India Sees 9% Jump in Gasoline Consumption in November
Gasoline sales in India hit 3.42 million metric tons in November, which was a 9.2% increase on the year, the Economic Times has reported, noting diesel demand also grew, with November sales adding 8.4% on the year to 8.158 million tons. Aviation fuel demand also grew last month, further evidence of India’s growing demand for energy across fuel categories and the growth trajectory of its economy, highlighted by the increase in demand for diesel fuel. India is the world’s third-biggest importer of crude oil with over 80% of its demand covered by foreign crude. This has made the country highly price-sensitive and open to opportunities to diversify its supply, from both domestic and foreign sources. Domestic resources may hold significant promise, with up to 22 billion barrels in hitherto unexplored regions of the subcontinent’s sedimentary basin. To tap these, India would need help from Big Oil. Until such time as these reserves are confirmed, India remains reliant on imports—and OPEC production policies. Last month, the country’s petroleum minister called on the cartel and other producers to get together and discuss ways to stabilize the price of crude. India and other large consumers need predictability and stability in oil prices, Hardeep Singh Puri told Reuters last month on the sidelines of the ADIPEC energy conference in Abu Dhabi. “I’m hoping as a professional that all the players in this game will see a reason that… both producers and consumers can sit down together, have a discussion on what is a realistic price because it is not as if some production is taken off,” Puri said. Natural gas demand in India is on a growth trajectory as well. Projections are for twofold growth by 2040 and threefold by 2050, despite a parallel increase in wind and solar capacity for electricity generation as planned by the government.
Iran, India, Uzbekistan to ease transit thru Chabahar Port
Officials from Iran, India, Afghanistan, and Uzbekistan in the third joint working group exchanged their views regarding the facilitating the trade transactions and transiting and transporting goods through Chabahar Port. According to the Iran Ports and Maritime Organization, the third joint working group was held in Mumbai, India, in the presence of Deputy Director of Port and Economic Affairs of Chabahar Hossein Shahdadi. The participants discussed the capacity and infrastructure of transportation and the obstacles in this field. Presenting the necessary proposals to facilitate commercial transactions through Chabahar Port was also on the agenda of the meeting. Transportation and transit of goods from Chabahar Port were also discussed in the working group. The 3rd joint working group was held with the participation of officials from the Ministry of Ports, Shipping and Waterways of India, along with ambassadors of Uzbekistan, Afghanistan, and Iran in India, and Indian diplomats.
U.S. LNG Demand Nears Record Highs as Winter Looms
U.S. liquefied natural gas (LNG) plants are running near full throttle, with demand from export facilities hitting 14.6 billion cubic feet (bcf) on Friday. That’s just shy of the all-time record of 14.7 bcf set last December, according to data from LSEG. The surge comes as cooler weather settles in and outages at key facilities, like Freeport LNG, ease. The second-largest LNG exporter in the United States, Freeport LNG, was expected to draw just over 2 bcf on Friday after resolving several outages earlier this year. The plant is closely watched since its operations—or lack thereof—can send global gas prices swinging. Meanwhile, Cheniere Energy’s Sabine Pass facility in Louisiana, the largest U.S. LNG exporter, operated near its capacity, pulling almost 5.2 bcf. The U.S. continues to dominate as the world’s largest LNG exporter, with more production expected soon as two new plants gear up to go online. This comes as global LNG demand ramps up, especially in Europe, where natural gas prices have surged by 40% in the last two months due to cold weather forecasts and geopolitical tensions. Natural gas prices in the U.S. remain far lower than in Europe, where the benchmark Dutch TTF prices are nearly five times higher. This price gap is driving more U.S. LNG exports to European markets, helping meet their rising energy needs ahead of winter. As global markets tighten and colder temperatures arrive, U.S. LNG facilities are expected to play a crucial role in keeping the gas flowing to international buyers, all while pushing domestic production to new limits. With LNG demand near record levels, the U.S. solidifies its position as a global energy powerhouse.
The Next Four Years Will Be All About Natural Gas
Earlier in the year, energy analytics firm Wood Mackenzie predicted that a second Trump presidency could place a huge part of renewable energy investments at risk, increase carbon emissions by 1 billion tonnes more by 2050 and delay peak fossil fuel demand by 10 years beyond current forecasts. Not surprisingly, WoodMac expects the fossil fuel sector to benefit from Trump: the analysts have predicted that less spending on low carbon energy could boost demand for natural gas by 6% or 6B cf/day by 2030. And now commodity analysts at Standard Chartered have concurred with that opinion. StanChart notes that following Scott Bessent’s recent nomination as Treasury Secretary, his Manhattan Institute June session where he spoke at a conference entitled ‘Towards a New Supply-Side: The Future of Free Enterprise in the United States’ is being scrutinised as a potential guide to policy. During that talk, Bessent was asked which version of the late Shinzo Abe’s three arrows economic plan he would recommend to an incoming President Trump. A keen admirer of Abe, Bessent put forward the three targets of 3% economic growth, cutting the budget deficit by 3% of GDP by the end of the administration and “Three million more oil barrels equivalent a day from U.S. energy production”. StanChart points out that many commentators are [incorrectly] interpreting Bessent’s comments to mean he would urge the Trump administration to raise U.S. crude oil production by 3 million barrels per day (mb/d), good for a huge 30% to about 16.5mb/d by 2028. The analysts say that Bessent meant the addition of 3 million per barrels of oil equivalent (mboe/d) to U.S. energy production by 2028, an objective well within the means of U.S. producers. StanChart points out that U.S. oil and gas output is currently ~40.7mboe/d. U.S. oil and gas output has grown by an average of about 123 kboe/d per month since 2015, meaning adding 3 mboe/d would take less than 25 months. The commodity experts have noted that 41% of the post-2015 increase has come from natural gas, 28% from natural gas liquids (NGLs) and just 28% from crude oil. StanChart has predicted that the crude oil element of the next 3 mboe/d increase is likely to be significantly less than 20%, with natural gas likely to be the main instrument for meeting the new administration’s energy goals as crude oil output growth becomes increasingly difficult. WoodMac and StanChart are not the only natural gas bulls. Last week, Morgan Stanley predicted that the U.S. natural gas market is poised to enter a new cycle of demand growth thanks to surging LNG exports and rising electricity demand. Over the past few years, dozens of pundits and industry experts have predicted that the ongoing Fourth Industrial Revolution will drive unprecedented electricity demand growth in the United States and globally. Last year, the power sector consulting firm Grid Strategies published a report titled “The Era of Flat Power Demand is Over,” which pointed out that United States grid planners—utilities and regional transmission operators (RTOs)—had nearly doubled growth projections in their five-year demand forecasts. For the first time in decades, demand for electricity in the U.S. is projected to grow by as much as 15% over the next decade driven by the Artificial Intelligence (AI), clean energy manufacturing and cryptocurrencies boom. Meanwhile, StanChart says oil market fundamentals would support an unwind of some OPEC+ cuts, but market sentiment justifies a pause. Earlier, StanChart predicted that actions by OPEC+ are likely to determine the near-and mid-term oil price trajectory. According to StanChart, much of the negative sentiment that has dominated oil markets over the past three months can be chalked up to misapprehensions about the tapering mechanism for the voluntary cuts made by eight OPEC+ countries. Many traders are worried that the balance of oil demand growth and non-OPEC+ supply growth might not offset the scale of restored OPEC+output, leaving oil markets oversupplied. However, the experts have pointed out that this assumption flies in the face of continued reassurances from OPEC+ members that the tapering would be fully dependent on market conditions rather than being automatic. Trader focus has been on the question of how many barrels could be returned before a surplus emerged; however, positioning and price dynamics imply that the answer to that question is zero. In a November 3 press release, OPEC announced that output increases would be postponed by a month until the start of 2025. StanChart says the delayed return of more barrels to the market does not necessarily mean that OPEC felt the physical market could not absorb the oil, but rather reflects its awareness that extremely pessimistic 2025 oil balance predictions have viewed the tapering through that lens. StanChart says the latest announcement by OPEC strengthens the case that the pace of tapering will be market-dependent and not automatic as traders fear.
ONGC Expands Global Reach with New Stake in Azerbaijan’s ACG Oil Field
ONGC’s wholly-owned subsidiary ONGC Videsh Ltd, has purchased a participating interest of 0.615% in the Azerbaijan located Azeri-Chirag-Gunashli oil field. The deal includes ONGC Videsh acquiring 0.737% equity in the pipeline company Baku-Tbilisi-Ceyhan through its wholly owned subsidiary ONGC BTC Ltd. The deal worth $60 million was sealed on 29 November 2024 and is a strategic one for ONGC Videsh to further build upon its presence in the country’s energy sector of Azerbaijan. The ACG field is a super-giant offshore asset and one of the largest contributors to oil production in Azerbaijan. Located on the Caspian Sea floor, it has been operated by BP since 1999. It is developed in phases, with the newest production platform, Azeri Central East, commissioned at the start of 2024. BTC pipeline is an important export route connecting the Sangachal terminal in Azerbaijan to the Ceyhan marine terminal in Turkey for Caspian oil and condensate. The other participants of the ACG field are SOCAR, MOL, INPEX, Exxon, Turkiye Petrolleri AO, and Itochu. A contract for the operations of ACG runs up to 31 December 2049, thus giving a steady stream of production and export. ONGC Videsh already holds a 2.31% equity in the ACG field and a 2.36% interest in the BTC pipeline, which gives this acquisition an edge. BTC pipeline is crucial for extracting oil and condensate out of ACG and Shah Deniz across Azerbaijan, Georgia, and Türkiye. During FY24, ONGC Videsh produced 10.518 MMtoe of O+OEG, working at an average rate of around 200,000 barrels per day. As of April 2024, ONGC Videsh had 476 MMtoe of oil and gas 2P reserves, whereas total 2P reserves in ONGC were 704 MMtoe. This acquisition matches the strategic focus of ONGC on expansion of its global energy portfolio with reliable energy supplies.