Oil Prices Remain Depressed After OPEC+ Shocked Markets
Crude oil prices remained depressed in morning trade today in Asia following the Wednesday slump. Yesterday’s drop in prices was caused by news that OPEC+ is delaying its meeting, originally scheduled for this Sunday, to next Thursday. The latest EIA oil inventory report then added to downward pressure on oil prices by showing a sizeable build in U.S. crude stocks. Brent crude and West Texas Intermediate shed more than 1% earlier today, with Reuters reporting that there appeared to be disagreement among OPEC members on the production levels the cartel was aiming for. Citing unnamed sources from the cartel, the report said the dispute focused on African members. Analysts have suggested that Angola, Nigeria, and Congo want to have their production quotas raised from the levels agreed at a meeting in June. In June, OPEC+ agreed to limit output, with Saudi Arabia voluntarily cutting production by 1 million bpd and then extending this commitment until the end of this year. Since then, Saudi Arabia has expressed dissatisfaction with the production levels of other OPEC members. “At that meeting, OPEC squared the books on increasing UAE’s quota… by reducing the targets for the African nations that were underperforming their required production numbers,” RBC Capital Markets’ Helima Croft said in a note, cited by Reuters. ING’s Warren Patterson noted that disagreement among OPEC members would heighten price volatility but it remains unclear whether this disagreement would affect the cartel’s policy or Saudi Arabia’s production plans, Bloomberg reported earlier today. Citigroup analysts said they did not expect any surprises from the OPEC meeting, with Saudi Arabia most likely to extend its voluntary cuts of 1 million bpd for another month. The rest of OPEC would probably stick to their current quotas, the analysts predicted. Fears that OPEC+ will further deepen cuts at its next meeting put downward pressure on oil prices earlier this week, but the postponement of the meeting has added further concerns over the intensifying spat among the cartel’s members. Ahead of the delayed meeting, most analysts had expected the Saudis to extend the voluntary production cuts into 2024.
OPEC gains India oil market share in October, Russia slips
OPEC’s share in India’s oil imports in October hit a 10-month high as refiners bought more crude from Saudi Arabia and the United Arab Emirates after discounts narrowed for Russian oil that month, trade data showed. Russia’s share of the Indian market in October slipped to the lowest in nine months, according to Reuters calculations based on ship tracking data from trade sources. India, the world’s third-biggest oil importer and consumer, typically relies on producers in the Middle East for most of its oil needs and has encouraged refiners to diversify to cheaper alternatives to cut costs. The South Asian nation has emerged as the top buyer of the Russian seaborne oil sold at a discount after Western nations stopped buying from Moscow following its invasion of Ukraine. India imported about 4.7 million barrels per day (bpd) of crude in October, up 8.4% from the previous month as refiners increased purchases to meet higher local fuel demand during the festive season, the data showed. Imports from Saudi Arabia and the United Arab Emirates jumped to a 7-month high, up about 53% and 63% respectively in October from the previous month, the data showed. That helped lift the share of the producers in the Organization of the Petroleum Exporting Countries to 54% in October, up from 50% in September, according to the data. India imported on average 1.56 million barrels per day (bpd) of Russian oil in October, up 1.2% from the previous month, the data showed. Despite the increase, Russian oil’s share in India’s October imports slipped to 33% from 35% in September. Russia was the top oil supplier to India in April to October, the first seven months of this fiscal year to March 2024, followed by Iraq and Saudi Arabia. Higher intake of Russian oil boosted the share of the Commonwealth of Independent States (CIS) in India’s oil imports to the highest during April-October, the data showed.
Kerala Cabinet announces tie-up with BPCL to install compressed biogas plant fuelled by urban waste in Kochi
A Kerala Cabinet meeting on November 22, 2023 sought to convert Kochi’s mounting organic waste problem into a civic advantage by engaging the public sector Bharath Petroleum Corporation Limited (BPCL) to construct an industrial-level compressed biogas plant that would turn tons of biodegradable refuse from households, hotels, marriage auditoriums and markets into valuable energy and nutrient-rich fertilizer sludge. The plant would come up on 10 acres of Municipal Corporation land at Brahmapuram. The Kerala Government would hand over the public property to the BPCL. The Cabinet pegged the proposed plant’s daily processing capacity at 150 metric tonnes. The BPCL would underwrite the entire cost of the ₹150-crore project. The government would supply power and water to the plant at a subsidised rate. The BPCL would complete the scheme in 15 months. Kochi has a population of an estimated 7,00,000 and nearly 1,61,000 dwellings.
Indraprastha Gas Targets LNG Trucking Amid EV Shift. Here’s What Morgan Stanley Makes Of It
Indraprastha Gas Ltd.’s tie-up with Container Corp. to boost liquefied natural gas as trucking fuel will benefit the city gas distributor when it faces a risk from electric vehicle transition in Delhi, its largest market, according to Morgan Stanley. LNG trucking is a nascent market in India, unlike in China or the U.S., according to the international broking firm. While various stakeholders like Retailers and Petronet LNG Ltd. have been attempting to develop the ecosystem, there has been limited success to date, it said. If successful, LNG trucking would provide a new demand growth area, which is not yet priced in by market, Morgan Stanley said. While Indraprastha does stand to benefit, oil retailers Bharat Petroleum Corp., Hindustan Petroleum Corp. and Indian Oil Corp. could be bigger beneficiaries. Indraprastha Gas signed a memorandum of understanding for using LNG in trucks, which have 990-litre cryogenic gas tanks with a 1,400-kilometre mileage. The deal is an attempt to diversify from gas consumer base as EV adoption can hurt demand for the fuel.