Oil prices under pressure ahead of OPEC+ meeting

Oil prices were under pressure again early Tuesday morning, with Brent falling below $71 and WTI trading at $67.57. Oil markets will now turn to tomorrow’s OPEC+ meeting for some support, as well as any developments in the Middle East following Israel’s ground invasion of Lebanon.

– Europe is bracing for a colder winter this year as forecasters see an 80-85% chance of La Niña developing, bringing colder weather to the Atlantic Coast as soon as October.

– According to forecasters, France, the UK and Scandinavia will be the coldest parts of Europe this month, while the Eastern Mediterranean will continue to see extreme heat, above 90°F.

– European gas stocks are now 94% full, with Denmark the only country with stocks below 70%, while the UK may need to step up its LNG purchases from the US as the stock rate is 57%.

– The prospect of cooler weather has started to push TTF futures higher, with the November contract currently trading at €38 per MWh ($13.5 per mmBtu), just as LNG imports from the Old Continent fell to the lowest level this year, registering 6.4 million tons in September.

Market movers

– Private US shale producer Validus has agreed to buy rival Citizen Energy in a deal worth more than $2 billion, including debt, marking another episode of consolidation in the US upstream sector.

– Refinement of renewable fuels Vertex Energy (NASDAQ:VTNR) has filed for bankruptcy and is exploring a sale, prompted by a failed foray into biodiesel at its 75,000 bpd refinery in Mobile, Alabama.

– China’s Guangdong Energy Group is to commission a new USD 1 billion LNG import terminal in Huizhou, Guangdong Province, with a capacity of 4 mtpa, with ExxonMobil (NYSE:XOM) ensuring access for 20 years.

Tuesday, October 01, 2024

OPEC+ faces an uphill battle as its ministerial panel is set to meet on October 2 to discuss the current state of oil markets. Brent futures fell to $71 a barrel on news that Libya’s eastern government may lift its oil embargo, on fears that a higher supply of crude would outweigh positive stimulus developments in China.

Summer US oil demand surprises upward. According to EIA data, US oil demand rose in July to the highest seasonal level since 2019, rising 1.2% from June to a total of 20.48 million b/d, driven by a post-pandemic peak of jet fuel demand and seasonal gasoline peaks. and diesel.

Mexico delivers first export LNG cargo. American LNG developer The New Citadel Energy (NASDAQ:NFE) delivered Mexico’s first liquefied gas export from its 1.4 mtpa Altamira plant, with the carrier Energos Princess sailing to an as-yet-unknown European destination.

Libya agrees to new terms for central banks. Libya’s eastern government based in Benghazi agreed earlier this week to approve the appointment of Naji Mohamed Issa Belqasem as central bank governor, potentially paving the way for the gradual lifting of the oil embargo that is still in place.

Siemens is getting too competitive. The US Department of Justice has fined the US subsidiary of German industrial giant Siemens Energy $104 million for allegedly misappropriating confidential information from GE and Mitsubishi Heavy Industries to win a bidding process for a gas turbine plant in Virginia .

OPEC members fight over disputed islands. Two African OPEC members, Gabon and Equatorial Guinea, have launched legal proceedings at the International Court of Justice over the maritime delimitation of two small islands in the Gulf of Guinea, Cocotier and Congo, believed to contain untapped oil reserves.

Iron ore rises for easier Chinese house buying. Iron ore futures rose more than 10 percent this week after Shanghai, Guangzhou and Shenzhen eased rules on home purchases, including lower down payment rates and looser mortgage refinancing rates, sending prices benchmark from Singapore at $110 per metric ton.

The battle is on for Citgo Assets. Amber Energy, a subsidiary of private equity group Elliott Investment Management, has been selected as the top bidder in an auction for Venezuelan-owned US refiner Citgo with a bid of $7.286 billion, expecting to retain the brand and to complete the transaction by the middle of the month. 2025.

French Major Eyes Pioneering project in Suriname. France’s energy major TotalEnergies (NYSE:TTE) is set to break ground on Suriname’s first offshore project, the $10 billion Gran Morgu development, located in Block 58, approximately 140 km offshore, exploiting approximately 700 million barrels of oil equivalent.

Japan wants non-destination LNG deals. Japanese LNG importers have asked the Tokyo government to help negotiate better terms for long-term supply deals, possibly removing strict destination clauses on Qatari exports, as the latter’s recent terms are seen as with Germany they are more flexible.

Britain becomes the first G7 nation to completely ditch coal. The country that industrialized coal, the UK closed its last coal-fired thermal power station in Ratcliffe-on-Soar this week, becoming the first G7 country to move away from coal-fired power and ending more than 140 years of coal production in the country.

Israel attacks Yemen’s key port. Israel attacked oil storage facilities and energy infrastructure in Yemen’s Red Sea ports of Hodeidah and Ras Isa a day after Israel assassinated Hezbollah leader Hassan Nasrallah, raising geopolitical risks of further escalation in the Middle East.

White House ramps up SPR purchases ahead of election. The US Department of Energy has bought 6 million barrels of oil for the Strategic Petroleum Reserve for delivery by May 2025, more than half coming from ExxonMobil (NYSE:XOM) as well as smaller volumes coming from Shell and Macquarie.

Australia cuts Met Coke outlook for 2024-2025. Australia cut its forecast metallurgical coal exports for 2024-25 by 6% to 161 million tonnes, down 9 million tonnes from the previous forecast, sending Australian coking coal prices higher as they gained $30 per metric ton last week and rose above $230/ mt.

By Michael Kern for Oilprice.com

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