Latest news with #StephanieKelly
Yahoo
4 days ago
- Business
- Yahoo
Demand for US light sweet crude drops as OPEC+ ramps up output
By Stephanie Kelly and Robert Harvey NEW YORK (Reuters) -Rising OPEC+ supplies and new streams of oil coming online globally are increasing options for European and Asian refiners and weighing on export demand for light sweet U.S. crude, contributing to lower prices in the country's main oil-producing regions. The U.S., the world's largest crude producer, is facing increasing competition as the Organization of the Petroleum Exporting Countries and its allies pump more oil in a bid to regain market share and punish members that over-produce. Since April, OPEC+ countries including Saudi Arabia and Russia have made or announced increases totaling 1.37 million barrels per day, or 62% of the 2.2 million bpd they aim to add back to the market. The additional supplies come at a time of broad uncertainty for global oil producers as they assess how volatile trade policies are impacting the world's economic outlook and prepare for a longer-term future in which greener fuels could displace their barrels. For the U.S., lower demand for a significant portion of its crude will likely add to a complicated outlook for producers already digesting on-again, off-again tariffs from President Donald Trump's administration. Companies are considering cutting output and jobs even as Trump urges higher domestic production. U.S. exports fell to an average of 3.8 million bpd in May from an average of 4 million bpd in April, according to an analysis of weekly Energy Information Administration data. Prices have declined for crudes such as WTI-Midland, a key sweet grade from the U.S. shale region. Since early March, its price is off by 45% to a 60-cent premium to U.S. crude futures. Light Louisiana Sweet from the U.S. Gulf Coast has fallen by about 30% to a $2.70 per barrel premium over the same period. "That's a part of OPEC accelerating. Light sweets are weak, broadly speaking," said Jeremy Irwin, global crude lead at Energy Aspects, adding that demand is expected to fall further as European refiners favor medium crudes in the summer months. The U.S. sent 1.4 million bpd of light, sweet crude to Europe in May, versus 1.6 million bpd in April, data from Kpler showed. In May 2024, the U.S. exported 1.7 million bpd of light, sweet crude, which is lighter in density and lower in sulfur content, to Europe. While light crudes are typically easier for refineries to process, many global refineries have invested in upgrading capacity to run heavy-sour grades, which are usually cheaper and still yield sufficient quantities of higher-value fuels. As Asian refiners come out of turnaround season - when plants reduce output for maintenance purposes - and European refiners ramp up fuel production going into summer, demand for medium-sour grades has increased. GLOBAL SUPPLY MEETS UNCERTAIN DEMAND Increased OPEC+ exports will primarily flow into Asia. Lower prices for Murban crude produced in the United Arab Emirates have made it unprofitable to export WTI to Asia, said Richard Price, an oil markets analyst at Energy Aspects. OPEC+ is increasing output more quickly than expected this year to punish allies such as Kazakhstan, which has produced well above its OPEC+ target. "The rise in Kazakh crude production means greater availability of CPC blend crude, which is increasingly competing with WTI into Europe," said Matt Smith, a lead oil analyst at Kpler. CPC Blend is light density crude, similar to WTI-Midland. Additionally, Guyana and Brazil's exports into Europe could increase from the 400,000 bpd they each already send, if European refiners can absorb it, Smith said. Other sweet grades including barrels from Libya and Algeria, and Norway's new Johan Castberg stream, are giving European refiners more choice, Vortexa analyst Rohit Rathod said. Global petroleum consumption is expected to grow by 970,000 bpd in 2025 and 900,000 bpd in 2026, the EIA said, while global crude production is expected to grow by 840,000 bpd in 2025 and 680,000 bpd in 2026. But demand growth currently is mainly fueled by oil products that are best refined from heavier barrels, said Janiv Shah, vice president of commodity markets at Rystad Energy. "As such, we expect increased throughput of available medium sour barrels and some discounting of light sweet grades."
New Straits Times
13-05-2025
- Business
- New Straits Times
Oil prices ease off 2-week highs after US, China pause tariff war
KUALA LUMPUR: Oil prices eased on Tuesday from a two-week high reached during the previous session after the US and China agreed to temporarily slash tariffs, sparking optimism that a trade war between the world's two biggest economies would come to an end. The US and China agreed to slash steep tariffs for at least 90 days, sending Wall Street stocks, the US dollar and crude prices sharply higher on Monday. But underlying schisms that led to the dispute remain, including the US trade deficit with China and US President Donald Trump's demand for more action from Beijing to combat the US fentanyl crisis. Brent crude futures dropped 14 cents, or 0.2 per cent, to US$64.82 per barrel by 0011 GMT. US West Texas Intermediate (WTI) crude fell 13 cents, or 0.2 per cent, to US$61.82. Both benchmarks closed about 1.5 per cent higher on Monday at their steepest settlements since April 28. The gains come during a turbulent time for global oil markets. Last month, oil prices fell to a four-year low on investor worries that the US-China trade war could depress economic growth and oil demand. Furthermore, the Organisation of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected. (Reporting by Stephanie Kelly; Editing by Jacqueline Wong)
Yahoo
13-05-2025
- Business
- Yahoo
Oil prices ease off 2-week highs after US, China pause tariff war
By Stephanie Kelly (Reuters) - Oil prices eased on Tuesday from a two-week high reached during the previous session after the U.S. and China agreed to temporarily slash tariffs, sparking optimism that a trade war between the world's two biggest economies would come to an end. The U.S. and China agreed to slash steep tariffs for at least 90 days, sending Wall Street stocks, the U.S. dollar and crude prices sharply higher on Monday. But underlying schisms that led to the dispute remain, including the U.S. trade deficit with China and U.S. President Donald Trump's demand for more action from Beijing to combat the U.S. fentanyl crisis. Brent crude futures dropped 14 cents, or 0.2%, to $64.82 per barrel by 0011 GMT. U.S. West Texas Intermediate (WTI) crude fell 13 cents, or 0.2%, to $61.82. Both benchmarks closed about 1.5% higher on Monday at their steepest settlements since April 28. The gains come during a turbulent time for global oil markets. Last month, oil prices fell to a four-year low on investor worries that the U.S.-China trade war could depress economic growth and oil demand. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected. 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
Yahoo
13-05-2025
- Business
- Yahoo
Oil prices ease off 2-week highs after US, China pause tariff war
By Stephanie Kelly (Reuters) - Oil prices eased on Tuesday from a two-week high reached during the previous session after the U.S. and China agreed to temporarily slash tariffs, sparking optimism that a trade war between the world's two biggest economies would come to an end. The U.S. and China agreed to slash steep tariffs for at least 90 days, sending Wall Street stocks, the U.S. dollar and crude prices sharply higher on Monday. But underlying schisms that led to the dispute remain, including the U.S. trade deficit with China and U.S. President Donald Trump's demand for more action from Beijing to combat the U.S. fentanyl crisis. Brent crude futures dropped 14 cents, or 0.2%, to $64.82 per barrel by 0011 GMT. U.S. West Texas Intermediate (WTI) crude fell 13 cents, or 0.2%, to $61.82. Both benchmarks closed about 1.5% higher on Monday at their steepest settlements since April 28. The gains come during a turbulent time for global oil markets. Last month, oil prices fell to a four-year low on investor worries that the U.S.-China trade war could depress economic growth and oil demand. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) decided to boost oil output by more than previously expected.
Yahoo
30-04-2025
- Business
- Yahoo
In Trump's first 100 days, US energy dominance plans roiled by trade uncertainty
By Stephanie Kelly, Timothy Gardner and Curtis Williams NEW YORK (Reuters) -Just 100 days into President Donald Trump's second term, oil prices have slumped over 20% to below many U.S. producers' breakeven costs as investors lose confidence amid tariff and policy uncertainty - undercutting Trump's push for U.S. energy dominance. Trump campaigned on the often repeated refrain of "drill, baby, drill" and moved on his first day in office on January 20 to maximize output in the U.S., the world's top oil and gas producer. His protectionist trade policy, however, has reduced oil demand growth forecasts, and lower international energy prices have soured the outlook for the industry. Benchmark U.S. crude prices have plummeted to around $60 a barrel, a low not seen since the COVID-19 pandemic, and below the $65 level that many oil producers say they need to make money. Over half of the decline occurred since Trump's "Liberation Day" on April 2 when he declared a minimum 10% tariff on U.S. imports, prompting expectations that the global economy would slow. "The macro environment has gotten much worse, thanks to the tariffs and policy uncertainty," said Ben Cahill, director at the Center for Energy and Environmental Systems Analysis at the University of Texas at Austin. "Energy dominance requires investor confidence," he added. The Trump administration has also imposed sanctions targeting Iranian oil sales, including on China-based energy facilities, in an attempt to help prevent Tehran from developing a nuclear weapon and funding militant groups across the Middle East. While the sanctions provided some support to oil prices, they added to market uncertainty. Citing U.S. tariffs, forecasters across the board, including the U.S. Energy Information Administration, the International Energy Agency, OPEC and major banks, have cut their oil price and demand growth outlooks. OPEC+'s decision to speed up output hikes this spring exacerbated the price fall. Yet, Trump had called on Saudi Arabia and OPEC to bring down the cost of oil just days after he took office. As a result of the price slump, U.S. crude producers - who were pumping some 13.4 million barrels per day (bpd) in April and are expected to pump 13.5 million bpd in 2025, down from previous forecasts - are already putting the brakes on drilling new wells. "Trump and his energy team seem to think U.S. producers will drill through the uncertainty that's been created. They won't, and hoping they will is a poor calculus," Roe Patterson, former CEO of oilfield company Basic Energy Services and managing partner at Marauder Capital, wrote in a LinkedIn post. A Department of Energy spokesperson said Trump and Energy Secretary Chris Wright are committed to expanding American energy infrastructure, in response to a request for comment for this story. LNG COMES OUT ON TOP Natural gas, and its liquefied state, LNG, have fared better than oil under Trump. On his first day in office, Trump ordered the resumption of LNG export approvals - something former President Joe Biden had paused - and has started rolling back environmental regulations that slowed projects. Several companies have announced investments in recent months, including Australia's Woodside Energy, which gave final approval to build a $17.5 billion LNG project and cited Trump's desire for "American energy dominance." The EIA in April forecast average U.S. LNG exports would reach 15.2 billion cubic feet per day in 2025, up from a record 11.9 bcfd in 2024 and higher than the outlook before the Trump administration. Tariffs on steel and aluminum, however, will increase project costs, adding to labor, financing and equipment inflation, said Jason Feer, the head of business intelligence at Poten and Partners. CLEAN ENERGY HIT Trump's policies have favored the fossil fuel sector over the low-carbon energy industry. On his first day, he ordered the U.S. to withdraw from the Paris climate agreement and suspended new federal offshore wind leasing, casting doubt on the viability of dozens of planned developments. Trump has also attempted to expand electricity generated by fossil fuels through deregulation and executive actions that loosen power plant emissions rules. Boosting coal-generated electricity, which now makes up less than 20% of supplies versus an over 50% share in 2010, will be difficult and does not make economic sense. Coal has lost market share to gas, wind and solar power. The average coal power plant is around 50 years old, and big utilities have no plans for new ones. "Federal policy now clearly favors oil, gas, and other fossil energy sources, while disfavoring renewable energy sources that had enjoyed incentives and other favorable treatment under the prior administration," said David Amerikaner, partner at law firm Duane Morris.
