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The Star
22-07-2025
- Business
- The Star
Uneasy stability in oil markets amid OPEC+ moves, Middle East ceasefire
Oil is going through a period of uneasy calm, but market players are pondering if it's a trend that would last. The higher-than-expected rise in OPEC+ production quotas for August, combined with a ceasefire between Israel and Iran, has provided oil markets some breathing space and introduced a bearish sentiment to prices, but rising expectations of potential additional sanctions on Russia by Washington could soon change the landscape and keep markets on edge. But one thing is becoming increasingly clear – even if geopolitics takes an ugly turn, it may not be able to overshadow the impact on fast-growing global supplies amid relatively slower demand. Amid heightened tensions in the Middle East recently, oil markets experienced a peak in the fear premium when Dated Brent surged past US$80 per barrel. However, in the third quarter of this year, S&P Global Commodity Insights expects Dated Brent to decline to the mid-US$60s per barrel. And by the end of the year, strong oil supply growth relative to demand is expected to push Dated Brent into the US$50s/b. The eight members of the OPEC+ alliance implementing voluntary crude output cuts agreed July 5 to hike their production quotas by 548,000 b/d in August, accelerating their claw back of market share. The group was of the view that members were encouraged by healthy market fundamentals, which was reflected in low oil inventories. The increase is 33% more than the previously agreed monthly increases of 411,000 b/d that the voluntary cutters had agreed in their previous three meetings. And there were expectations that the group would repeat the same for August. The alliance is bringing barrels back to market at a time of high seasonal demand, with the US entering its driving season while Middle East countries burn more oil to meet electricity needs. But despite this, oil markets are heading towards an oversupply scenario in the second half of 2025. Commodity Insights forecasts that the market could witness a surplus of more than 1 million b/d by the end of the year if OPEC+ members fully unwind the voluntary production cuts by October. Global commercial inventories may rise by over 600,000 b/d in August, escalating to an average of 1.7 million b/d from September to December, influenced in part by actual OPEC+ production levels. The sustained increase in OPEC+ output is likely to exert further bearish pressure on oil prices, particularly post-summer. Saudi Arabia's crude exports notably increased by 475,000 b/d to 6.17 million b/d in June, accounting for 90% of the total month-over-month growth among eight OPEC+ nations. This growth stemmed from inventory draws and increased production, with refinery runs and crude burn in the kingdom estimated to have risen by 140,000 b/d and 75,000 b/d month over month, respectively. Ceasefire does not mean end of conflict A ceasefire in the Middle East does not mean the conflict is over. The fear premium in oil prices can reappear overnight, bringing back uncertainties in the oil market. Israel's military success may have raised the possibility that Iran could ease 46 years of hostilities with the US and Israel, but for now, it's too early to jump to that conclusion. A weakened Iran could become more repressive internally and provocative externally. Much will depend on the internal and opaque political dynamics within Iran. But the impact on the oil market could be profound if trade and investment sanctions against Iran are eased or lifted. In addition, oil markets will closely monitor Washington's recent decision to remove Syria's oil ministry, its two refineries, and maritime authority from its sanctions list, as this could pave the way for the war-torn country's return to the international oil trade. US sanctions on Syria were officially lifted by President Donald Trump on June 30, following earlier moves by the EU and the UK to ease economic curbs on the country. Before the onset of the civil war in 2011, Syria pumped around 380,000-400,000 b/d of crude -- enough to meet its domestic consumption and supply some barrels to the international market. However, Syria's oil and gas fields and infrastructure have been badly damaged and neglected. Syria's crude production has plummeted to approximately 90,000 b/d from 442,000 b/d in 2004, severely limiting export potential until production recovers, according to Commodity Insights data. The removal of sanctions could eventually increase Syrian oil supply to global markets, though significant production increases will take time. Syrian crude grades, which are predominantly medium-heavy sour varieties, could eventually compete with similar Mediterranean grades once production and export infrastructure are restored. Threat of secondary sanctions Adding a layer of uncertainty to the market is the latest statement from Trump who said on July 14 that he would impose 100% secondary sanctions on any country that buys Russian exports if Russia does not reach a peace agreement with Ukraine in the next 50 days. The announcement came amid a bipartisan push in the US Senate to pass the Sanctioning Russia Act of 2025. The bill would impose a 500% duty on all goods or services imported into the US from any country that "knowingly sells, supplies, transfers, or purchases oil, uranium, petroleum products, or petrochemical products that originated in the Russian Federation," according to the bill text. To date in 2025, India, China, and Turkey have been the largest purchasers of Russian oil, according to data from S&P Global Commodities at Sea, collectively representing 53% of Russia's total waterborne exports. India has imported an average of 1.69 million b/d of Russian crude and condensates in 2025, while China took an average of 1.09 million b/d and Turkey 377,000 b/d, CAS data showed. Potential 100% US tariffs on China and India would have significant market ramifications and could alter Asian crude oil flows to a large extent. By now, top buyers of Russian crude must have started pondering about their Plan B in the event new US sanctions against Russia come into force. Sambit Mohanty is Asia Energy Analyst at S&P Global Commodity Insights, leading coverage for Platts Oilgram News for the Asia-Pacific region. Sambit is based in Singapore and has more than 25 years of experience as a senior journalist and editor analysing commodities and energy trends in the region. He holds a Master's Degree in Applied Economics.
New Straits Times
13-06-2025
- Business
- New Straits Times
Oil surges, stocks fall on Middle East fears as Israel strikes Iran
HONG KONG: Oil prices soared and stocks sank Friday after Israel launched "preemptive" strikes on Iran's nuclear and military sites and warned of more to come, stoking fears of a full-blown war. Investors ran for the hills on news of the attacks and a warning that retaliatory action from Tehran was possible, after US President Donald Trump said a "massive conflict" in the region was possible. While Tel Aviv said it had struck military and nuclear targets Iran said residential buildings had been hit. Israeli Prime Minister Benjamin Netanyahu said in a video statement: "This operation will continue for as many days as it takes to remove this threat. "We struck at the heart of Iran's nuclear enrichment programme. We targeted Iran's main enrichment facility at Natanz. We also struck at the heart of Iran's ballistic missile programme," he added. Iranian nuclear scientists "working on the Iranian bomb" had also been hit, he said. Israeli Defence Minister Israel Katz cautioned that "a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future." Trump had previously warned that an attack could be on the cards, telling reporters at the White House: "I don't want to say imminent, but it looks like it's something that could very well happen." The US leader said he believed a "pretty good" deal on Iran's nuclear programme was "fairly close", but that an Israeli strike on the country could wreck the chances of an agreement. A US official said there had been no US involvement in the operation. Still there are worries the United States could be sucked into the crisis after Iran threatened this week to target US military bases in the region if a regional conflict broke out. Both main oil contracts, which had rallied earlier in the week on rising tensions, spiked more than eight percent amid fears about supplies of the commodity. The rush from risk assets to safe havens saw equity markets across Asia tumble and bonds rally with gold. US and European equity futures were deep in the red. "The Middle East powder keg just blew the lid off global markets," said Stephen Innes at SPI Asset Management. "Equity futures are plummeting. Bond yields are sinking. Gold and oil are skyrocketing," he added. "Brent crude futures are racing toward the mid-US$70s range – but if the Strait of Hormuz, which accounts for 20 per cent of global oil flows, finds itself in the blast radius, you can add another US$15 to the bid. "If Iran holds back, we get a relief bounce. But if missiles start raining down on Tel Aviv or Tehran retaliates with real teeth, we're staring down a scenario that could redefine the macro narrative for the rest of 2025." Banking giant JPMorgan Chase had warned just this week that prices could top US$130 if the worst-case scenario developed. Market sentiment had already been low after Trump sounded his trade war klaxon again by saying he would be sending letters within the next two weeks to other countries' governments to announce unilateral levies on their exports to the United States. The "take it or leave it" deal spurred fears he would reimpose the eye-watering tolls announced on April 2 that tanked markets before he announced a 90-day pause. West Texas Intermediate: UP 8.6 per cent at US$73.86 per barrel Brent North Sea Crude: UP 8.2 per cent US$75.03 per barrel Tokyo - Nikkei 225: DOWN 1.5 per cent at 37,606.72 Hong Kong - Hang Seng Index: DOWN 0.3 per cent at 23,959.81 Shanghai - Composite: DOWN 0.2 per cent at 3,39748 Dollar/yen: DOWN at 143.18 yen from 143.56 yen on Thursday Euro/dollar: DOWN at US$1.1543 from US$1.1583 Pound/dollar: DOWN at US$1.3557 from US$1.3605 Euro/pound: UP at 85.12 pence from 85.11 pence New York - Dow: UP 0.2 per cent at 42,967.62 (close)
The Market Online
12-05-2025
- Business
- The Market Online
The case for investing in mining stocks in May 2025
If you've heard about the potential for mining stocks to deliver exponential returns and have dry powder to deploy, your due diligence process should begin with taking the commodity market's temperature, building a sense of the current state of demand and what it suggests about the future. To this end, let's take a look at seven major commodities, covering headwinds and tailwinds, to set our bearings about where investors can find the most prospective opportunities and optimize the probability of a satisfactory return. Oil Like the rest of the commodities covered in this article, the price of oil has been volatile as of late in response to the potential implications of U.S. President Donald Trump's tariff regime. Even though exemptions are in place, geopolitical tension remains in the air, with the International Energy Agency seeing slower demand growth ahead. WTI sits at a price of US$63.53 per barrel at the time of writing on Monday, entailing a minimal profit to a slight loss for most Canadian or U.S. producers, though the largest players could maintain operations into the low to mid-US$40 range. Investors should then be conscious of available cash when considering earlier-stage companies not yet able to self-fund their growth plans. Gold The price of gold has added more than 60 per cent since 2023 driven by major wars being waged in Ukraine, Israel, and now India and Pakistan, decreasing faith in the stability of the U.S. economy following the election on Donald Trump, and a sense of global uneasiness about how inflation will fluctuate over the near-term. This dynamic has led to a large number of recent deals from explorers to producers, including: Equinox's acquisition of the C$2.5 billion market cap Calibre Mining. CMOC's C$581 million acquisition of Lumina Gold. Gold Field's US$2.4 billion acquisition of Australia's Gold Road. Various strategic investments from major players such as McEwen Mining, Agnico Eagle and Centerra Gold. With an ounce of gold running you over US$3,200, just shy of its all-time-high, and the U.K. and China being the only countries to cut a trade deal with the U.S. following Trump's tariff push, there is plenty of cash to go around when it comes to kicking the gold supply chain into high gear. Feel free to scan for stocks across the mining lifecycle, but take care to favor high-quality, low-cost projects with low base-case gold prices, granting them a margin of safety should demand for the yellow metal experience a prolonged dip. Silver Given silver and gold's shared use-case as a safe-haven during times of heightened economic uncertainty, the former has appreciated by about 30 per cent since 2023, hitting a 10-year high in October 2024 of over US$34 per ounce. Though this price remains well short of its all-time-high of almost US$50 per ounce coming out of the Global Financial Crisis, the silver market is undoubtedly booming once again, incentivizing fresh capital off the sidelines and into high-conviction operators. Concentrate on silver's numerous industrial applications, including solar panels, chemicals, switches and circuit boards, as a means to build multi-pronged upside and diversify away from gold's predominantly investment-related demand. Copper The price of copper, at about US$4.60 per pound, sits near a 10-year high thanks to the metal's essential roles in electrical wiring, electric vehicles (EVs), construction and healthcare thanks to its durability, corrosion resistance and antibacterial properties. With copper demand expected to grow by 70 per cent from 2021 to 2050, and copper reserves and resources likely to remain readily available for the foreseeable future, investors seeking potentially exponential upside should focus on the micro-cap and small-cap spaces, where price-value dislocations have a higher probability of being found. Any potentially company-making project paired with a pessimistic share-price trajectory deserves further analysis. Lithium Given a recent slowdown in EV sales because of government subsidy cuts in the U.S. and Europe, demand for lithium, the main component in EV batteries, has taken a 90 per cent nosedive since 2022, making it unattractive for mining projects to move forward with their development plans. Lithium mining stocks have unsurprisingly tanked over the period, with the broader market losing faith in the critical metal's long-term legs. That said, when we dig a little deeper, we find that 2024 was the best year for EV sales on record, suggesting that lithium's price drop may be the latest example of the market's tendency to overreact in the face the unavoidable short-term pressures, which must always be endured to earn long-term returns. Investors can currently take advantage of tightening supply and build exposure to a large number of globally relevant assets trading at steep discounts to expected long-term demand. Should lithium prices rebound as EVs approach cost-parity with their gas-powered counterparts, the investment outcomes could be significant. Uranium Demand for uranium, the main ingredient in nuclear fuel, is expected to rise by as much as 140 per cent by 2050 thanks to its abundant resources and potential to lower global energy-based emissions. Despite these robust resources – according to the 2024 joint report from the Organisation for Economic Co-operation and Development Nuclear Energy Agency and the International Atomic Energy Agency – strategic investments will still be required to make sure they're available when needed. A deficit expected to grow into 2040 and beyond, with prices doubling to US$70 per pound over the past decade, illustrates how we're falling short of this pressing need. Consequently, the present risk-averse investment climate, hampered by inflation and geopolitical tension, is a favorable one for seasoned investors who can identify prospective uranium projects, evaluate management teams, take advantage of depressed stock prices and hold on for the decade or so it takes to progress from exploration to production. Nickel Nickel, the final commodity in our survey, plays an important part in the energy transition, alongside lithium and copper, providing cathode material in EV batteries and enhancing stainless steel used in clean technologies. Nickel demand for batteries alone is expected to triple by 2030, according to Benchmark Mineral Intelligence. Nickel also enjoys varied industrial applications from consumer products, to healthcare, to pulp and paper, with overall demand on track to add over 200 per cent from 2020 to 2050, according to the International Finance Corporation. With a deficit on the horizon and strong long-term uses cases supported by global decarbonization, nickel resources with high probabilities of reaching production are few and far between, making them key considerations for your portfolio. This is especially true as the metal's price sits virtually unchanged over the past decade, suggesting investors are drastically underestimating its role in our daily lives. Now that you have a framework in place to assess the current state of commodity demand, it's time to delve in the market to source potential allocations. To get your due diligence started on the right foot, here are 52 mining stocks worth a closer look: Join the discussion: Find out what everybody's saying about investing in mining stocks on Stockhouse's stock forums and message boards. The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.
Epoch Times
08-05-2025
- Business
- Epoch Times
Canadian Natural Says It Can Break Even at US$40 Oil, Reports Record Production
Oil and gas giant Canadian Natural Resources Ltd. says it can weather a crude price much lower than where it's been trading over the past month. West Texas Intermediate, a U.S. benchmark for light oil, has been hovering around the US$60-per-barrel mark in recent weeks, about US$10 lower than it was just six months ago. But Calgary-based Canadian Natural said it can cover maintenance capital and dividends in the low- to mid-US$40-per-barrel range, though it did not provide a breakdown of how each of its business segments would be affected. Canadian Natural is one of Canada's biggest oilsands producers, and is also active in western Canadian natural gas shales and offshore in the United Kingdom and Cote d'Ivoire. The company also said Thursday that it's reducing its capital spending for the year by $100 million to $6.05 billion because of cost efficiencies it managed to find. 'Importantly, this reduction will have no impact on our planned activities or targeted production volumes for 2025,' CEO Scott Stauth told a conference call to discuss first-quarter results. Related Stories 10/7/2024 4/24/2025 Canadian Natural shares were up more than five percent to $41.84 in late-morning trading Thursday. '(Canadian Natural) delivered another quarter of operational outperformance marked by robust production across the portfolio, with beats recorded in each of the major operating segments relative to our expectations,' Desjardins Securities analyst Chris MacCulloch wrote in a research note. Production during the first three months of 2025 averaged a record 1,582,348 barrels of oil equivalent per day, up from 1,333,502 boe/d in the same quarter last year. Profit during the period was $2.46 billion, up from $987 million a year earlier. The company said the profit amounted to $1.17 per diluted share for the quarter ended March 31 compared with 46 cents per diluted share a year ago. On an adjusted basis, Canadian Natural says it earned $1.16 per diluted share from operations in its latest quarter, up from an adjusted profit of 68 cents per diluted share in the same quarter last year. Product sales totalled $12.71 billion, up from $9.42 billion a year ago, while revenue amounted to $10.94 billion, up from $8.24 billion a year earlier.
Calgary Herald
07-05-2025
- Business
- Calgary Herald
Varcoe: 'You've seen this movie': Canadian oil companies adjust to new reality of prices below US$60
Canadian petroleum producers are busy updating action plans and examining options to withstand the stress of oil prices marooned in the mid-US$50-a-barrel range and mounting economic turmoil. Article content Article content Companies have been rolling out first-quarter results this week and detailing how they'll navigate choppy waters created by lower oil prices, a tariff war, uncertain federal policies and a slowing global economy. Article content Article content Some are starting to trim their capital programs or review discretionary spending, trends already underway in the United States. Article content Article content Others are leaning on past efforts to pay down debt and lower operating costs to bolster their resiliency in anticipation of a future dip in a volatile commodity. Article content 'If you've been in this business long enough, you've seen this movie, it's not new,' Suncor Energy CEO Rich Kruger told analysts on an earnings call Wednesday. Article content 'You do get more judicious on your economic spend . . . Do we need to spend it today? Or can we let the dust settle and see where we are six months or a year from now? Those are the prudent things we're doing and looking at.' Article content Suncor reported net earnings of $1.7 billion during the January-to-March period, up five per cent from a year earlier. Article content On Wednesday, the U.S. Energy Information Administration's short-term energy outlook forecast that West Texas Intermediate (WTI) crude prices will average about US$62 a barrel this year — below $59 during the second half — before averaging $55 in 2026. Article content Article content It cited higher oil production outpacing demand growth for the price drop. Article content Article content Other experts have reduced their oil price forecast below $60 a barrel after OPEC+ announced plans last weekend to bring additional supplies back onto the market in June. Article content Prices for U.S. benchmark crude, which traded above $80 a barrel in mid-January, closed at $58.07 on Wednesday. Article content South of the border, independent shale producer Diamondback Energy chopped its annual spending earlier this week by about US$400 million. In a letter to investors, its CEO said the American industry is at a tipping point with current commodity prices, adding that U.S. onshore oil production has peaked and will begin to drop this quarter. Article content In Canada, a report by TD Cowen this month noted the petroleum producers that it covers are 'overwhelmingly living within their means' at $60 a barrel, with capital spending and dividend expectations below projected cash flow levels.
