Latest news with #NatashaKaneva
Observer
3 days ago
- Business
- Observer
Low global diesel supplies support crude prices despite OPEC+ boost
NEW YORK: Low diesel stockpiles worldwide are countering the downward pressure on crude oil prices from rising OPEC+ supply and setting the stage for a third consecutive year of above-normal refining profits. Diesel, the top component of global fuel demand, has been the lone bright spot in an otherwise lackluster oil market this year as refinery closures and a shortage of crude with higher diesel yields have kept inventories below historical norms, analysts said. Meanwhile, demand for the industrial and transportation fuel has been unexpectedly strong because of resilient manufacturing activity and cooling demand due to heatwaves in parts of the world. Tight stocks of diesel have also helped support global oil prices, allowing the Organization of the Petroleum Exporting Countries and its allies to unwind their largest tranche of output cuts months ahead of target, and could justify further supply hikes under discussion. Global benchmark Brent crude futures have rebounded 15% to around $68 a barrel from this year's lows, hit in May when OPEC+ first began unwinding supply cuts. "Tight diesel inventories are providing a very strong floor to oil markets in the mid-$60 per barrel range in the short term," Natasha Kaneva, head of global commodities strategy for J.P. Morgan, told Reuters. US distillate fuel inventories stood at 113 million barrels by August 1, 12% below the five-year average, according to government data. At Europe's Amsterdam, Rotterdam, Antwerp trading hub, independently-held diesel stockpiles slipped under 13 million barrels for the first time since December 2023. The tight market has been something of a surprise after analysts and fuel producers earlier this year anticipated that the opening of new refineries around the world would cause a supply glut. In the latest quarters, however, top global refiners have reported stronger-than-expected profits due to resilient margins. "If I were a trader, I would be very comfortable going long diesel in the months ahead," said Tom Kloza, an analyst for consultancy firm Turner, Mason & Co. Tight stockpiles have pushed diesel refining margins higher in recent months. In the US, ultra-low sulfur diesel (ULSD) futures briefly traded at a $40 premium over US crude futures.— Reuters
Zawya
4 days ago
- Business
- Zawya
Low global diesel supplies support crude prices despite OPEC+ boost
Low diesel stockpiles worldwide are countering the downward pressure on crude oil prices from rising OPEC+ supply and setting the stage for a third consecutive year of above-normal refining profits. Diesel, the top component of global fuel demand, has been the lone bright spot in an otherwise lackluster oil market this year as refinery closures and a shortage of crude with higher diesel yields have kept inventories below historical norms, analysts said. Meanwhile, demand for the industrial and transportation fuel has been unexpectedly strong because of resilient manufacturing activity and cooling demand due to heatwaves in parts of the world. Tight stocks of diesel have also helped support global oil prices, allowing the Organization of the Petroleum Exporting Countries and its allies to unwind their largest tranche of output cuts months ahead of target, and could justify further supply hikes under discussion. Global benchmark Brent crude futures have rebounded 15% to around $68 a barrel from this year's lows, hit in May when OPEC+ first began unwinding supply cuts. "Tight diesel inventories are providing a very strong floor to oil markets in the mid-$60 per barrel range in the short term," Natasha Kaneva, head of global commodities strategy for J.P. Morgan, told Reuters. U.S. distillate fuel inventories stood at 113 million barrels by August 1, 12% below the five-year average, according to government data. At Europe's Amsterdam, Rotterdam, Antwerp trading hub, independently-held diesel stockpiles slipped under 13 million barrels for the first time since December 2023. The tight market has been something of a surprise after analysts and fuel producers earlier this year anticipated that the opening of new refineries around the world would cause a supply glut. In the latest quarters, however, top global refiners have reported stronger-than-expected profits due to resilient margins. "If I were a trader, I would be very comfortable going long diesel in the months ahead," said Tom Kloza, an analyst for consultancy firm Turner, Mason & Co. REFINERS REJOICE BUT UNCERTAINTY AHEAD Tight stockpiles have pushed diesel refining margins higher in recent months. In the U.S., ultra-low sulfur diesel (ULSD) futures briefly traded at a $40 premium over U.S. crude futures on July 18, the highest since February 2024. The premium is now at about $31, versus the prior five-year average of $30. In Europe, diesel margins stood at $21.13 as of August 5 over Brent futures, after hitting a near one-year high of $26.31 at the end of June. Heavy maintenance activity at existing plants has also weighed on diesel supply, said Energy Aspects analyst Natalia Losada. Looking ahead, however, even more refinery closures are expected in the U.S., especially in California and Europe, and the addition of the big 650,000 bpd Dangote refinery in Nigeria has not been able to offset the reduced capacity. Lower Mexican exports and tightening U.S. sanctions on Venezuela and Russia are also set to restrict availability of medium- and heavy-sour crudes, which have a higher diesel yield, energy economist Philip Verleger said in a note. The U.S. is also pressuring China and India to stop buying oil from Moscow. Agreements underway to resolve U.S. trade disputes could exacerbate the diesel shortage by pushing Asian importers to buy more U.S. crude oil, which has a lower diesel yield, Verleger said. "The Trump administration's trade policies and sanctions will be a major contributor to the tightening market," he said. Still, before the disputes are resolved, U.S. tariffs against its trading partners could slow the global economy, hitting diesel demand, investors said. In Asia, margins have already fallen to nearly a two-month low of $17 a barrel due to softening near-term supply-demand fundamentals, giving back most of the gains recorded since the Iran-Israel conflict escalated in mid-June.
Reuters
4 days ago
- Business
- Reuters
Low global diesel supplies support crude prices despite OPEC+ boost
NEW YORK, Aug 7 (Reuters) - Low diesel stockpiles worldwide are countering the downward pressure on crude oil prices from rising OPEC+ supply and setting the stage for a third consecutive year of above-normal refining profits. Diesel, the top component of global fuel demand, has been the lone bright spot in an otherwise lackluster oil market this year as refinery closures and a shortage of crude with higher diesel yields have kept inventories below historical norms, analysts said. Meanwhile, demand for the industrial and transportation fuel has been unexpectedly strong because of resilient manufacturing activity and cooling demand due to heatwaves in parts of the world. Tight stocks of diesel have also helped support global oil prices, allowing the Organization of the Petroleum Exporting Countries and its allies to unwind their largest tranche of output cuts months ahead of target, and could justify further supply hikes under discussion. Global benchmark Brent crude futures have rebounded 15% to around $68 a barrel from this year's lows, hit in May when OPEC+ first began unwinding supply cuts. "Tight diesel inventories are providing a very strong floor to oil markets in the mid-$60 per barrel range in the short term," Natasha Kaneva, head of global commodities strategy for J.P. Morgan, told Reuters. U.S. distillate fuel inventories stood at 113 million barrels by August 1, 12% below the five-year average, according to government data. At Europe's Amsterdam, Rotterdam, Antwerp trading hub, independently-held diesel stockpiles slipped under 13 million barrels for the first time since December 2023. The tight market has been something of a surprise after analysts and fuel producers earlier this year anticipated that the opening of new refineries around the world would cause a supply glut. In the latest quarters, however, top global refiners have reported stronger-than-expected profits due to resilient margins. "If I were a trader, I would be very comfortable going long diesel in the months ahead," said Tom Kloza, an analyst for consultancy firm Turner, Mason & Co. Tight stockpiles have pushed diesel refining margins higher in recent months. In the U.S., ultra-low sulfur diesel (ULSD) futures briefly traded at a $40 premium over U.S. crude futures on July 18, the highest since February 2024. The premium is now at about $31, versus the prior five-year average of $30. In Europe, diesel margins stood at $21.13 as of August 5 over Brent futures, after hitting a near one-year high of $26.31 at the end of June. Heavy maintenance activity at existing plants has also weighed on diesel supply, said Energy Aspects analyst Natalia Losada. Looking ahead, however, even more refinery closures are expected in the U.S., especially in California and Europe, and the addition of the big 650,000 bpd Dangote refinery in Nigeria has not been able to offset the reduced capacity. Lower Mexican exports and tightening U.S. sanctions on Venezuela and Russia are also set to restrict availability of medium- and heavy-sour crudes, which have a higher diesel yield, energy economist Philip Verleger said in a note. The U.S. is also pressuring China and India to stop buying oil from Moscow. Agreements underway to resolve U.S. trade disputes could exacerbate the diesel shortage by pushing Asian importers to buy more U.S. crude oil, which has a lower diesel yield, Verleger said. "The Trump administration's trade policies and sanctions will be a major contributor to the tightening market," he said. Still, before the disputes are resolved, U.S. tariffs against its trading partners could slow the global economy, hitting diesel demand, investors said. In Asia, margins have already fallen to nearly a two-month low of $17 a barrel due to softening near-term supply-demand fundamentals, giving back most of the gains recorded since the Iran-Israel conflict escalated in mid-June.
Bloomberg
24-07-2025
- Business
- Bloomberg
JP Morgan's Kaneva Sees Strong Price Support For Oil
Natasha Kaneva, Head of Global Commodities Strategy, J.P. Morgan, says U.S. oil inventories are very low, but positioning is fairly neutral at the moment, and adds the U.S. faces significant event risk, much of it concentrated in September, including tension involving Russia and Iran. She speaks with Romaine Bostick and Scarlet Fu on 'The Close.' (Source: Bloomberg)
Yahoo
23-06-2025
- Business
- Yahoo
Oil plummets as Iranian retaliation against US spares key energy assets
Oil futures slid 7% on Monday as Iran appeared to spare the energy market while the country launched missiles targeted at a US air base in Qatar in retaliation for US bombings on Iranian nuclear sites. Brent crude (BZ=F), the international benchmark, dropped to settle at $71.48 per barrel. West Texas Intermediate (CL=F) also fell roughly 7% to settle at $68.51 per barrel. The declines came after Iranian state media said it launched missile attacks against a US air base in Qatar, matching the number of bombs dropped by the US over the weekend, in a move the Associated Press said signaled "a likely desire to deescalate." Prior to the retaliatory move, Wall Street weighed various scenarios after President Trump announced on Saturday that the US struck three Iranian nuclear facilities, including the threat of Iran closing the Strait of Hormuz, a critical chokepoint for oil flows. On Monday morning, President Trump posted on social media: "To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!" "The main reason for this stability is that energy infrastructure has largely been spared from direct attacks, with number of oil tankers transiting through the Strait of Hormuz remaining steady," JPMorgan's Natasha Kaneva and her team wrote on Monday morning. On Sunday, futures spiked after Iran's parliament voted to close the Strait of Hormuz, but the final decision rests with Iran's Supreme National Security Council and Supreme Leader Ayatollah Ali Khamenei. The oil market is now factoring in "a one-in-five chance of a material disruption in Gulf energy production flows, with potential for crude prices to reach the $120-130 range," Kaneva wrote. "Yet, beyond the short-term spike induced by geopolitics, our base case for oil remains anchored by our supply-demand balance, which shows that the world has enough oil," she added. She also noted that "with fewer reliable partners in the Middle East and limited regional appetite for a broader conflict, Iran faces a constrained set of options and a heightened set of risks as it deliberates its course of action." Other possible retaliatory moves from Iran could include supporting Yemen's Houthi rebels in renewed attacks on commercial shipping, or going after energy infrastructure in neighboring countries. If crude climbs into the $120 to $130 range, analysts predict gasoline and diesel prices could rise by as much as $1.25 per gallon. "Consumers would be looking at a national average gasoline price of around $4.50 per gallon — closer to $6.00 if you're in California," Lipow Oil Associates president Andy Lipow said in a Sunday note. The key issue isn't just the potential for supply disruption, but how long it lasts, Rebecca Babin, senior energy trader at CIBC Private Wealth, told Yahoo Finance on Sunday. "If infrastructure is hit but can be quickly restored, crude may struggle to hold gains," she said. "But if Iran's response causes lasting damage or introduces long-term supply risk, we're likely to see a stronger and more sustained move higher." Last week, JPMorgan analysts noted that since 1967 — aside from the Yom Kippur War in 1973 — none of the 11 major military conflicts involving Israel have had a lasting impact on oil prices. In contrast, events directly involving major regional oil producers, such as the first Gulf War in 1990, the Iraq War in 2003 and the imposition of sanctions on Iran in 2018, have all led to meaningful and sustained moves in oil markets. "During these episodes, we estimate that oil traded at a $7–$14 per barrel premium to its fair value for an extended period," JPMorgan's Kaneva wrote. They added that the most significant and lasting price impacts historically come from "regime changes" in oil-producing countries, whether that be through leadership transitions, coups, revolutions, or major political shifts. "While demand conditions and OPEC's spare capacity shape the broader market response, these events typically drive substantial oil price spikes, averaging a 76% increase from onset to peak," Kaneva wrote. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) had raised output in the months leading up to Israel's strike on Iran on June 13. Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
