Oil prices were moving higher early on Tuesday morning ahead of the latest OPEC+ meeting as members of the group aligned behind plans to extend production cuts into 2025.
– China has already been trading Iranian crude in Chinese yuan, whilst Brazil’s President Lula da Silva proposed creating a common currency in South America last year to reduce reliance on the US dollar.
– The US dollar still accounts for approximately 88% of all trades in the $7.5 trillion-per-day foreign exchange market, with the greenback’s share in global foreign exchange reserves dipping below 60% lately.
– BRICS members control north of 40% of central bank reserves globally, account for approximately 25% of global oil demand, and have been increasingly interdependent in commodity trading as sanctions pushed Russian flows to India.
– US oil major ExxonMobil (NYSE:XOM) is reportedlyseeking to sell its retail business in Singapore worth some $1 billion, only months after it sold its Malaysian oil and gas assets to Petronas.
– French energy major TotalEnergies (NYSE:TTE) is finalizing the acquisition of renewable energy developer VSB Group for approximately $2.1 billion, adding wind and solar generation capacity.
– Spanish oil major Repsol (BME:REP) has agreed to sell all its oil and gas production assets in Colombia to Geopark for $530 million, as part of its drive to garner $4 billion to fund renewable investments.
Anticipating an extension of OPEC+ output cuts into 2025, oil prices have recouped their previous losses and ICE Brent edged closer to $73 per barrel. A slight improvement in Chinese imports, rising to a 5-month high on the back of stronger Russian and Iraqi imports, will also boost the spirits somewhat. Liquidity in futures trading remains thin, suggesting real action would only start after the OPEC+ meeting.
OPEC+ Expected to Roll Over Targets. As Saudi Arabia’s Crown Prince Mohammed bin Salman visitedthe UAE for the first time in three years, OPEC+ seems to be aligning on the extension of its output cuts until the end of Q1 2025, citing high non-OPEC supply and demand concerns.
Threat of Iran Sanctions Disrupts China Trade. A widening of US sanctions on Iranian shipping and the looming threat of tighter enforcement under Donald Trump has notably slowed down trade in Iranian cargoes to China, with NIOC offering fewer cargoes, albeit at a higher price of -$2 per barrel to Brent.
Libya Production Reaches 11-Year High. Bouncing back from a debilitating oil blockade that ended in October, crude and condensate output as reported by Libya’s national oil country rose to 1.4 million b/d across the country, the highest since March 2013, as the country aims to add another 100,000 b/d by year-end.
Norway Cancels Deep-Sea Mining Licensing. The Norwegian government has called off its first deep sea licensing round ever in the first half of 2025 after a left-wing environmentalist party demanded it in return for support for the Labour Party’s next-year budget, although it is likely to be revived soon.
Brazil Kickstarts Huge Exploration Drive. Brazil has announced that it will be offering 91 oil blocks across the country’s main producing basins in its upcoming 2025 licensing round, providing oil drillers with 11 new prospects in the country’s most coveted pre-salt basin.
German Electricity Output Plunges. Dragged lower by a protracted wind lull, Germany’s power generation decreased to its lowest in 7 years last month, averaging 52.3 GW and dropping more than 10 GW compared to the 5-year average, with the country remaining a net importer of electricity.
Namibia Outlook Turns Even Sweeter on Mopane. An appraisal well of Portugal’s state-controlled oil firm Galp Energia (ELI:GALP) confirmed the presence of high-quality light oil and gas condensate in the huge Mopane discovery in offshore Namibia, boosting the company’s upstream outlook.
US Gas Stocks Stand In Contrast to Europe. The US ended its natural gas injection season with the highest level of inventories since 2016, with stocks in the lower 48 states totaling 3,922 Bcf or some 6% above the 2019-2023 five-year average, despite injections being below-average for most of 2024.
US Crude Output Falls Again. According to EIA data, US crude oil production fell by 157,000 b/d month-over-month in September, the largest monthly decline since January largely due to hurricane effects as Hurricanes Francine and Helene prompted offshore producers to shut in production.
Trump to Play Hardball on Crude Imports. As Canada’s Prime Minister Justin Trudeau flew to Mar-a-Lago, media reports have been confirming that US president-elect Donald Trump does not intend to walk back on his promise to slap a 25% import tariff on Canadian oil, some 4.5 million b/d in volume.
China Bans Key Mineral Exports to US. China has banned exports of gallium, germanium, antimony, and superhard minerals to the United States in anticipation of Donald Trump’s tariffs, citing a new Beijing directive on dual-use items that are both for military and civilian use.
India Cancels Windfall Tax on Oil and Products. Implemented since July 2022, the Indian government has canceled its windfall tax on domestic crude production, as well as on exports of jet fuel, petrol, and diesel, saying that lower global oil prices meant there’s little justification for it.
Japan’s US Steel Takeover Looks Ever Less Likely.US President-elect Donald Trump has reiterated his opposition to the planned 15 billion takeover of US Steel (NYSE:X) by Japan’s Nippon Steel, saying that a series of tax incentives and tariffs will reinvigorate domestic steel production.
Oilprice.com