Oil Prices Are Set for a Third Consecutive Weekly Loss
Crude oil prices looked on track for a third weekly loss in a row, pressured by the perception of weaker-than-desired Chinese demand. Even so, oil made some gains earlier in the week, mostly on substantial inventory draws as reported by the American Petroleum Institute and the Energy Information Administration. The latest push for oil prices came from the U.S. Commerce Department, which reported GDP growth of 2.8% for the second quarter, attributing it to higher consumer spending and business investment. More U.S. economic data is due out later today when the Fed will report personal consumption expenditure data—the inflation metric that the U.S. central bank favors. Meanwhile, prices are getting some support from expectations that the PCE data would be positive, strengthening hopes of an interest rate cut in September. On the other hand, Goldman Sachs analysts said this week that weak demand and slower GDP growth next year could shave some $11 off oil prices—if the U.S. imposes new tariffs on imported goods. The decline could deepen to $19 per barrel, the analysts said, if the Fed delays rate cuts until after 2025 on persistently high inflation. Interestingly, some oil market watchers appear to be bracing for more OPEC supply coming online in the second half of the year. That’s according to Bloomberg, which said in a report earlier today that market observers were “split over whether the producer cartel will ease their curbs next quarter.” OPEC did indeed suggest it might begin to roll back some production curbs but it made a point of clarifying this would only happen if prices are where OPEC wants them to be. With prices sliding, it is quite unlikely that the group would bring back any supply, since that would only serve to pressure prices even more, betraying the very purpose of the cuts.
ONGC signs PML deed with Coal India for Coal Bed Methane Block
India’s Maharatna Oil PSU ONGC has signed the first-ever Petroleum Mining Lease (PML) deed with Coal India for the Jharia Coal Bed Methane (CBM) block on 24 July 2024. he agreement was signed in the presence of Bokaro’s Deputy Commissioner Vijaya Jadhav, IAS, and District Mining Officer Ravi Kumar Singh, this joint venture (JV) marks a significant milestone in energy collaboration. Earlier, in January 2024, ONGC commenced oil production from the Block KG-DWN-98/2 Cluster-2 asset via a floating production, storage, and offloading (FPSO) vessel.
India’s natural gas consumption jumps 7.1% in June 2024: PPAC
India’s total consumption of natural gas, including internal usage, saw a significant increase to 5,594 million metric standard cubic meters (MMSCM) in June 2024, marking a 7.1% rise from the same month last year, according to a report by the Petroleum Planning and Analysis Cell (PPAC). “The increase in natural gas consumption underlines its growing importance as a versatile energy source across various sectors of the economy,” a PPAC official said. This upward trend reflects the expanding application of natural gas from electricity generation and heating to its use as a critical feedstock in industries such as fertilizers and plastics. For the fiscal year up to June 2024, cumulative consumption reached 16,707 MMSCM, a 3.8% increase compared to the same period in the previous year. “This consistent rise in usage showcases natural gas’s pivotal role in supporting India’s energy security and sectoral energy needs,” the spokesperson added. Sector-specific consumption data for April and May 2024 reveals diverse applications of natural gas across the economy. The fertilizer sector led with 26% of the total consumption, followed by city gas distribution at 20%, and power generation at 18%. Refineries and petrochemicals also showed significant usage, accounting for 9% and 3% respectively, while miscellaneous sectors comprised 24% of the consumption in May 2024.