Latest news with #ShariqKhan
Mint
04-08-2025
- Business
- Mint
Oil falls as OPEC output hike adds to oversupply concerns
By Shariq Khan and Enes Tunagur NEW YORK/LONDON (Reuters) -Oil prices fell to their lowest in a week on Monday after OPEC agreed to another large output increase in September, adding to oversupply concerns after U.S. data showed lacklustre fuel demand in the top consuming nation. Brent crude futures fell 43 cents, or 0.6%, to $69.24 a barrel by 11:39 a.m. ET (1539 GMT), while U.S. West Texas Intermediate crude declined by 48 cents, or 0.7%, to $66.85 a barrel. Both contracts were down more than 2% earlier in the session and hit the lowest in a week, after declining close to 3% on Friday. The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC , agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand. While the group cited healthy market fundamentals to back its decision, data released by the U.S. government last week showed the weakest gasoline demand in May, the start of the country's summer driving season, since the COVID-19 pandemic of 2020. The data also showed U.S. oil production at a monthly record in May, adding to global oversupply concerns. Oil traders are now hedging for the possibility of further supply increases from OPEC , with potential discussions to unwind a further 1.65 million bpd of cuts at the group's next meeting on September 7 adding pressure to oil prices. "OPEC retains a substantial amount of spare production capacity, and markets are now watching closely to see whether the group will tap into it," StoneX analyst Alex Hodes said. "So far, there are no clear signals that OPEC intends to deploy this additional capacity, but the possibility remains on the table," he added. Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC countries that have raised output since March will be 1.7 million bpd because other members have cut output after overproducing. Investors also continued to digest the impact of the latest U.S. tariffs on exports from dozens of trading partners and remain wary of further U.S. sanctions on Russia. U.S. President Donald Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine. Trump on Monday said he will substantially raise tariffs on India over its purchases of Russian oil, after two Indian government sources told Reuters over the weekend that the country will keep buying oil from Moscow despite Trump's threats. That helped limit oil's losses. About 1.7 million bpd of crude supply will be at risk if Indian refiners stop buying Russian oil, ING analysts said in a note.
Mint
04-08-2025
- Business
- Mint
Oil falls as OPEC output hike adds to oversupply concerns
By Shariq Khan and Enes Tunagur NEW YORK/LONDON (Reuters) -Oil prices fell to their lowest in a week on Monday after OPEC agreed to another large output increase in September, adding to oversupply concerns after U.S. data showed lacklustre fuel demand in the top consuming nation. Brent crude futures fell 43 cents, or 0.6%, to $69.24 a barrel by 11:39 a.m. ET (1539 GMT), while U.S. West Texas Intermediate crude declined by 48 cents, or 0.7%, to $66.85 a barrel. Both contracts were down more than 2% earlier in the session and hit the lowest in a week, after declining close to 3% on Friday. The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC , agreed on Sunday to raise oil production by 547,000 barrels per day (bpd) for September. The latest in a series of accelerated output increases aimed at capturing market share was in line with market expectations and marks a full and early reversal of the group's largest tranche of output cuts, amounting to about 2.5 million bpd, or about 2.4% of global demand. While the group cited healthy market fundamentals to back its decision, data released by the U.S. government last week showed the weakest gasoline demand in May, the start of the country's summer driving season, since the COVID-19 pandemic of 2020. The data also showed U.S. oil production at a monthly record in May, adding to global oversupply concerns. Oil traders are now hedging for the possibility of further supply increases from OPEC , with potential discussions to unwind a further 1.65 million bpd of cuts at the group's next meeting on September 7 adding pressure to oil prices. "OPEC retains a substantial amount of spare production capacity, and markets are now watching closely to see whether the group will tap into it," StoneX analyst Alex Hodes said. "So far, there are no clear signals that OPEC intends to deploy this additional capacity, but the possibility remains on the table," he added. Analysts at Goldman Sachs expect that the actual increase in supply from the eight OPEC countries that have raised output since March will be 1.7 million bpd because other members have cut output after overproducing. Investors also continued to digest the impact of the latest U.S. tariffs on exports from dozens of trading partners and remain wary of further U.S. sanctions on Russia. U.S. President Donald Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Moscow into halting its war in Ukraine. Trump on Monday said he will substantially raise tariffs on India over its purchases of Russian oil, after two Indian government sources told Reuters over the weekend that the country will keep buying oil from Moscow despite Trump's threats. That helped limit oil's losses. About 1.7 million bpd of crude supply will be at risk if Indian refiners stop buying Russian oil, ING analysts said in a note. (Reporting by Shariq Khan, Enes Tunagur and Florence TanEditing by Emelia Sithole-Matarise, David Goodman and Susan Fenton)
Yahoo
09-06-2025
- Business
- Yahoo
California fuel imports hit 4-year high amid refinery outages
By Shariq Khan and Nicole Jao NEW YORK (Reuters) -California's fuel imports rose to the highest in four years in May as refiners turned to historical trading partners in Asia and tapped some unusual routes to make up for shortages in the No.2 U.S. oil consumer state, according to shipping data and traders. The rise in shipments to California offers an early look at the future of the biggest gasoline and jet fuel markets in the U.S., which are expected to become more reliant on imports after Phillips 66 and Valero close two major refineries in the state by next year, amid growing regulatory and cost pressures, and declining demand for gasoline. "California's refining capacity is shrinking faster than its fuel demand is declining, forcing the state into a long-term import-dependent position," Kpler analyst Sumit Ritolia said. California's total petroleum product imports rose to 279,000 barrels per day (bpd) in May, the highest since June 2021, when a similar volume was imported, according to data from vessel tracker Kpler. About 187,000 bpd, or nearly 70% of the imports came from South Korea and other Asian exporters, who have historically been the top trading partners for California and other West Coast states, which are geographically isolated from major U.S. refining centers along the Gulf Coast. Recent outages in California at refineries owned by Chevron, PBF Energy and Valero caused a supply crunch in markets along the U.S. West Coast that necessitated more imports, traders and analysts said. "We have seen tighter supplies due to several refinery outages," StoneX oil analyst Alex Hodes said. That boosted prices in the U.S. Pacific Northwest substantially and led to increased imports, he said. There were several days where San Francisco gasoline was more than $40 a barrel above Gulf Coast pricing, nearly double the year-to-date average of $21, WoodMac analyst Austin Lin said. UNUSUAL ROUTES California's imports from the Bahamas, a trade route rarely used by West Coast refiners, hit a record high of 38,000 bpd in May, Kpler data showed. The previous record was 29,000 bpd in March. Flows on the route from the Caribbean were sporadic before this year's refining outages, averaging just 6,000 bpd throughout last year, the data showed. The Bahamas does not refine oil but exports fuel and blending components shipped there from the U.S. Gulf Coast refining hub as part of a workaround to a century-old U.S. shipping law to supply fuel to the East Coast when pipeline shipments are insufficient. The Jones Act bars movement of goods between U.S. ports unless carried by ships built domestically and staffed by local crew. However, there were only 55 such petroleum tankers as of the start of 2024, according to a government report, making them expensive and hard to procure. Sailing a tanker from Texas to California via the Bahamas is typically too expensive, but the recent refinery outages opened up the arbitrage to the West Coast from everywhere, a second U.S. gasoline trading source said. Ample availability in the Atlantic Basin of alkylate - a blending component highly sought for California's unique blend of CARBOB gasoline - could have also contributed to the uptick in imports from the Bahamas, Sparta Commodities analyst Philip Jones-Lux said. Meanwhile, California imported 39,000 bpd of gasoline and alkylate from India last month, the highest since January 2024, Kpler data showed. More waterborne imports will raise fuel costs in the most populous U.S. state, GasBuddy analyst Patrick De Haan said. However, the opening up of these unusual trade routes in May shows the state still has options to shield consumers from extraordinary price spikes, he said. Retail gasoline prices averaged $4.68 a gallon in California on Friday, while the national average was $3.12, according to GasBuddy data.
Yahoo
09-06-2025
- Business
- Yahoo
California fuel imports hit 4-year high amid refinery outages
By Shariq Khan and Nicole Jao NEW YORK (Reuters) -California's fuel imports rose to the highest in four years in May as refiners turned to historical trading partners in Asia and tapped some unusual routes to make up for shortages in the No.2 U.S. oil consumer state, according to shipping data and traders. The rise in shipments to California offers an early look at the future of the biggest gasoline and jet fuel markets in the U.S., which are expected to become more reliant on imports after Phillips 66 and Valero close two major refineries in the state by next year, amid growing regulatory and cost pressures, and declining demand for gasoline. "California's refining capacity is shrinking faster than its fuel demand is declining, forcing the state into a long-term import-dependent position," Kpler analyst Sumit Ritolia said. California's total petroleum product imports rose to 279,000 barrels per day (bpd) in May, the highest since June 2021, when a similar volume was imported, according to data from vessel tracker Kpler. About 187,000 bpd, or nearly 70% of the imports came from South Korea and other Asian exporters, who have historically been the top trading partners for California and other West Coast states, which are geographically isolated from major U.S. refining centers along the Gulf Coast. Recent outages in California at refineries owned by Chevron, PBF Energy and Valero caused a supply crunch in markets along the U.S. West Coast that necessitated more imports, traders and analysts said. "We have seen tighter supplies due to several refinery outages," StoneX oil analyst Alex Hodes said. That boosted prices in the U.S. Pacific Northwest substantially and led to increased imports, he said. There were several days where San Francisco gasoline was more than $40 a barrel above Gulf Coast pricing, nearly double the year-to-date average of $21, WoodMac analyst Austin Lin said. UNUSUAL ROUTES California's imports from the Bahamas, a trade route rarely used by West Coast refiners, hit a record high of 38,000 bpd in May, Kpler data showed. The previous record was 29,000 bpd in March. Flows on the route from the Caribbean were sporadic before this year's refining outages, averaging just 6,000 bpd throughout last year, the data showed. The Bahamas does not refine oil but exports fuel and blending components shipped there from the U.S. Gulf Coast refining hub as part of a workaround to a century-old U.S. shipping law to supply fuel to the East Coast when pipeline shipments are insufficient. The Jones Act bars movement of goods between U.S. ports unless carried by ships built domestically and staffed by local crew. However, there were only 55 such petroleum tankers as of the start of 2024, according to a government report, making them expensive and hard to procure. Sailing a tanker from Texas to California via the Bahamas is typically too expensive, but the recent refinery outages opened up the arbitrage to the West Coast from everywhere, a second U.S. gasoline trading source said. Ample availability in the Atlantic Basin of alkylate - a blending component highly sought for California's unique blend of CARBOB gasoline - could have also contributed to the uptick in imports from the Bahamas, Sparta Commodities analyst Philip Jones-Lux said. Meanwhile, California imported 39,000 bpd of gasoline and alkylate from India last month, the highest since January 2024, Kpler data showed. More waterborne imports will raise fuel costs in the most populous U.S. state, GasBuddy analyst Patrick De Haan said. However, the opening up of these unusual trade routes in May shows the state still has options to shield consumers from extraordinary price spikes, he said. Retail gasoline prices averaged $4.68 a gallon in California on Friday, while the national average was $3.12, according to GasBuddy data. Sign in to access your portfolio
Yahoo
03-06-2025
- Business
- Yahoo
Analysis-Global oil refiners see short-term boost from higher margins
By Robert Harvey, Shariq Khan and Nicole Jao LONDON (Reuters) -Refiners across the globe are reaping unexpected profits from producing key fuels in recent weeks, offering an ailing sector respite before an anticipated weakening later this year, as plant closures have tightened fuel supply needed to meet peak summer demand. The strength in fuel markets contrasts with crude oil prices falling to a four-year low in May, after OPEC+ unwound output cuts faster than planned. It also suggests demand has so far proved resilient despite ongoing concerns about the impact of tariffs. "Margins are strong because the balance of products - supply and demand - is still tight," said Sparta Commodities analyst Neil Crosby. Refining margins reflect the profits a plant makes from processing crude oil into fuels such as gasoline or diesel. Just a few months ago, oil majors were warning 2025 would be a bleak year for refining. TotalEnergies and BP reported lower first-quarter profits because of weaker earnings from fuels. Refiners have broadly struggled with waning demand from economic slowdowns, an increasing uptake of electric vehicles, and competition from newer plants in Asia and Africa. Global composite refining margins reached $8.37 per barrel in May 2025, according to consultancy Wood Mackenzie, their highest since March 2024, but still much lower than the $33.50 average in June 2022 during the post-pandemic demand recovery and in the wake of Russia's invasion of Ukraine. Closures in the United States and Europe have slowed global net refinery capacity growth below demand growth, helping to make operational refineries relatively more profitable. Global diesel supply could decline by 100,000 barrels per day (bpd) year-on-year in 2025, while demand will drop 40,000 bpd, according to energy consultancy FGE. Gasoline supply will decline by 180,000 bpd, with demand rising by 28,000 bpd. "We are therefore seeing a tighter product market for key transport fuels which is exerting upwards pressure on margins, much to the relief and joy of regional refiners," said FGE's head of refined products Eugene Lindell. Refiners of all fuel-producing configurations are benefitting from current margins, FGE's head of refining Qilin Tam added, as light fuels such as gasoline and heavy products like fuel oil have recently increased. In Europe, closures include Petroineos' Grangemouth refinery in Scotland and Shell's Wesseling facility this year, as well as a part closure of BP's Gelsenkirchen refinery. In the U.S., LyondellBasell's Houston refinery was shuttered this year, while Phillips 66's Los Angeles refinery and Valero's Benicia refinery are set to close in October 2025 in April 2026 respectively. Unplanned refinery shutdowns have also compounded the impact of closures. A power outage across the Iberian peninsula on April 28 took around 1.5 million bpd of refinery capacity offline, JPMorgan noted, with 400,000 bpd of that still shut in two weeks later. Two of the world's major new refinery projects, Nigeria's giant Dangote refinery, and Mexico's Olmeca refinery, both had unplanned outages on gasoline-producing units in April. TIGHTER BALANCES Fuel inventories at key hubs have declined this year, creating extra demand for refinery production heading into the peak summer season. Stocks in the OECD region, which includes the U.S., EU and Singapore, fell by 50 million barrels over January-May, according to JPMorgan analysts. "This significant reduction in product stocks has underscored the resilience in product prices," the analysts said. Global fuel demand in the northern hemisphere is highest in summer as motoring and air travel increase. In the Middle East, heavy fuel oil demand peaks in summer to meet cooling demand when temperatures soar. "Strength in the northern hemisphere summer demand growth is where we see some support to margins," said Rystad Energy analyst Janiv Shah. U.S. refining executives have been upbeat on demand, while noting relatively low stocks. "Our current gasoline supply outlook is for those inventories to continue to tighten," Phillips 66 executive vice president Brian Mandell said on the firm's first-quarter earnings call. Marathon Petroleum's domestic and export businesses were seeing steady demand for gasoline, and growth for diesel and jet compared to 2024, CEO Maryann Mannen said on its earnings call. However, analysts have warned that the current strength may soon fade as demand is hit by trade wars, and as fuel production rises as plants look to profit from higher margins. "We have the view that there is a bit of a short-term bump," Wood Mackenzie analyst Austin Lin said. Global oil demand growth is set to average 650,000 bpd for the remainder of 2025, falling from just short of 1 million bpd in the first quarter as trade uncertainty weighs on the global economy, according to the International Energy Agency. "Refiners should be hedging everything now, as I think this is as good as it gets for them," a veteran oil trader, who asked not to be named, added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
