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Oil markets are fully focused on this Sunday’s OPEC+ meeting after top officials from the three biggest producers in the alliance met on Tuesday.
– European gas prices have surged almost 45% this year and forecasts for cold weather threaten to add pressures on gas supply, further aggravated by US sanctions on Gazprom’s very own banking subsidiary, Gazprombank.
– For most of November temperatures in Northwest Europe have been trending along the 30-year average line or below, marking the first cold winter since 2021, and leading to gas inventories draws to 87.7% of capacity.
– There is very limited LNG supply capacity increases coming this winter, mostly from Plaquemines in the US, however production disruptions across the globe could offset those increments, with Woodside halting LNG liftings from Australia’s Pluto due to an unplanned outage.
– Front-month TTF natural gas prices reached their highest in a year on 21 November, reaching €48.3 per MWh (equivalent to $16.1 per mmBtu), whilst JKM lagged behind European prices, pricing only slightly above $15 per mmBtu.
Market Movers
– US midstream major ONEOK (NYSE:OKE) signed an agreement to purchase all remaining publicly held units of EnLink Midstream in a $4.3 billion transaction, boosting its 50,000-mile pipeline network.
– The US’ leading natural gas producer EQT (NYSE:EQT) will be forming a JV with US investment firm Blackstone, with the latter getting a stake in the Mountain Valley Pipeline in return for $3.5 billion in cash.
– Mining major AngloAmerican (LON:AAL) agreed to sell its remaining coking coal mines in Australia to Peabody Energy (NYSE:BTU) for up to $3.78 billion in cash, as part of its large-scale divestment drive.
Tuesday, November 26, 2024
A potential Israel-Lebanon ceasefire deal is looming large on the geopolitical front, but as we get closer to December 1, OPEC+ is becoming the main focus of oil markets. After the energy ministers of Saudi Arabia, Russia, and Iraq met in Baghdad on Tuesday, unannounced, the pendulum has swung towards postponement of production increases, with ICE Brent so far rangebound at around $73.50 per barrel.
OPEC+ Meeting No Longer Happening in Person. OPEC+ will hold its much-anticipated policy meeting online rather than in person, as the oil markets are speculating about Saudi Arabia and Russia considering postponing output increases indefinitely amidst weak global demand.
China Issues Extra Quota for Independents. China has issued an additional crude import quota of 5.84 million tonnes (equivalent to almost 120,000 b/d) to independent refiners so that they can boost refinery runs in the remaining weeks of 2024, particularly independent major Hengli (SHA:600346).
Oil Service Firms Crank Up Pressure on Pemex. Oil service providers across Mexico are demanding that state-owned oil firm Pemex pay its overdue debts totaling $5.1 billion, just as the new Sheinbaum government has simplified taxation for Pemex, merging three duties into one.
Venezuela Braces for Shortages After Gas Meltdown. Propane production plunged 97% since an explosion at the Muscar gas complex debilitated Venezuela’s gas separation complex, drastically cutting the availability of cooking oil over the next four to five months until Muscar is fully repaired.
Diesel Backwardation Widest Since April. The time spread between M1 and M2 of ICE gasoil futures has moved to its widest since April, at a $7.5 per metric tonne premium, indicating that backwardation is steepening amidst lower Saudi and US incoming volumes and lower European availability.
Bangladesh to Open Exploration Next Month. Bangladesh will open its international bidding process for offshore gas exploration next month, concurrently liberalizing its LNG market, allowing any commercial entity to import LNG from the spot market.
Russian Pipeline Gas Still Flowing to Austria. The Gazprom-OMV arbitration row seems to be having no impact whatsoever on physical supplies of natural gas to Europe as this week’s nominations have been stable at 42.2 MCm/day, with Austria-bound deliveries returning to levels seen last week.
Adani Collapse Impacts French Major. French energy giant TotalEnergies (NYSE:TTE) announced it would stop any financial contributions to India’s Adani group of companies after the US SEC charged India’s second-richest businessman Gautam Adani with bribery, jointly developing 4 renewables-focused assets.
Exxon Sees No Future in Suriname. US oil major ExxonMobil (NYSE:XOM) has relinquished its 50% non-operated interest in deepwater Block 52 in Suriname, just across the border from its prolific Stabroek block in Guyana, with Malaysia’s Petronas taking over the entire acreage.
Coffee Prices Soar to 27-Year Highs on Shrinking Supply. Coffee futures skyrocketed to their highest since 1997 on weak crop concerns, with Arabica prices hitting $3.1 per pound, up almost 65% this year, as continuous drought conditions in Brazil are set to drastically reduce next year’s output.
Turkey Asks for Russia Sanction Waivers. The Turkish government is reportedly in talks with the United States to secure a Russia sanctions waiver to continue paying for its natural gas supplies through the recently sanctioned Gazprombank, with Gazprom supplying 50% of its gas imports.
Saudi Arabia Goes All In on Metals. Saudi Arabia signed 9 investment deals in metals and mining worth more than $9.3 billion with Asian mining majors such as Vedanta or Zijin Group, seeking to boost domestic capacity with a new copper smelter in Ras al-Khair, zinc and platinum smelters.
Brazil Gets The Dividend Mojo Going. Brazil’s national oil company Petrobras (NYSE:PBR) approved the payout of an additional $3.4 billion in extraordinary dividends to shareholders, withheld previously under the previous management, concurrently lowering the minimum cash level to $6 billion.
By Michael Kern for Oilprice.com
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The post The OPEC+ Meeting Is Looming Large Over Oil Markets appeared first on Energy News Beat.
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