--the largest since December 2022. Crude oil inventories fell 2.8 mb w/w to 440.36 mb, with inventories now 30.22mb below the five-year average. Meanwhile, U.S. crude exports fell 794 kb/d w/w, tempered by a counter-seasonal 162 kb/d fall in crude oil refinery runs as well as a 262 kb/d increase in imports. However, demand indicators for the month of May were weak, with gasoline demand down 4.8% y/y, jet fuel demand down 0.4% and distillate demand down 1.4%. The U.S. oil rig count declined by four w/w to a 42-month low of 461, marking a fifth consecutive weekly decline according to the latest Baker-Hughes survey. The Permian Basin rig count fell by one to a 42-month low of 278; the Midland Basin rig count fell by one to 98, Delaware Basin activity remained unchanged at 157 rigs, and other Permian drilling was unchanged at 23 rigs. In contrast, the U.S. gas rig count climbed by a single rig w/w to 99. By Alex Kimani for More Top Reads From this article on Sign in to access your portfolio
International Business Times
28-05-2025
- Business
- International Business Times
Oil Prices Rise Amid North American Supply Disruptions and OPEC+ Uncertainty
Oil prices edged up on Wednesday as the possibility of supply disruptions prompted by North America production losses provided some support amid expectations OPEC+ producers will stick to agreed output reductions. Brent crude rose 54 cents, or 0.8 percent, to $64.63 a barrel. U.S. West Texas Intermediate (WTI) rose 64 cents, or 0.9%, to $61.45 a barrel. There were several factors contributing to the rise in prices. A major development was the U.S. decision to halt Chevron from exporting Venezuelan crude oil. While Chevron can continue operations in Venezuela, it is now prohibited from exporting oil out of the country or expanding its activities. This move limits supply options for U.S. refiners seeking crude and adds pressure to the global market, which is already facing constraints. And in Canada, wildfires in Alberta led to brief shutdowns of oil and gas production facilities. The fires have forced evacuations from parts of oil operations and are helping to reduce output and tighten supply. The threat from the wildfires underscores the current exposure of the country's energy infrastructure to natural disaster. Behind all this, oil traders are navigating the swirling forces of the organization of the Petroleum Exporting Countries and its allied producer countries, collectively referred to as OPEC+. The group is supposed to meet this week. No immediate decision is expected at Wednesday's full-group meeting, though the broader coalition may hold another meeting on Saturday in a smaller format of just eight member nations to decide whether to boost production next month. OPEC+ will be under pressure to step up supply, industry analysts say. The demand picture is looking up, particularly with the summer driving season around the corner for several countries. Meanwhile, non-OPEC+ production has been stagnant in the first half of the year. Added to the Canadian supply risk, the cry for more production is rising. But some analysts are skeptical. Market analysts say the group is likely to raise production in July but may reconsider as the year goes on as the outlook for the world economy darkens and potential new supplies enter the market. There is also the unknown impact of geopolitics. Continuing strains between the U.S. and Iran have been keeping sentiment in check. If nuclear negotiations between the two countries falter, sanctions on Iranian oil exports would remain in a position to restrict global supply further. With all of these factors in consideration, oil markets continue to be volatile.
Time of India
21-05-2025
- Business
- Time of India
India's coal demand to rise 60% by 2050; oil, petrochemical imports to remain high: S&P
New Delhi: India's coal demand is projected to rise by around 60 per cent by 2050, and the country will continue to rely on imported oil, gas, and coal despite expanding domestic production, according to S&P Global Commodity Insights. India's growing energy requirements come at a time when global oil markets are facing weak fundamentals in 2025 due to sluggish demand and rising supply from both OPEC+ and non-OPEC+ producers. Pulkit Agarwal, Head of India Content (Cross Commodities), S&P Global Commodity Insights, said, 'Global oil prices have lost some shine in 2025 year-to-date on the back of a challenging demand environment exacerbated by supply growth from OPEC+ as well as beyond. On the demand side, while the absence of Chinese demand growth continues to be felt, as the market continues to look for a demand growth leader, trade and tariff issues are resulting in uncertainties regarding pace of economic and hence oil demand growth.' 'For India, oil demand continues to grow helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets,' he added. Gauri Jauhar, Executive Director, Energy Transition & Cleantech Consulting, S&P Global Commodity Insights, said, 'India is riding the global energy transition wave, while navigating the energy demand of economic ascent, an urban surge and contending with high pollution levels.' 'Facing the energy trilemma requires the India energy system to solve for energy accessibility, affordability, and security while transitioning. Energy security considerations run through oil, gas, and coal with India importing ~87% of oil, ~50% of gas, and ~26% of coal in 2024,' she said. As per S&P Global's base case, fossil fuels remain foundational, with only a slight decline by 2050. In an accelerated greening scenario, the share of fossil fuels could decline to 33 per cent by 2050. In a more challenged global scenario called Discord, fossil fuels would remain at 77 per cent of the primary energy mix by 2050, with coal supplying just over 50 per cent. Pritish Raj, Managing Editor for Asia Thermal Coal, S&P Global Commodity Insights, said, 'India's coal demand is expected to rise around 60% by 2050, and most of the incremental demand will be met by domestic supply.' 'Despite being one of the world's largest producers of coal, India has gaps in the quality and availability of domestic coal. As per S&P Commodity Insights' outlook, India's dependence on imported coal is expected to continue, with mid-term 2030 outlook projections at about 250 million tons by 2030, and thermal coal imports in the range of 150-180 million mt,' he added. 'While the share of coal in the power mix may go down from current over 70% to 66% by 2030, in terms of generation share it'll rise. We estimate that number to be around 1600 TWh by 2030 that's going to come from coal,' he said. The share of solar-based power in India's generation mix is expected to rise from 8.54 per cent in 2024 to 14.58 per cent by 2030. Stuti Chawla, Associate Director, India and Middle East Chemicals Pricing, S&P Global Commodity Insights, said, 'India's petrochemical demand is likely to outpace GDP growth in 2025-26 (Apr-Mar), despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns.' 'Chemical producers in India are looking at diversifying into specialty chemicals as well as upstream and downstream integration to compete with the onslaught of cheaper imports and maintain a stronghold in the domestic market,' she added
The Hindu
20-05-2025
- Business
- The Hindu
The ongoing oil price tensions
Just when you had your surfeit of headlines screaming of blood and gore, come the drumbeats of a new conflict. However, in this new one, the belligerents do not swap bullets but barrels. Yet, this incipient conflict is shaping to be a 'mother of all battles' perhaps with a more universal impact than the destruction being wrecked in various corners of the world. This prognosis may surprise observers who not only missed the weeks of its run-up skirmishes but also the bugle of war, when on May 3, the Organization of the Petroleum Exporting Countries Plus (OPEC+) decided to go ahead with a collective output increase of 4,11,000 barrels per day (bpd) from next month (June). This was the third month in a row that the oil cartel decided to raise crude production, cumulatively undoing the 9,60,000 bpd or nearly half of the 2.2 million bpd 'voluntary' output cuts eight of its members undertook in 2023, to increase global oil prices in an oversupplied market. There are hints that the full 2.2 million bpd cut would be unwound by October 2025. Though the announced production rise was less than half a per cent of global daily production, the oil market was so jittery that the Brent crude price plummeted by almost 2% to $60.23/barrel, the lowest since the pandemic. It has since recovered to $65/barrel with support from the U.S.-China stopgap trade deal and reports of stalemate in the U.S.-Iran nuclear talks. Saudi's strategy The oil market is still gutted and crude price is nowhere near the triple dollar mark that OPEC+ aimed for. Why, then, has this 23-member producer clique decided to reverse its tactic from reducing supplies to raising production? To find the reasons, we need to deep dive into the oil market of the post-COVID era. Despite the expectation of a quick turnaround, global post-COVID economic recovery was mostly K-shaped leading to an anaemic growth in oil demand. Meanwhile, oil producers were desperate to ramp up their outputs to make up for lost revenue. It also did not help that several new producers, from the Shale oilers to non-OPEC+ countries, such as Brazil and Guyana, also wanted a piece of the shrunken demand. To square the circle, OPEC+ decided to take a collective production cut of five million bpd, nearly 10% of its total pre-pandemic output. When even this move did not shore up the oil price, a further 'voluntary' cut of 2.2 million bpd was taken by eight members. This rope trick also failed to raise oil prices which continued to slide downwards. While these processes were ongoing, Saudi Arabia, OPEC+'s largest producer, which took nearly three million bpd or 40% of the total production cuts, got increasingly infuriated by endemic OPEC+ overproducers, such as Kazakhstan, Iraq, the UAE and Nigeria. The Kingdom, often called a 'swing producer' for its large spare production capacity, prefers stable and moderately high oil prices to ensure a steady oil revenue. However, it has made exceptions in 1985-86, 1998, 2014-16, and 2020 to pursue a market share chasing strategy to punish perceived overproducers. In the past, this market flooding strategy of Saudi enabled Riyadh to eventually impose production discipline among its peers, allowing prices to return to Riyadh's desired levels. Now, when repeated pleas failed to stop overproducers, and when Saudi Arabia's average production fell below nine million bpd in 2024, its lowest level since 2011, Riyadh decided to repeat the playbook: an oil price war in the guise of accelerated restoration of voluntary production cuts. An oversupplied oil market However, many observers are less sanguine about the outcome of the Saudi campaign this time owing to several unique and different fundamentals. To begin with, this time the Saudis do not have the usual deep pockets needed to prevail. The oil market is more fragmented with large flocks of freelancing producers. High Capex has been sunk in ultra-deep offshore fields and other difficult geographies which need recovering, even at marginal costs, to avoid adverse political and economic consequences. Moreover, the crude exports by major oil producers such as Russia, Iran and Venezuela are currently hobbled by U.S. economic sanctions which may not last long. The global oil demand is approaching a plateau and the International Energy Agency (IEA) expects it to grow only by 0.73% in 2025 despite sharply lower prices. The controversial 'peak demand' theory does not appear as outlandish now as it did only two years ago when the IEA predicted that global oil consumption would peak before 2030. The signs in that direction are ubiquitous — from the global economic slowdown to the growing popularity of non-internal combustion engine vehicles, particularly in China, the largest oil importer, and growing climate change mitigation. These pessimistic projections are likely to be further compounded by the huge disruption unleashed by U.S. President Trump's tariff war. The S&P Global agency lowered its global GDP forecasts to 2.2% for 2025 and 2.4% for 2026 — historically weak levels since the 2008-09 recession except for the pandemic period. The World Trade Organization recently predicted a 0.2% annual decline in world trade in 2025 unless other influences intervene. The aforementioned bearish factors can create an inelastic situation causing oil prices to not return to previous levels even after supply-side impetuses are reversed. All this background begets the question: why has Riyadh picked this moment to unleash the oil war? To some observers, the likely rationale lies in a mix of economic and political factors. To begin with, faced with the inevitable long-term prospects of a buyers' market for the foreseeable future, Saudi Arabia may be trying to frontload and maximise their oil revenue. They may also be aiming at positioning themselves at the lower end of the oil price spectrum in anticipation of sanctions being removed from Iran, Russia and Venezuela, three of the biggest producers as well as the full rollout of Mr. Trump's 'Drill, Baby, Drill' campaign. Last, but not least, the move was probably intended as a curtain raiser for President Trump's high-profile state visit to the Kingdom with Al-Saud wishing to be seen as heeding Mr. Trump's call for lower oil prices to help contain U.S. domestic inflation despite his higher import tariffs hurting consumers. With defence guarantees, a nuclear agreement and over $100 billion in American weapon sales lined up, the Saudis have a lot to gain from the U.S. President's successful visit. The impact on India Although the low-intensity oil war may not hit the headlines the way shooting wars do, it is arguably far more consequential. It is particularly true for India, the world's third-largest crude importer, which shelled out $137 billion in 2024-25 for crude. India's crude demand rose by 3.2% or nearly four times the global growth. A U.S. study last year predicted that in 2025, nearly a quarter of global crude consumption growth would come from India. Even further down the line, India's oil demand is widely expected to be the single largest driver for the commodity till 2040. Consequently, although we may not be a combatant in the oil war, we have high stakes, with a one-dollar decline in oil price yielding an annual saving of roughly $1.5 billion. While the downward drift of crude prices in the short run due to the ongoing 'oil war' may be in our interest, the picture is not entirely linear. Lower oil revenue hurts our economic interests in several ways. It causes a general economic decline of oil exporters which are among our largest economic partners, affecting bilateral trade, project exports, inbound investments and tourism. Lower crude prices also affect the value of our refined petroleum exports, often the largest item in our export basket, and could push down refinery margins. Moreover, the lower unit price of oil and gas reduces our pro rata tax revenues. The Gulf economies sustain over nine million of our expatriates, many of whom may lose their jobs. Their annual remittances, estimated at over $50 billion, may suffer, hurting our balance of payments. Irrespective of the outcome of the ongoing oil war, unless we find a new set of drivers to replace hydrocarbons, the lower synergy may become the 'new normal' across the Arabian Sea. Mahesh Sachdev, retired Indian Ambassador, focusses on the Arab world and oil issues. He is currently president of Eco-Diplomacy and Strategies, New Delhi.
Jordan News
14-05-2025
- Business
- Jordan News
OPEC Expects Slower Growth in Oil Supply from Rivals in 2025 Following Price Drop - Jordan News
OPEC Expects Slower Growth in Oil Supply from Rivals in 2025 Following Price Drop The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday revised down its forecast for oil supply growth from the United States and other non-OPEC+ producers for this year, citing an expected decline in capital spending due to falling oil prices. اضافة اعلان In its monthly report, OPEC stated that supply from countries outside the Declaration of Cooperation — the official name for the OPEC+ alliance — is projected to increase by around 800,000 barrels per day in 2025, down from last month's forecast of 900,000 barrels per day. A slowdown in supply growth from outside OPEC+, which includes OPEC, Russia, and other allies, would make it easier for the group to balance the global oil market. The rapid growth of U.S. shale oil and production from other countries has impacted prices over the past few years. OPEC left its forecast for global oil demand growth unchanged for both 2025 and 2026, following a downward revision last month. The organization cited the impact of first-quarter demand data and the influence of tariffs. Reuters
