New refineries bring down profits for global refiners
Oil refiners across Asia, Europe, and the United States have seen their profitability drop to multi-year-lows. This is a significant downturn in an industry which had previously enjoyed booming returns following the pandemic. It also highlights the global slowdown. This weakness is another sign of a softening consumer and industrial demand in China due to the slowing of economic growth and increasing penetration of electric cars. The pressure on prices has been exacerbated by the addition of new refineries in Africa, Asia and the Middle East.
Rio Tinto launches farming trial in Australia to explore renewable diesel production
Rio Tinto, the mining giant, announced on Wednesday that it would develop seed farms to investigate the potential of Pongamia oil as a source for renewable diesel. The miner and Midway, a local manager of a woodfiber processor, have partnered to manage the farming operations. Pongamia, a native Australian tree, can have its seeds processed into renewable diesel. This alternative emits much less carbon than fossil fuel. Rio Tinto has cleared about 3,000 acres of land in Queensland…
Spain, a leading olive oil producer, uses olive stones as fuel
David Jimenez Zamora, a farmer in Spain, barely batted an eyelid when the price of gas and electricity soared due to the energy crisis. The Spanish man kept the heated pool and hot water flowing for up to 26 guests in his 18th century farmhouse. What is his secret? Olive stones. The 48-year old said, "We use the olive pits that we have on our trees to heat up the pool and the underfloor heating systems. He said that the store, which held 5,000 kilos, was located in Granada in southern Andalusia.
Neste shares fall 10% after Neste warns about weaker future renewables prospects
Neste, a Finnish refiner, cut its outlook for renewables for the third consecutive time in the past year on Wednesday due to lower sales volumes and falling prices. The company's shares fell 10%. Neste has lowered the expected margins of its renewables division to $360-$480 a tonne. This is down from $480-580 per tonne in July, and far below the $600-$800 per tonne in February. It added that the company expects the volume of renewables to reach 3.9 million tonnes this year instead of the 4.4 it predicted at the beginning of the year.
OPEC lowers its global oil demand growth forecast for 2024 and 2025
OPEC cut its projection for the global oil demand in 2024 based on data collected so far this season. It also lowered its expectations for next year. This is the second successive downward revision by the producer group. The weaker outlook highlights the challenges that OPEC+ faces in balancing the markets. OPEC+ is made up of the Organization of Petroleum Exporting Countries (OPEC) and its allies, such as Russia. OPEC+ postponed a plan last week to pump more oil, after the prices fell to their lowest level since 2024.
China's oil demand starts to decline after 2023, when it peaked.
The oil products demand in China - long the driving force behind global crude consumption - peaked in 2023. It is expected to decline by 1.1% per year between 2023-2025. This drop will accelerate in the following years, according to a China oil analyst. The decline in Chinese oil demand due to the adoption of LNG trucks and electric cars (EV), and China's slower economic growth after the COVID-19 epidemic, have been drags on global oil prices and consumption. The demand for oil products in China fell 0.5% in the first six months of the year.
China's oil consumption growth is slowed by the transition to cleaner fuels.
Speakers at the APPEC Conference on Monday said that China's move towards low-carbon fuels, combined with a sluggish economic growth, are reducing the oil demand in the world's biggest crude importer. Daan Struyven is the head of Goldman Sachs' oil research. He said that China's demand has dropped from 500,000 to 600,000 barrels a day in the five-year period before the COVID-19 outbreak, down to 200,000 barrels a day now. Struyven explained that this is due to the increased use of LNG-powered trucks instead of diesel vehicles.
APPEC-Weak Oil Demand Affects Singapore Industry Gathering
Next week, the largest gathering of energy traders in Asia will be dominated by discussions about the weak demand for oil in Asia and China as well as the plans of OPEC+ producers in order to reduce supply. APPEC 2024 is organised by S&P Global Commodity Insights and will begin on Monday, in Singapore. More than 1,000 participants are expected to attend from more than 50 countries. They will discuss the outlook of oil and gas demand, supply and prices. The event takes place despite falling oil prices and fears of tensions escalating in the Middle East.
Colombia's Ecopetrol claims that operations have been affected by roadblockades and pipeline attacks
Ecopetrol, Colombia's state oil company, said that its operations were affected by the attacks on Cano Limon - Covenas and Bicentenario and a nationwide strike of truckers which has caused transport to be snarled. The company said in a press release that the production of hydrocarbons may be affected in the next few days, and this could affect fuel supply. The protests by truckers, who began Monday, in opposition to government plans to raise diesel prices, threaten to bring Colombia to a standstill, with long traffic jams on the motorways.
Haiti Power Firm shuts down main hydroelectric plant after protest
Electricite d'Haiti, the state-owned electricity company in Haiti, said that the output of Peligre hydroelectric plant was zero on Tuesday after protests about the distribution of the country's ailing power supplies. EDH reported that output at Peligre had been reduced since Monday after protesters stormed the facility demanding other areas to be supplied before Port-au-Prince. Some residents in Port-au-Prince are using solar batteries and diesel-powered generators. Both options are too expensive for the poorest of residents in the capital.
EIA: US oil demand for June was the lowest since 2020
The U.S. Energy Information Administration reported on Friday that U.S. oil use in June was at its lowest levels for the season since the 2020 coronavirus pandemic. The EIA's proxy of demand, crude oil and petroleum product supply, dropped 2.7% from one month to the next, reaching 20,25 million barrels a day (bpd), in June. This is the lowest June level since 2020. The sharp drop comes after consumption reached a seasonally high of 20,80 million bpd during May. The EIA data also showed that distillate demand was at its lowest seasonal level since 2020.
Oilseed processors are against California's proposal for a cap on biofuels
The National Oilseed Processors Association has sent comments to the California Air Resources Board opposing the cap on vegetable oils used as feedstocks for biofuels. CARB released a series of proposed amendments on August 12 to overhaul California’s Low Carbon Fuel Standard Program, which aims at decarbonizing the transportation sector through incentives for the supply of low-emission and renewable fuels. The amendments include a 20 percent limit on the use soybean oil and canola for the production of biodiesel.
US crude, gasoline stockpiles fall, distillates build, EIA data shows
The Energy Information Administration (EIA), which released its report on Wednesday, said that the U.S. crude and gasoline inventories decreased last week while distillate stocks increased. Data showed that crude stocks dropped by 846,000 barges to 425.2 million bars in the week ending August 23. This was far below what analysts had predicted in a poll, which expected a draw of 2.3 million barrels. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, fell by 668,00 barrels during the past week. The global benchmark Brent and U.S.
Kemp: Oil bears focus attention on low demand and planned production boost
Investors remain resolutely pessimistic about the future of petroleum prices, despite growing confidence that the U.S. Federal Reserve is going to cut interest rates in order to stimulate consumer spending and business investment. Fund managers sold oil futures and option last week after the rally to cover shorts the previous week quickly lost momentum. In the seven-day period ending August 20, hedge funds and other money mangers sold equivalent to 48 million barrels of oil in six important futures and option contracts.
Kemp: Oil bears focus attention on low demand and planned production boost
Investors remain resolutely pessimistic about the future of petroleum prices, despite growing confidence that the U.S. Federal Reserve is going to cut interest rates in order to stimulate consumer spending and business investment. Fund managers sold oil futures and option last week after the rally to cover shorts the previous week quickly lost momentum. In the seven-day period ending August 20, hedge funds and other money managers sold equivalent to 48 million barrels of oil in six important futures and option contracts.
PetroChina posts record interim profit, but fuel sales decline
PetroChina, China's largest gas and oil company, announced on Monday that its first-half net profit had reached a new record, an increase of 3.9% over a year earlier, due to higher gas and oil prices, which outweighed lower refining profits. According to a filing at the Hong Kong Stock Exchange, the net income for the period was 88.61 billion Yuan ($12.44billion) and the total revenue increased by 5% to 1.554 trillion Yuan. Sinopec, China's largest refiner, reported a 2.6% increase in its net interim profit to $5.2 billion.
New Zealand passes law to reverse oil and gas exploration ban
New Zealand announced on Monday that it will pass laws before the end of the year to reverse an offshore oil and natural gas exploration ban and to take urgent steps to eliminate regulatory hurdles for importing liquefied gas (LNG), amid energy shortages. The right-of centre government wants to attract investment into the oil and gas industry in the country. This law will end the ban on exploration that has been in place since 2018 outside of onshore Taranaki. Energy prices have risen to the highest level among developed economies due to severe shortages in the past few weeks…
Kemp: Oil bears become cautious as financial markets ease.
Investors reduced their short positions on petroleum after the other financial markets stabilized following an abrupt plunge earlier in this month. Crude prices also found support above $75 a barrel. Over the course of the week ending August 13, hedge funds and other money mangers purchased the equivalent amount of 74,000,000 barrels on the six most important contracts for petroleum futures and option contracts. The majority of purchases were made to buy back existing bearish short positions (+19 million barrels), rather than create new bullish long positions (-55 millions).
Brazil's fossil drive undermines Lula’s green ambitions
Brazil's government has invested heavily in fossil-fuels and plans to make the country the fourth largest oil producer by 2030. This month, President Luis Inacio Lula da Silva signed a law regulating the green hydrogen industry in the country. He will be hosting the United Nations COP30 Climate Summit next year. Which country can compete against us in energy transition? He asked this question at the signing ceremony. Lula said that he wants to make Brazil a global supplier of low-carbon fuels and the "Saudi Arabia" of renewable energy within 10 years.
EIA reports that US biofuel production capacity increased last year due to the renewable diesel rush.
Data from the U.S. Energy Information Administration showed that five new renewable diesel plants were opened in 2018. This increased U.S. production of this drop-in substitute for diesel and other emerging biofuels to 282,000 barrels per day (bpd). According to EIA, two renewable diesel plants were opened in the U.S. Gulf Coast region and on the West Coast. One facility was opened on the East Coast. The total number of renewable diesel plants across the United States now stands at 22. West Coast capacity at the beginning of this year was more than twice as high as last year, at 82,000 BPD.
