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Mint
5 days ago
- Business
- Mint
IEA lifts global oil supply forecast, signaling bigger surplus ahead
Next Story Giulia Petroni , The Wall Street Journal Global oil markets are poised for a larger surplus than previously expected this year, with supply set to grow more than three times faster than demand, the International Energy Agency said. The IEA raised its estimates for OPEC+ supply growth by 370,000 barrels a day for this year and by 520,000 barrels a day for the next, reflecting a faster-than-anticipated unwinding of voluntary cuts. (File Photo: Reuters) Gift this article Global oil markets are poised for a larger surplus than previously expected this year, with supply set to grow more than three times faster than demand, the International Energy Agency said in its closely watched monthly report. Global oil markets are poised for a larger surplus than previously expected this year, with supply set to grow more than three times faster than demand, the International Energy Agency said in its closely watched monthly report. The Paris-based organization now forecasts oil supply growth of 2.5 million barrels a day this year and 1.9 million the next, from earlier estimates of 2.1 million and 1.3 million barrels a day, respectively. The revision follows OPEC+'s latest bumper output hike, though countries outside of the alliance remain the primary drivers of growth. Supply was largely steady in July, as declines in OPEC+ output were offset by increased production from non-OPEC+ producers. Saudi Arabia's output fell from June's highs, when several Gulf producers boosted exports over fears of supply disruptions in the Strait of Hormuz. The IEA raised its estimates for OPEC+ supply growth by 370,000 barrels a day for this year and by 520,000 barrels a day for the next, reflecting a faster-than-anticipated unwinding of voluntary cuts. The alliance recently agreed to another super-sized hike for September in a push for market share, fueling concerns about a supply glut in the coming months. However, despite the unwinding of nearly 1.4 million barrels a day of cuts on paper from April to July, the IEA said only 640,000 barrels a day of additional crude production actually hit the market. The supply growth forecast for non-OPEC+ producers was trimmed by 10,000 barrels a day to 1.3 million this year, but raised to 1 million barrels a day from 940,000 previously for next year, largely due to higher U.S. output. Wednesday's report comes as Brent crude trades around $66 a barrel, while West Texas Intermediate is at $63 a barrel, as investors await President Trump's meeting with Russian President Vladimir Putin to discuss the war in Ukraine. 'Oil prices have been caught in the crosshairs of fast-changing market dynamics," the IEA said. 'While new sanctions on Russia and Iran threaten to impact trade flows, weaker economic growth is poised to temper demand." Iranian oil supply rebounded from the low levels seen in June following the 12-day conflict with Israel, and U.S. pressure has yet to significantly dent exports, according to the agency. Russian crude supplies remained broadly steady in July, though announced and threatened sanctions could curb output and revenue later this year. The IEA expects Russian production to align with its OPEC+ target, averaging just under 9.4 million barrels a day for the remainder of the year. Meanwhile, global oil demand growth is expected to slow further, largely due to a weaker macroeconomic outlook. The slump is particularly evident in China, India, and Brazil, after June and July data came in weaker than expected, according to the agency. 'The latest data show lackluster demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote," it said. Demand is forecast to grow by 685,000 barrels a day this year and by 699,000 barrels a day the next, from previous estimates of 704,000 and 722,000 barrels a day, respectively. The IEA's projections are well below OPEC's. Global oil inventories climbed for the fifth consecutive month in June, hitting a 46-month high of 7.8 million barrels. The increase was fueled by growing volumes of oil at sea, and rising stockpiles of both Chinese crude and U.S. gas liquids, the IEA said. Write to Giulia Petroni at Topics You May Be Interested In Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Business Standard
05-07-2025
- Business
- Business Standard
OPEC+ may boost oil production faster than expected, weighs August hike
Since April, OPEC and its partners have pivoted from years of output restraint to reopening the taps, surprising crude traders and raising questions about the group's long-term strategy Bloomberg By Nayla Razzouk, Salma El Wardany, Fiona MacDonald and Grant Smith OPEC+ is considering accelerating its oil production revival even more rapidly than expected during a virtual meeting on Saturday, delegates said. Saudi Arabia has guided the Organization of the Petroleum Exporting Countries to increase supplies by 411,000 barrels a day over the past three months, and the group is now weighing an even bigger boost in August. The assertive strategy — allowing the group to reclaim market share from non-OPEC+ producers — comes despite the risk of a global oversupply that could further pressure prices. Oil's recent decline offers a win for President Donald Trump, who sees lower prices as a way to ease costs for inflation-hit consumers. Brent futures hovered near $68 a barrel in London on Friday, down 13% over the past two weeks. A shift from open conflict between Israel and oil heavyweight Iran to a fragile truce has left Middle Eastern energy exports largely unaffected. 'With OPEC+ having pivoted to a market share over a price defence strategy, it may be pointless to keep a notional voluntary cut in place,' said Harry Tchilinguirian, group head of research at Onyx Capital Group. 'It could be best to get it over faster, and simply move on.' Since April, OPEC and its partners have pivoted from years of output restraint to reopening the taps, surprising crude traders and raising questions about the group's long-term strategy. Saturday's video conference was moved up by a day for scheduling reasons. Delegates cited a range of motivations for the shift: accommodating peak summer fuel demand, curbing overproduction by some members, and clawing back market share from rivals like US shale producers. Officials say Riyadh is especially eager to restart idled output as quickly as possible. The additional barrels may be welcomed by President Trump, who has consistently pushed for lower oil prices to support the US economy and tame inflation, while pressuring the Federal Reserve to reduce interest rates. Still, the ramp-up risks deepening a developing supply surplus, potentially driving prices to levels that could financially strain producers. Global oil inventories have been rising at a pace of about 1 million barrels per day in recent months, as Chinese demand cools and production climbs across the Americas—from the US and Guyana to Canada and Brazil. The International Energy Agency projects a sizable market surplus later this year. Wall Street firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc. forecast that prices may drop to $60 a barrel, or lower, by the fourth is considering accelerating its oil production revival even more rapidly than expected during a virtual meeting on Saturday, delegates said.
Yahoo
05-06-2025
- Business
- Yahoo
StanChart: OPEC+ Is About To Become Much More Transparent
A week ago, the 39th OPEC and non-OPEC Ministerial Meeting was held via videoconference, chaired by Prince Abdulaziz bin Salman Al-Saud, Saudi Arabia's Minister of Energy. According to a press release, the group pledged to 'develop a mechanism to assess the maximum sustainable production capacity (MSC) of member countries that will be used as reference for 2027 production baselines'. Whereas the long-term nature of the undertaking elicited little response from oil markets, commodity analysts at Standard Chartered have noted that this is a highly significant development. According to StanChart, establishing MSCs is likely to involve a series of data-related tasks over the next year, a task that's unlikely to prove too difficult. Indeed, the ongoing unwinding of voluntary cuts suggests that the market has tended to overestimate sustainable capacity of some producers and has, therefore, frequently overestimated spare capacity. StanChart says setting MSC levels will improve the visibility and transparency of member countries, making it much harder for some OPEC+ members to obfuscate the degree of their non-compliance with their pledges by creating opaque data flows and vague (or shifting) definitions. This move will give more accurate production data thus reducing oil price second key OPEC+ decision came on 31 May, with Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman agreeing to continue the accelerated unwinding of the 2023 production cuts by 411kb/d in July 2025. July's accelerated clip was similar to that for the previous two months. Previous media reports had warned that the group might decide to unwind more than 411kb/d if the worst overproducers (Kazakhstan and Iraq) continued to defy calls to stick to their quotas. However, an Algerian government press release revealed that no such discussion took place. And now StanChart says that oil markets are likely to remain relatively well balanced for the remainder of the year--if OPEC+ sticks to its current trajectory. According to the analysts, current balances imply a global stock draw of 0.4 mb/d in the third quarter, which will be offset by a 0.4 mb/d inventory build in the final quarter of the year. Contributing to the balance will be the continuation of significant non-OPEC+ supply underperformance relative to consensus expectations in 2025, coupled with relatively robust demand growth which is expected to clock in at 1.17 mb/d in 2025 and 1.07 mb/d in 2026. Meanwhile, current low prices are likely to create some additional potential demand upside. Looking at natural gas markets, the ongoing seasonal build in EU gas inventories accelerated sharply over the past week. According to Gas Infrastructure Europe (GIE) data, EU gas inventories clocked in at 56.79 billion cubic metres (bcm) on 1 June, good for a w/w build of 3.057 bcm. This marked the first time the w/w net injection exceeded 3 bcm since August 2022, with last week's build nearly 50% above the previous week's mark and 24% higher than the five-year average. The faster-than-average build has trimmed the y/y deficit to 24.44 bcm, lower than the 30.07 bcm deficit reached in mid-April. Natural gas prices have failed to sustain the momentum they built in the first three weeks of May: Dutch Title Transfer Facility (TTF) gas for July delivery settled at EUR 35.015 per megawatt hour (MWh) on 2 June, good for a w/w fall of EUR 2.354/MWh. Europe's gas prices have underperformed other energy prices in the year-to-date, by a significant margin. The latest Energy Information Administration (EIA) weekly release was bullish, with the deficit in combined crude oil and oil product inventories relative to the five-year average widening by 7.04 mb w/w to 47.76 mb--the largest since December 2022. Crude oil inventories fell 2.8 mb w/w to 440.36 mb, with inventories now 30.22mb below the five-year average. Meanwhile, U.S. crude exports fell 794 kb/d w/w, tempered by a counter-seasonal 162 kb/d fall in crude oil refinery runs as well as a 262 kb/d increase in imports. However, demand indicators for the month of May were weak, with gasoline demand down 4.8% y/y, jet fuel demand down 0.4% and distillate demand down 1.4%. The U.S. oil rig count declined by four w/w to a 42-month low of 461, marking a fifth consecutive weekly decline according to the latest Baker-Hughes survey. The Permian Basin rig count fell by one to a 42-month low of 278; the Midland Basin rig count fell by one to 98, Delaware Basin activity remained unchanged at 157 rigs, and other Permian drilling was unchanged at 23 rigs. In contrast, the U.S. gas rig count climbed by a single rig w/w to 99. By Alex Kimani for More Top Reads From this article on Sign in to access your portfolio
International Business Times
28-05-2025
- Business
- International Business Times
Oil Prices Rise Amid North American Supply Disruptions and OPEC+ Uncertainty
Oil prices edged up on Wednesday as the possibility of supply disruptions prompted by North America production losses provided some support amid expectations OPEC+ producers will stick to agreed output reductions. Brent crude rose 54 cents, or 0.8 percent, to $64.63 a barrel. U.S. West Texas Intermediate (WTI) rose 64 cents, or 0.9%, to $61.45 a barrel. There were several factors contributing to the rise in prices. A major development was the U.S. decision to halt Chevron from exporting Venezuelan crude oil. While Chevron can continue operations in Venezuela, it is now prohibited from exporting oil out of the country or expanding its activities. This move limits supply options for U.S. refiners seeking crude and adds pressure to the global market, which is already facing constraints. And in Canada, wildfires in Alberta led to brief shutdowns of oil and gas production facilities. The fires have forced evacuations from parts of oil operations and are helping to reduce output and tighten supply. The threat from the wildfires underscores the current exposure of the country's energy infrastructure to natural disaster. Behind all this, oil traders are navigating the swirling forces of the organization of the Petroleum Exporting Countries and its allied producer countries, collectively referred to as OPEC+. The group is supposed to meet this week. No immediate decision is expected at Wednesday's full-group meeting, though the broader coalition may hold another meeting on Saturday in a smaller format of just eight member nations to decide whether to boost production next month. OPEC+ will be under pressure to step up supply, industry analysts say. The demand picture is looking up, particularly with the summer driving season around the corner for several countries. Meanwhile, non-OPEC+ production has been stagnant in the first half of the year. Added to the Canadian supply risk, the cry for more production is rising. But some analysts are skeptical. Market analysts say the group is likely to raise production in July but may reconsider as the year goes on as the outlook for the world economy darkens and potential new supplies enter the market. There is also the unknown impact of geopolitics. Continuing strains between the U.S. and Iran have been keeping sentiment in check. If nuclear negotiations between the two countries falter, sanctions on Iranian oil exports would remain in a position to restrict global supply further. With all of these factors in consideration, oil markets continue to be volatile.
Time of India
21-05-2025
- Business
- Time of India
India's coal demand to rise 60% by 2050; oil, petrochemical imports to remain high: S&P
New Delhi: India's coal demand is projected to rise by around 60 per cent by 2050, and the country will continue to rely on imported oil, gas, and coal despite expanding domestic production, according to S&P Global Commodity Insights. India's growing energy requirements come at a time when global oil markets are facing weak fundamentals in 2025 due to sluggish demand and rising supply from both OPEC+ and non-OPEC+ producers. Pulkit Agarwal, Head of India Content (Cross Commodities), S&P Global Commodity Insights, said, 'Global oil prices have lost some shine in 2025 year-to-date on the back of a challenging demand environment exacerbated by supply growth from OPEC+ as well as beyond. On the demand side, while the absence of Chinese demand growth continues to be felt, as the market continues to look for a demand growth leader, trade and tariff issues are resulting in uncertainties regarding pace of economic and hence oil demand growth.' 'For India, oil demand continues to grow helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order, while the base is still small to have an oversized implication on the global markets,' he added. Gauri Jauhar, Executive Director, Energy Transition & Cleantech Consulting, S&P Global Commodity Insights, said, 'India is riding the global energy transition wave, while navigating the energy demand of economic ascent, an urban surge and contending with high pollution levels.' 'Facing the energy trilemma requires the India energy system to solve for energy accessibility, affordability, and security while transitioning. Energy security considerations run through oil, gas, and coal with India importing ~87% of oil, ~50% of gas, and ~26% of coal in 2024,' she said. As per S&P Global's base case, fossil fuels remain foundational, with only a slight decline by 2050. In an accelerated greening scenario, the share of fossil fuels could decline to 33 per cent by 2050. In a more challenged global scenario called Discord, fossil fuels would remain at 77 per cent of the primary energy mix by 2050, with coal supplying just over 50 per cent. Pritish Raj, Managing Editor for Asia Thermal Coal, S&P Global Commodity Insights, said, 'India's coal demand is expected to rise around 60% by 2050, and most of the incremental demand will be met by domestic supply.' 'Despite being one of the world's largest producers of coal, India has gaps in the quality and availability of domestic coal. As per S&P Commodity Insights' outlook, India's dependence on imported coal is expected to continue, with mid-term 2030 outlook projections at about 250 million tons by 2030, and thermal coal imports in the range of 150-180 million mt,' he added. 'While the share of coal in the power mix may go down from current over 70% to 66% by 2030, in terms of generation share it'll rise. We estimate that number to be around 1600 TWh by 2030 that's going to come from coal,' he said. The share of solar-based power in India's generation mix is expected to rise from 8.54 per cent in 2024 to 14.58 per cent by 2030. Stuti Chawla, Associate Director, India and Middle East Chemicals Pricing, S&P Global Commodity Insights, said, 'India's petrochemical demand is likely to outpace GDP growth in 2025-26 (Apr-Mar), despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns.' 'Chemical producers in India are looking at diversifying into specialty chemicals as well as upstream and downstream integration to compete with the onslaught of cheaper imports and maintain a stronghold in the domestic market,' she added
